19 April 2022

BiON plc

("BiON" or the "Company" or, together with BiON Ventures Sdn Bhd, the "Group")

Interim Results and Directorate Change

BiON (AIM: BION) announces its interim results for the six months ended 30 June 2021.

Financial Summary

·    Revenue was RM0.6m (H1 2020: RM27.2m)

·    Gross loss was RM3.6m (H1 2020: RM0.7m profit)

·    Operating loss was RM8.4m (H1 2020: RM2.8m)

·    Loss before tax was RM9.4m (H1 2020: RM2.7m)

·    Cash and cash equivalents at 30 June 2021 was RM1.0m (31 December 2020: RM2.3m)

·    Post period, on 19 April 2022, the operating entity of the Group, BiON Ventures Sdn Bhd ("BVSB"), was sold for a nominal sum, being £1

Post-period Events

·    As announced earlier today, the Company has disposed of its operating entity, BVSB

·    Accordingly, the Company has become an AIM Rule 15 cash shell  

·    The Company is now focused on making an acquisition that constitutes a reverse takeover under AIM Rule 14 on or before the date falling six months from completion of the disposal of BVSB

·   As also announced today, with immediate effect, Dato' Dr. Ir. Ts. Mohd Abdul Karim Abdullah, former Chairman, has resigned from the Board; Aditya Chathli has assumed the role of Interim Chairman; Datuk Syed Nazim bin Syed Faisal (formerly CEO) has become a Non-executive Director; and Malcolm Groat has joined the Board as an Independent Non-executive Director

Directorate Change

Further to the announcement of 31 March 2022, the Company is pleased to confirm the appointment of Maurice James Malcolm Groat (known as Malcolm Groat), aged 61, as an Independent Non-executive Director of the Company with immediate effect.

Malcolm is a Chartered Accountant (FCA) and MBA graduate who has worked for many years as a consultant to companies in the technology, natural resources and general commerce sectors. Following an early career with PwC in London, he held CFO, COO and CEO roles in international businesses. Since 2005, Malcolm has served in non-executive director or chairman positions primarily with growth businesses traded on AIM but also with larger bodies such as Baronsmead Second Venture Trust plc. He is currently chairman of TomCo Energy Plc and of Harland & Wolff Group Holdings plc, both AIM-traded companies.

Malcolm has held the following directorships and/or partnerships over the last five years:

Malcolm does not currently own any securities in the Company.

London Mining P.L.C. borrowed approximately $500m to develop its iron ore mine in Sierra Leone. In 2014, the company was unable to service this debt because of, amongst other matters, the Ebola disaster in Sierra Leone and a steep drop in global commodity prices. Malcolm was a director on 16 October 2014 when London Mining P.L.C. went into administration. Secured creditors were paid approximately $1.1m in October 2016, and unsecured creditors received $154k in April 2017. London Mining plc was liquidated on 30 July 2017.

Malcolm was a director of Baronsmead VCT 4 PLC at the time it went into members voluntary liquidation on 11 March 2016. Declaration of solvency was filed on Companies House on 17 March 2016. The company was subsequently dissolved following voluntary liquidation on 19.07.2018.

There are no other matters required to be disclosed pursuant to paragraph (g) of Schedule Two to the AIM Rules for Companies as regards Malcolm's appointment.

This announcement contains inside information for the purposes of Article 7 of Regulation 2014/596/EU which is part of domestic UK law pursuant to the Market Abuse (Amendment) (EU Exit) regulations (SI 2019/310).

Enquiries:                                                          

Overview

As further detailed in the Company's annual results for the year ended 31 December 2020, also announced today, the COVID-19 pandemic severely disrupted the Group's course of business and supply chain. In particular, in Malaysia, the restrictions imposed by the government on the movement of people were far more severe than those experienced in the UK, for example. This significantly impeded the Group's ability to progress its operations and compounded the financial constraints that the Group was experiencing.

With the operational and financial difficulties continuing post period, and given the liabilities within the operating business, the Board decided that it was in the best interest of shareholders to sell its operating business for a nominal sum but without any future recourse or liability to BiON plc, which was approved by shareholders at a general meeting held earlier today, 19 April 2022. Accordingly, and as discussed further below, the Company is now an AIM Rule 15 cash shell.  

