DGI Dg Innovate Plc

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY THE COMPANY TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION (EU) NO. 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW PURSUANT TO THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED. UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.

31 December 2024

DG Innovate plc

("DGI", "DG Innovate" or the "Company")

Intention to delist from London Stock Exchange

DG Innovate plc (LSE: DGI), the advanced research and development company developing pioneering solutions in sustainable mobility and energy storage, announces its intention to cancel the listing of the Company's ordinary shares ("Shares") on the Equity Shares (Transition) category of the Official List  of the Financial Conduct Authority ("FCA") and the admission to trading of its Shares on the Main Market of the London Stock Exchange.

Background to and reasons for the Delisting

DGI's management team has made significant operational progress over the past 12 months, including: signing of the Indian Joint Venture Agreement with EVage, delivering the Pareta P450 and e-brake motor prototypes to partner Cummins, and completion and initial testing of the first P80 samples in the past week. Despite this, the Company has found it difficult to raise sufficient funds to invest in its commercialisation strategy during this period, and in general since coming to market via reverse takeover in April 2022. This is in part due to its current listing and the constraints of the associated prospectus rules. However, it is also clear that there has been and remains a broad lack of demand for exposure to companies at DGI's current stage of development within the UK's traditional institutional investor base.

The DGI Directors do not foresee any obvious near-term catalysts likely to change this backdrop and have therefore concluded that the costs, regulatory requirements and additional administrative burden associated with maintaining the Company's listing are now, in their opinion, completely disproportionate to the benefits. Furthermore, current discussions with potential investors who could substantially invest in DGI were it no longer listed has given the Directors confidence that this provides the best available route to significant funding.

In order to continue these funding discussions and focus management resources on operational matters, the Board has therefore concluded that it is necessary to cancel the listing of the Company's Shares on the Equity Shares (Transition) category of the Official List and to cancel the admission to trading of the Shares on the Main Market for listed securities of the London Stock Exchange ("LSE") (the "Delisting"). The Directors believe that the Delisting will significantly reduce the Company's cost base and assist the Company in raising the capital it requires to invest in its products and assembly capacity, and grow the business.

The Directors remain absolutely committed to delivering value for all DGI's shareholders, with whom the Board are substantially aligned, given their respective shareholdings. The Directors believe that this course of action is the most appropriate to take at this time.

Process for and principal effects of the Delisting

As a company listed on the Equity Shares (Transition) category, the Company is not required to obtain the approval of its shareholders for the Delisting, but is required under UK Listing Rule 21.2.17 to give at least 20 business days' notice of the intended cancellation.

Accordingly, DGI has requested that (i) the FCA cancel the listing of the Shares on the Official List of the FCA, and that (ii) the LSE cancels the admission to trading of the Shares on the Main Market for listed securities of the LSE. It is anticipated that the Delisting will become effective from 8:00 a.m. (London time) on 31 January 2025. Investors holding Shares following the Delisting will remain a shareholder of DG Innovate and continue to be entitled to exercise all of the rights attaching to the Shares.

The principal effects of the Delisting will be that:

·      there will no longer be a formal market mechanism enabling Shareholders to trade their Ordinary Shares, although the Company is investigating admitting its shares to a matching platform to provide liquidity for shareholders;

·      the regulatory and financial reporting regime applicable to companies whose shares are admitted to trading on LSE will no longer apply;

·      shareholders will no longer be afforded the protections given by the Listing Rules, such as the requirement to be notified of certain material developments or events (including substantial transactions, financing transactions, related party transactions and certain acquisitions and disposals) and the separate requirement to seek shareholder approval for certain other corporate events such as reverse takeovers or fundamental changes in the Company's business;

·      the Company will no longer be required to publicly disclose any change in major shareholdings in the Company under the DTRs;

·      the Company will no longer be subject to UK MAR regulating inside information and other matters; and

The Company intends to publish its Annual Accounts for the period ending 31 December 2024 by 30 April 2024, as required by the UK Listing Rules.

Takeover Code

The Takeover Code (the "Code") applies to all offers for companies which have their registered office in the UK, the Channel Islands or the Isle of Man if any of their equity share capital or other transferable securities carrying voting rights are admitted to trading on a UK regulated market or a UK multilateral trading facility or on any stock exchange in the Channel Islands or the Isle of Man.

The Code also applies to all offers for companies (both public and private) which have their registered offices in the UK, the Channel Islands or the Isle of Man which are considered by the Takeover Panel (the "Panel") to have their place of central management and control in the UK, the Channel Islands or the Isle of Man, but in relation to private companies only if one of a number of conditions is met, including that any of the company's equity share capital or other transferable securities carrying voting rights have been admitted to trading on a UK regulated market or a UK multilateral trading facility or on any stock exchange in the Channel Islands or the Isle of Man at any time in the preceding ten years.

Once the Delisting is complete, the Company will no longer be admitted to trading on a regulated market in the United Kingdom. In these circumstances, the Code will only apply to the Company if it is considered by the Panel to have its place of central management and control in the United Kingdom, the Channel Islands or the Isle of Man. This is known as the "residency test".

In determining whether the residency test is satisfied, the Panel has regard primarily to whether a majority of a company's directors are resident in these jurisdictions. Following the Delisting, the Company will have seven Directors, of which, only two are resident in these jurisdictions. Accordingly, the residency test will not be satisfied and the Code will no longer apply to the Company.

As a result, Shareholders will no longer be afforded the protections provided by the Code, including the requirement for a mandatory cash offer to be made if either:

(a) a person acquires an interest in shares which, when taken together with the shares in which persons acting in concert with it are interested, increases the percentage of shares carrying voting rights in which it is interested to 30% or more; or

(b) a person, together with persons acting in concert with it, is interested in shares which in the aggregate carry not less than 30% of the voting rights of a company but does not hold shares carrying more than 50% of such voting rights and such person, or any person acting in concert with it, acquires an interest in any other shares which increases the percentage of shares carrying voting rights in which it is interested.

Further detail on the Code can be found at: https://www.thetakeoverpanel.org.uk/the-code. 

The Company will make further announcements in due course, as appropriate.

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