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AFC Energy raises £31.6 million through the placing

AFC Energy plc (LON:AFC), a leading provider of hydrogen power generation technologies, has announced that, further to its announcement at 16.40 p.m. yesterday, it has successfully completed and closed the Fundraising which was significantly oversubscribed.

The Fundraising has raised gross proceeds of £31.6 million through the placing of 187,500,000 New Ordinary Shares, an offer for subscription conducted by PrimaryBid Limited of 9,375,000 New Ordinary Shares, and a subscription to the Company of 625,000 New Ordinary Shares all at a price of 16 pence per share.

The proceeds of the Fundraising will be used to support the continued development of the Company as it moves from the development phase of its products and technology into the manufacture and commercialisation of them.

In particular, the proceeds of the Fundraising will facilitate:

·    the multiple manufacture of new H-PowerTM fuel cell systems capable of deployment in the next 12-24 months to meet projected customer demand – combined 20kW and 160kW units are expected to be built, including the 160kW H-PowerTM system for trialling by ACCIONA in 2021;

·    the employment of new manufacturing, product engineers and commercial staff in support of the deployment of H-PowerTM systems into the Company’s key target markets (electric vehicles and construction);

·    the development and implementation of its strategy for scale up of manufacturing and system assembly;

·    an acceleration in the development of the Company’s AlkaMemTM anion exchange membrane with scale up of manufacture and validation testing pre commercial deployment; and

·    the delivery of solid-state membrane fuel cell system (HydroX-Cell(S)TM) for published target release date in 2022 which the Directors expect will open new markets.

In addition, the Fundraising will also support and finance the warranties required in connection with systems deployed into commercial applications.

First Admission and Total Voting Rights

The issue of the Tax Qualifying Shares, being 24,364,875 new Ordinary Shares, is being carried out within the Company’s existing share authority to issue Ordinary Shares for cash.

Application has been made to the London Stock Exchange for the Tax Qualifying Shares to be admitted to trading on AIM. It is expected that the Tax Qualifying Shares will be admitted to trading on AIM at 8.00 a.m. on or around 3 July 2020 (or such later date as may be agreed between the Company and the Joint Bookrunners, but no later than 10 July 2020).

Following First Admission, the total number of Ordinary Shares in the Company in issue will be 502,854,519 and the total number of voting rights will be 502,854,519. This figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in the Company under the FCA’s Disclosure Guidance and Transparency Rules.

Second Admission and Total Voting Rights

The issue of the Non-Tax Qualifying Shares and the PrimaryBid Shares, being 61,732,125 and 9,375,000 new Ordinary Shares respectively, is being carried out within the Company’s existing share authority to issue Ordinary Shares for cash.

Application has been made to the London Stock Exchange for the Non-Tax Qualifying Shares to be admitted to trading on AIM. It is expected that the Non-Tax Qualifying Shares will be admitted to trading on AIM at 8.00 a.m. on or around 6 July 2020 (or such later date as may be agreed between the Company and the Joint Bookrunners, but no later than 13 July 2020).

Following Second Admission, the total number of Ordinary Shares in the Company in issue will be 573,961,644 and the total number of voting rights will be 573,961,644. This figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the FCA’s Disclosure Guidance and Transparency Rules.

Third Admission and Total Voting Rights

The Third Admission of the Conditional Fundraising Shares, being 102,028,000 new Ordinary Shares, is conditional upon (amongst other things) the passing of the Resolutions at the General Meeting.

Application will be made to the London Stock Exchange for the Conditional Fundraising  Shares to be admitted to trading on AIM. It is expected that the Conditional Fundraising Shares will be admitted to trading on AIM at 8.00 a.m. on or around 20 July 2020 (or such later date as may be agreed between the Company and the Joint Bookrunners, but no later than 31 July 2020).

Following Third Admission of the Conditional Fundraising Shares, the total number of Ordinary Shares in the Company in issue will be 675,989,644 and the total number of voting rights will be 675,989,644. This figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in the Company under the FCA’s Disclosure Guidance and Transparency Rules.

The Fundraising Shares will rank pari passu with the existing Ordinary Shares in issue.

Conditions to the Placing and Admissions

The Firm Placing and the Conditional Placing are conditional, amongst other things, upon:

(i)         none of the warranties given by the Company to the Joint Bookrunners being untrue, inaccurate or misleading in each case by reference to the facts and circumstances then subsisting;

(ii)        the Company having performed all of its obligations under the Placing Agreement to be performed prior to the relevant Admission and not being in breach of the Placing Agreement;

(iii)       there not having occurred, in the opinion of the Joint Bookrunners (acting together and in good faith), a Material Adverse Change at any time prior to the relevant Admission;

(iv)       in the case of the Tax Qualifying Shares, admission of the Tax Qualifying Shares becoming effective by not later than 8.00 a.m. on 3 July 2020 (or such later time or date as the Company and the Joint Bookrunners may agree, not later than 8.00 a.m. on 10 July 2020);

(v)        in the case of the Non-Tax Qualifying Shares, Admission of the Non-Tax Qualifying Shares becoming effective by not later than 8.00 a.m. on 6 July 2020 (or such later time or date as the Company and the Joint Bookrunners may agree, not later than 8.00 a.m. on 13 July 2020); and

(vi)       in the case of the Conditional Fundraising Shares, admission of the Conditional Fundraising Shares becoming effective by not later than 8.00 a.m. on 20 July 2020 (or such later time or date as the Company and the Joint Bookrunners may agree, not later than 8.00 a.m. on 31 July 2020.

In addition, the Conditional Placing is conditional, among other things, upon the Resolutions to be proposed at the General Meeting being passed without amendment.

Posting of Circular

The Company will shortly be publishing a Circular, containing a Notice of General Meeting, which will be sent to shareholders, together with a form of proxy. The Circular will also be available on the Company’s website at www.afcenergy.com.

Adam Bond, Chief Executive of AFC, said:

“We are delighted to be announcing today a significant strengthening of AFC Energy’s balance sheet with growth capital from several leading institutions new to the Company’s register. AFC Energy’s business plan is focussed on supporting aspirations for a clean and zero emission society through the use of Hydrogen, and with support from our new and existing shareholders, today’s raise will further support delivery of our business plan and eventual break even position.  

“Today’s raise will enable AFC Energy for the first time to make material inroads into the scaling up of our manufacturing capability, our internal staffing and system deployment, further demonstrating the underlying strength in the Company’s position within the wider Hydrogen economy.  We also expect the raise to support our credentials in future industrial and strategic partnering which could provide the basis for a transformational underpinning of the business today and into the future.”

Capitalised terms in this Announcement shall have the meanings given to such terms in the Company’s announcement at 16.40 p.m. on 30 June 2020.

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Disclaimer: Statements in this article should not be considered investment advice, which is best sought directly from a qualified professional.