News Release

Proposed Delisting and General Meeting

3 May 2023: Solgenics Limited (the "Company") an African renewables development company focused on a 300MW solar PV plus Battery Energy Storage System ("BESS") renewable energy project in Tete Province, Mozambique (the "Tete Solar Project" or the "Project") today announces that it will shortly be posting a circular to shareholders (the "Circular") in connection with a proposal for the cancellation of admission of the ordinary shares of no par value in the Company (the "Ordinary Shares") to trading on AIM (the "Cancellation"), pursuant to Rule 41 of the AIM Rules for Companies (the "AIM Rules").

The Circular will include a notice of a general meeting of the Company which will be convened at the offices of Simmons & Simmons, Citypoint, 1 Ropemaker Street, London, EC2Y 9SS, UK (the "General Meeting"), for the purposes of considering and, if thought fit, passing the requisite shareholder resolution to approve the Cancellation and certain matters ancillary to the Cancellation.

Further information on the proposed Cancellation and the General Meeting is set out below.

Solgenics Chief Executive Officer, Hanno Pengilly said: "The Company remains committed to progressing the Tete Solar Project and the decision to delist comes after careful Board consideration and evaluation of the advantages and disadvantages of remaining a publicly traded company in the interests of both the Company and shareholders.

The Company's recent delivery of a positive Project Feasibility Study and approved transmission integration solution, amongst other developments, have put it in a good position to deliver the Project and generate value for shareholders. This is reflected by the receipt in April 2023 of multiple expressions of interest from financial investors and Independent Power Producers in funding the Project's Bankable Feasibility Study ("BFS") work streams.

The delisting is expected to free up management time and resources to more fully focus on the Project and allow a more competitive approach with potential offtakers by limiting available public information to its competitors. All whilst operating under materially lower overheads.

The Company is prioritising a strategy to formalise offtake for the first phase 100MW solar PV plant before the end of Q2 2023 and "in principle" terms for a working capital loan have been agreed from certain Directors to cover the delisting and working capital costs during this period. Progression on the offtake is expected to unlock more attractive funding terms for ongoing working capital and the BFS, and the Company does not believe that a continued listing on AIM will provide significantly more cost effective sources of funding.

We are committed to our shareholders and believe that delisting will provide us with greater flexibility to pursue our long-term strategic objectives and create value for our stakeholders." 

Reasons for the proposed AIM Delisting

The Directors have conducted a review of the benefits and drawbacks to the Company and its shareholders in retaining its quotation on AIM, and believe that Cancellation is in the best interest of the Company and its shareholders as a whole. In reaching this conclusion, the Directors have considered the following key factors:

·      the continued listing on AIM is unlikely to provide the Company with significantly wider or more cost-effective access to capital than the funding options it already has from majority shareholders in the near to mid-term;

·      with a market capitalisation of £3.26 million the Directors have concluded that the most likely source of future funds will be through private capital;

·      the considerable cost, management time and legal and regulatory burden associated with maintaining the Company's admission to trading on AIM are disproportionate to the benefits to the Company;

·      there are negative operational influences on the business which come about directly as a result of being quoted, something which is accentuated by operating in an industry where the vast majority of the Company's peers are privately owned. The Company's peers also have far greater insight into its strategy, operational activities and future plans than the Company has into theirs, a factor which reduces the Company's relative competitiveness;

·      the Company's market capitalisation and lack of liquidity in the Ordinary Shares have impacted certain of the potential advantages to having the shares admitted to trading on AIM.

Accordingly, the Directors believe that it is in the best interests of the Company and its shareholders as a whole to cancel the admission of the Company's Ordinary Shares to trading on AIM. The Board does not consider that any potential benefits to the Company or Shareholders from retaining the AIM Admission are sufficient to justify the associated costs.

Effect of the AIM Delisting

The Directors are aware that certain Shareholders may be unable or unwilling to hold Ordinary Shares in the event that the Cancellation is approved and becomes effective. Such Shareholders should consider selling their Ordinary Shares in the market prior to the Cancellation becoming effective.

Under the AIM Rules, the Company is required to give at least 20 clear Business Days' notice of Cancellation. Additionally, Cancellation will not take effect until at least 5 clear Business Days have passed following the passing of the relevant resolution at the General Meeting (the "Resolution"). Accordingly, if the Resolution to cancel the Admission is approved, the last day of dealings in the Ordinary Shares on AIM is expected to be 6 June 2023, and the Cancellation is expected to become effective at 7.00 a.m. on 7 June 2023. A full timetable will be confirmed in the Circular.

The principal effects of the Cancellation will be that:

·      there will be no formal market mechanism enabling Shareholders to trade Ordinary Shares and, consequently, there can be no guarantee that a Shareholder will be able to purchase or sell any Ordinary Shares. This decision has been taken due to prohibitive costs, probability of low liquidity and the advantages of not having a publicly quoted share price during future negotiations with potential strategic investors and development funders;

·      while the Ordinary Shares will remain freely transferrable, it is possible that the liquidity and marketability of the Ordinary Shares will, in the future, be even more constrained than at present and the value of such Ordinary Shares may be adversely affected as a consequence;

·      in the absence of a formal market and quote, it may be more difficult for Shareholders to determine the market value of their investment in the Company at any given time;