Operational Review

Engineering, Procurement, Construction and Commissioning ("EPCC") - discontinued activity post period following BVSB disposal

The Group did not undertake any EPCC work during the first half of 2021. The Group experienced difficulties in collecting revenue for the EPCC projects that it provided in the prior year, which impeded its ability to pay its suppliers thereby impacting its debtor position. Accordingly, management decided to pause its pursuit of further EPCC contracts in order to limit the Group's risk exposure at a time when the market was suffering from the prolonged impact of COVID-19 as well as when the Group was unable to access funding to support new projects. As such, the Group has not generated revenue from EPCC contracts subsequent to 2020. 

Power Sales - discontinued activity post period following BVSB disposal

Biogas Power Plants

A summary of the developments with the Group's biogas power plants during the first half of 2021 is as follows:

·    Seberang Perak (2MW) was awarded the Commercial Operation Date ("COD") in May 2021, enabling it to export electricity to Tenaga National Berhad ("TNB") electricity grid at the full Feed-in-Tariff ("FiT") rate. Post period, in September 2021, it received the letter of approval from Sustainable Energy Development Authority ("SEDA"), which enabled the Group to recognise the revenue generated from power sales (including receiving payment for revenue that had been accrued to date). Accordingly, from May 2021, Seberang Perak has been exporting 1MW to TNB - with the reduction compared with the plant's 2MW capacity being due to an insufficient supply of palm oil mill effluent ("POME") feedstock.

·    Malpom (2MW) generated some power during the period, however early in 2021, power sales were temporarily ceased due to engine downtime and scheduled maintenance while upgrading works continued. In addition, post period, since July 2021, the plant has been unable to generate power as a fire incident at the neighbouring palm oil mill that supplies the POME feedstock to Malpom forced the plant to shut down. While the mill resumed operations in March 2022, the Group was unable to recommence power production as it did not have the financing available that is required for the process to re-start the plant after a prolonged period of downtime.

·    Nasaruddin (1MW) continued to await the granting of an Initial Operation Date ("IOD") to enable it to commence supplying power to TNB at an initial reduced FiT rate. The granting of an IOD requires a site visit from TNB, which was further delayed due to the Malaysian government restrictions on travel and also, post period, a shutdown at the neighbouring mill for maintenance work from December 2021 to mid-January 2022. The visit from the regulators is currently expected to take place by the end of April 2022, however, BVSB requires additional funding to be able to progress its operations at Nasaruddin.

·    Kahang (2MW) recommenced operations in January 2021, but due to the prolonged period of shutdown for upgrading works, it was required to undergo a 'Re-IOD' process to be able to export power to TNB. This did not occur as a result of the government restrictions on travel preventing the regulatory visit and then a visit scheduled for December 2021 needing to be postponed due to an outbreak of COVID-19 among employees at the site. An initial visit occurred in March 2022 and BVSB is awaiting a subsequent visit to complete the re-IOD process.  

In addition, post period, in July 2021, the Group entered into an agreement regarding a 3MW waste-to-energy biogas power plant in Aceh, Tamiang, Indonesia whereby it would provide EPCC services and then receive a shareholding in the plant upon completion. However, due to the financial constraints of the Group and the other parties involved, progress was impeded, with RM10m being required to complete the project. The Group nor the other parties had access to this funding.

Financial Review

Revenue for the six months ended 30 June 2021 was RM0.6m (H1 2020: RM27.2m), which was generated from the sale of electricity from the Group's biogas power plants. Gross loss was RM3.6m (H1 2020: RM0.7m profit), which reflects the low revenue.

Operating loss for the period was RM8.4m (H1 2020: RM2.8m), which reflects the reduced revenue. Net finance costs were RM1.0m resulting in loss before tax of RM9.4m (H1 2020: RM2.7m).

On a consolidated basis, basic loss per share for the period was RM0.022 (H1 2020: RM0.006) based on the weighted number of ordinary shares.

Cash and cash equivalents at 30 June 2021 were RM1.0m (31 December 2020: RM2.3m).

