News Release

Directors Loan

25 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, further to the Company's announcement of 3 May 2023, it has entered into a up to $230,000 working capital loan with a Director and a Director controlled company (the "Loan") to cover delisting costs and to fund the Company's working capital requirements  up to the end of Q2 2023.

Solgenics Chief Executive Officer, Hanno Pengilly said: "The Company has an urgent need for funding and finalisation of the up to US$230,000 loan ensures the Company is adequately capitalised until the end of Q2 2023, which could include progressing its Bankable Feasibility Study ("BFS") development funding strategy as well as completion of the planned delisting. The fact that the Loan is being provided on an unsecured basis by two directors of the Company who own 34.44% of the Company's issued share capital in aggregate emphasises the continued support from the Company's Board to capitalise the Company in a non dilutive manner whilst the Project development and other funding solutions are progressed before the end of Q2 2023. We believe the terms of the Loan to be fair given no other viable funding solutions are available to the Company in the required timeframe and that those funding solutions that were evaluated were on more disadvantageous terms. The Loan is unsecured and ranks behind the existing shareholder loans which are still being restructured."  

Background

Solgenics has been running a development funding process to raise capital to fund both the Project BFS and cover working capital costs during the BFS programme. To date, the Company has received multiple expressions of interest from potential funders including Development Funding Institutions ("DFI's") and Independent Power Producers ("IPP's"), and it is the Company's intention to finalise a preferred development funding partner before the end of June 2023. 

In addition, on 3 May 2023, the Company announced its intention to delist the Company by 7 June 2023 in order to, amongst other things, materially reduce the Company's overhead and working capital requirements.

The Loan is intended to cover working capital costs to progress the BFS and long-term working capital funding solutions and cover delisting costs.

Loan key terms

Agreement has been reached with Non-Executive Chairman, Michael Haworth, and Lowry Trading Limited ("Lowry"), a UK company controlled by Non-Executive Director, Scott Fletcher, (together, the "Lenders") to provide the Loan to cover delisting costs and working capital up to the end of Q2 2023.

The Loan key terms are as follows:

·      Up to US$230,000 loan facility

o  US$150,000 from Lowry

o  US$80,000 from Michael Haworth

·      Coupon: 30%

·      Maturity: 30 July 2023

o  Right to extend maturity to 30 September 2023 subject to the Company agreeing with the Lenders that genuine third-party offers have been received for further Project development funding to fund Project development costs and/or cover working capital.

·      Event of Default: coupon increases to 100%

·      Security: Unsecured

·      Availability: Drawdowns require consent prior to the extension of the existing shareholder Loan. 

No other viable funding solutions are available to the Company in the required timeframe and those funding solutions that were evaluated were on more disadvantageous terms. The Loan is unsecured and ranks behind the existing shareholder loans which are still being restructured.

Related Party Transactions

The participations of Michael Haworth, being a Director of the Company, and Lowry, being a company controlled by Scott Fletcher, a Director and a Substantial Shareholder of the Company, in the Loan constitute related party transactions for the purposes of the AIM Rules for Companies. Accordingly, Hanno Pengilly and Aman Sachdeva, Chief Executive Officer and Non-Executive Director respectively, acting in their capacities as independent directors for the purposes of the related party transactions, consider, having consulted with Liberum Capital Limited, the Company's Nominated Adviser, the terms of the Loan and the participation of Michael Haworth and Lowry in the Loan to be fair and reasonable insofar as the Company's shareholders are concerned.

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 plant 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.