Monday 11 November 2019

InfraStrata, the company focused on strategic infrastructure projects, announced a proposed placing of new Ordinary Shares by way of an accelerated bookbuild to raise a minimum of £6.0 million and that, further to the announcements on 1 October and 1 November 2019, it has entered into a conditional contract to purchase the principal assets of the former Harland and Wolff Heavy Industries Limited and Harland and Wolff Group Plc (together, "Harland & Wolff") from administrator BDO NI.

Placing highlights:

- The Company is seeking to raise a minimum of £6.0 million (before expenses), through a placing of new Ordinary Shares by way of an accelerated bookbuild at 0.3 pence per share.

- The proceeds of the Placing will be used to finance the acquisition of the principal assets of Harland & Wolff, repay and/or restructure the outstanding amounts pursuant to the Bridging Loan (announced on 1 October 2019), progress the Islandmagee Gas Storage Project and for general working capital purposes.

- The Company's executive directors have indicated that they intend to subscribe in the Placing for Placing Shares at the Issue Price for an aggregate amount of approximately £20,000.

- Additionally, the Company will draw down the second tranche of the debt facility provided by YA II PN Ltd and Riverfort Global Opportunities PCC Limited under the Bridge Loan for a sum of £500,000 (after costs and initial interest payment) in order to pay for the overheads of Harland and Wolff for the month of November 2019. Further details of this advance are set out below.

- The Placing is to be conducted by way of an accelerated bookbuilding process, which will commence immediately following this Announcement in accordance with the terms and conditions set out in the Appendix to this Announcement.

- Completion of the Placing is subject, inter alia, to (i) completion of the Acquisition through the satisfaction (or waiver) of all conditions precedent in the Acquisition Agreement (save for any conditions relating to the Placing Agreement); (ii) at least £6.0 million being raised in the Placing; and (iii) Shareholder approval of certain resolutions to enable the issue of the Placing Shares, which will be sought at a General Meeting of the Company expected to be held on or around 29 November 2019.

- The Issue Price represents a discount of approximately 11.7 per cent. to the closing mid-market price on 8 November 2019, being the latest practicable date before this Announcement.

- Arden Partners plc has been appointed as the Company's Joint Broker with immediate effect.

- The Placing has been arranged by Arden acting as Bookrunner and Sole Broker to the Placing.

- A Circular containing further details of the Placing and including a notice convening the General Meeting is expected to be despatched to Shareholders following completion of the Bookbuild.

- It is the intention of the Board for the Company to make an open offer to Shareholders in order to give them an opportunity to subscribe for new Ordinary Shares at the same price as investors under the Placing. Following completion of the Bookbuild the Company will finalise the details of the open offer and prepare the necessary documentation and a further announcement will be made in due course.

Acquisition highlights:

- The Company and its wholly owned subsidiary, InfraStrata Heavy Industries, entered into an Acquisition Agreement with Harland & Wolff and the Administrators on 8 November 2019 pursuant to which InfraStrata Heavy Industries has conditionally agreed to acquire the principal assets of Harland & Wolff for an aggregate cash consideration of £5.25 million.

- The strategic Harland & Wolff assets acquisition enables InfraStrata to bring in-house a large part of the engineering and fabrication requirements for the Company's Islandmagee Gas Storage Project and proposed FSRU Project.

- By utilising the Assets, the Company anticipates a material reduction in the capital cost ("capex") of each of its Projects and a reduction in the construction timelines.

- All the 70 employees of Harland & Wolff who did not opt for redundancy earlier in the year will be retained immediately following completion of the Acquisition.

- New management team for the Assets anticipated to be employed by Q1 2020 and plans to significantly increase the size of the workforce by several hundred over the next five years as InfraStrata progresses the development of the Projects.

- Harland & Wolff's highly skilled workforce presents the Company with an opportunity to create secondary revenue streams through the provision of services to the energy, maritime and defence sectors should such opportunities arise in future, which is in-line with the Company's existing strategy of developing and monetising strategic infrastructure projects and physical asset life-cycle management.

- Completion of the Acquisition is subject to the satisfaction of certain conditions precedent including:

- completion of the Placing through the satisfaction (or waiver) of all conditions precedent set out in the Placing Agreement (save for any conditions relating to the Acquisition Agreement); and

- the transfer or assignment of the Properties to InfraStrata Heavy Industries and the variation of the terms of leases of the Properties;

- Subject to the satisfaction or waiver of the conditions, the target completion date of the Acquisition is 5 December 2019. If completion of the Acquisition is not expected to occur by this date, the Company may elect to extend the completion date to 7 January 2020 by paying the sum of £600,000 plus VAT to fund the maintenance costs of the Assets for the period of 1 December 2019 until the Longstop Date.

- The Company has also agreed to fund the maintenance costs of the Assets for the month of November by making a cash payment of £400,000 (plus VAT) on or before 14 November 2019 and a further £100,000 (plus VAT) by 5 December.

- £500,000 of the Consideration was paid on 2 October 2019, as a non-refundable deposit, with £3.3 million due on completion of the Acquisition and the balance of the Consideration, being £1.45 million, due on or before 30 April 2020.

- The Company has agreed to guarantee the obligations of InfraStrata Heavy Industries pursuant to the Acquisition Agreement.

More information here.