Post period, as announced on 31 March 2022, the Company has conditionally raised £1m before expenses via the placing of new ordinary shares (the "Proposed Placing"). The Proposed Placing remains conditional on the resumption of trading in the Company's ordinary shares on AIM, which is expected to occur at 8.00am BST on 20 April 2022. The net proceeds of the Proposed Placing, following the settlement of outstanding creditors, are estimated at about £600,000. 

Going concern

The Group made a loss for the six months ended 30 June 2021 of RM9.5m (H1 2020: RM2.5m) and recorded a net cash outflow from operating activities of RM4.5m (H1 2020: inflow of RM8.0m). At the reporting date, the Group held cash and cash equivalents of RM1.0m (30 June 2020: RM0.3m) and had current liabilities of RM119.4m (30 June 2020: RM74.9m) and was in a net liability position of RM71.2m.

In addition, the Group's indebtedness had hitherto been guaranteed by the major shareholder, Serba Dinamik. However, they are no longer in a position to do so and that required a long-term refinancing of the debt.

This resulted in the delay in the publication of the audited accounts for the year ended 31 December 2020 (the "Accounts") and the unaudited interim results for the period ended 30 June 2021 (the "Interims") while the Company sought a solution to provide a stable financial operating basis that would support its listing and therefore enable the Accounts and Interims to be published. Accordingly, the Company's ordinary shares were suspended from trading on AIM on 1 October 2021.

Throughout the period from suspension, the Company engaged with various parties with a view to injecting new resources into the existing business. However, despite pursuing a number of options, ultimately, this was not achieved, and the Board concluded that, given the liabilities within the operating business, the unpaid debtors and the operational issues and need for future financing to re-establish its business, the best outcome that could be achieved for its stakeholders would be to sell its operating business (BiON Ventures Sdn Bhd ("BVSB")) for a nominal sum but without any future recourse or liability to BiON plc. This sale was approved by the shareholders on 19 April 2022 (see note 29).

On completion of the disposal of BVSB, BiON plc ceased to own, control or conduct all or substantially all, of its existing trading business, activities or assets. Thus, BiON plc has become an AIM Rule 15 cash shell company. Its strategy is to acquire a business that is seeking an AIM quoted platform via a reverse takeover. The Directors intend to consider opportunities in a number of sectors and will focus on an acquisition that can create value for shareholders in the form of capital growth and/or dividends.

The definition of a going concern is that of "any entity unless its management intends to liquidate the entity or to cease trading, or has no realistic alternative to liquidation or cessation of operations". The Directors have taken the decision to cease trading through the disposal of all subsidiaries of the Company and, as such, have prepared the financial statements on a basis other than a going concern. The financial statements have been prepared on a basis that takes into account the likely realisation of assets and liabilities, but which does not take into account any liabilities to which the Company was not committed to as at 30 June 2021; for the purposes of these financial statements, this shall be referred to as a "realisation basis of preparation". Assets have not been revalued upwards in cases where the potential realisation of assets might be greater than the value held within the financial statements, nor have write downs been made to assets or liabilities recognised which have arisen as a result of events which have occurred subsequent to 30 June 2021. The Directors do not consider that the realisation basis of preparation has given rise to any material differences compared to the financial statements being prepared on a going concern basis.

Outlook and AIM Rule 15 Cash Shell

Following the disposal of its operating business (BVSB), the Company has become an AIM Rule 15 cash shell. The Company's strategy is to acquire a business that is seeking an AIM quoted platform via a reverse takeover. The Directors intend to consider opportunities in a number of sectors and will focus on an acquisition that can create value for shareholders in the form of capital growth and/or dividends.

As an AIM Rule 15 cash shell, the Company is required to make an acquisition or acquisitions which constitutes a reverse takeover under AIM Rule 14 on or before the date falling six months from completion of the disposal of BVSB or be re-admitted to trading on AIM as an investing company under the AIM Rules (which requires the raising of at least £6m), failing which the Company's ordinary shares would then be suspended from trading on AIM pursuant to AIM Rule 40. Admission to trading on AIM would be cancelled six months from the date of suspension should the Company fail to complete an acquisition or acquisitions which constitutes a reverse takeover under AIM Rule 14 during that period.