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

·      Shareholders will no longer be afforded the protections given by the AIM 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 legal requirements applicable to private companies relating to transparency and corporate governance are less stringent than those applicable to public companies quoted on AIM and whilst the Company currently follows the QCA Corporate Governance Code, following the cancellation it will no longer be required to follow a recognised corporate governance code.;

·      the Company will no longer be required to publicly disclose any change in major shareholdings in the Company under the AIM Rules or the Disclosure Guidance and Transparency Rules;

·      the Company will cease to have a nominated adviser and broker;

·      the Company's Depositary Interest Facility which is required for a BVI company whose shares are admitted to trading to AIM to facilitate settlement of shares through the CREST facility will also terminate in June on or after the cancellation becoming effective. Holders of Depositary interests will, at that time, be moved to the main share register and be issued with share certificates.  Although the Ordinary Shares will remain transferable, they will cease to be transferable through CREST; and

·      the Cancellation may have taxation or other commercial consequences for Shareholders. Shareholders who are in any doubt about their tax position should consult their own professional independent tax adviser.

The Company will remain registered with the Registrar of Companies in British Virgin Islands in accordance with and subject to the Law, notwithstanding the Cancellation.

The Company proposes to seek shareholder approval to amend the Articles to remove certain provisions which were included as a consequence of its Admission to AIM, conditional upon the Cancellation becoming effective.  

The Company will continue to be bound by the Articles (which require shareholder approval for certain matters) following the Cancellation.

The above considerations are not exhaustive and Shareholders should seek their own independent advice when assessing the likely impact of the Cancellation on them.

The Company currently intends that it will continue to provide certain facilities and services to Shareholders that they currently enjoy as shareholders of an AIM company. The Company will:

·      continue to communicate information about the Company (including annual accounts) to its Shareholders, as required by the Law;

·      continue to hold annual general meetings; and

·      continue, for at least 12 months following the Cancellation, to maintain its corporate website, www.solgenics.com and to post updates on the website from time to time, although Shareholders should be aware that there will be no obligation on the Company to include all of the information required under AIM Rule 26 or to update the website as required by the AIM Rules.

Cancellation Process

In accordance with Rule 41 of the AIM Rules, the Company's Nominated Adviser has notified the London Stock Exchange of the proposed Cancellation.

Pursuant to AIM Rule 41, the Cancellation can only be effected by the Company after securing a resolution of Shareholders in a general meeting passed by a requisite majority, being not less than 75 per cent. of the votes cast by Shareholders (in person or by proxy).

The Directors have indicated they will vote in favour of the Cancellation.

Under the AIM Rules, the Cancellation can only take place after the expiry of a period of twenty Business Days from the date on which notice of the Cancellation is given. In addition, a period of at least five Business Days following the Shareholder approval of the Cancellation is required before the Cancellation may be put into effect. Accordingly, if the Resolution to cancel the Admission is approved, the last day of dealings in the Ordinary Shares on AIM is expected to be 6 June 2023, and the Cancellation is expected to become effective at 7.00 a.m. on 7 June 2023.

General Meeting

The Circular will include a copy of the notice convening the General Meeting to be held at the offices of Simmons & Simmons, Citypoint, 1 Ropemaker Street, London, EC2Y 9SS, UK at 10:00 a.m. on or around 26 May 2023 at which, inter alia, the Cancellation Resolution will be proposed.

The Directors of the Company are responsible for the release of this announcement.

Expected Timetable of Principle Events

Directors Loan

"In Principle" agreement has been reached with Non-Executive Chairman, Michael Haworth, and Non-Executive Director, Scott Fletcher, (together, the "Lenders") to provide a working capital facility term loan ("Loan") up to US$230,000 to cover delisting costs and working capital up to the end of Q2 2023.

The proposed terms of the Loan are as follows:

·      Maturity: 31 July 2023

·      Coupon: 0.3x

·      Security: none

·      In the event the Company enters into third party debt for the BFS and/or future working capital requirements, the right to amend the terms of the Loan such that it is on the same terms and ranks equally with the third party debt.

·      The Loan is subject to the lenders agreeing to the documentation and the necessary related party transaction process being completed by the Company's Independent Directors

·      Loan documentation to be finalised and is expected to be completed before the end of June 2023

·      A further announcement will be made once definitive documentation to effect the Loan has been entered into if it is entered into prior to the Cancellation.

Related Party Transaction

The proposed Directors Loan would likely constitute a related party transaction for the purposes of AIM Rule 13 for Companies. Accordingly, if the Loan is entered into prior to the Cancellation, the Company's Independent Directors would need to consider that the terms of the Directors Loan are fair and reasonable insofar as its shareholders are concerned before finalising the loan.

There can be no certainty that the transactions contemplated by this announcement will occur.

Enquiries

For further information please visit www.solgenics.com or contact:

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. Upon publication of this Announcement and such information is now considered to be in the public domain. The person who arranged for the release of this announcement on behalf of the Company was Hanno Pengilly, CEO.

About Solgenics

Solgenics is an African renewable energy development company focused on the development of a 300MW solar PV plus BESS renewable energy in the Tete Province in northern Mozambique (the "Tete Solar Project").

It is the intention that the Tete Solar Project will connect to the Mozambique grid with target power offtakers in Mozambique and the Southern African Power Pool ("SAPP").

The Tete Solar Project takes full advantage of Mozambique's leading sustainable energy resources and is fully aligned with Government's objective to become a champion for energy transition impacting all Southern Africa.