Bushveld Minerals Limited (AIM:BMN, OTC:BSHVF) has announced that Bushveld Energy, its 84%-owned subsidiary, has entered into a conditional agreement to sell its entire 50.5% interest in VRFB Holdings Limited to Mustang Energy PLC (LSE:MUST).
The consideration for the sale is US$19.4mln, to be converted to sterling and to be satisfied by the proposed issue to Bushveld Energy of 79,353,604 new Mustang ordinary shares, priced at 20p per share.
In a statement, Fortune Mojapelo, CEO of Bushveld Minerals Limited, commented: "I am pleased to announce today's transaction, effectively giving Bushveld a majority stake in a London-listed energy storage business. The transaction provides Bushveld Energy access to the capital markets and will allow the company to achieve a transparent market value and attract specialist investors looking to participate in this exciting growing sector."
He added: "From our early days of investigating ways to support the development of VRFBs as a competitive long-duration energy storage (LDES) solution, Enerox was identified as a leader in the space with a compelling LDES proposition. The company has since gone from strength to strength with over 130 systems now deployed across five continents."
VRFB's principal asset is a 50% interest in Enerox Holdings Limited (EHL) which in turn holds the entire issued share capital of Enerox GmbH. Enerox is an Austrian-based vanadium redox flow battery manufacturer that has invested more than 20 years of research and development into its energy storage system, branded under the name CellCube. Its vanadium-based technology is considered state-of-the-art in the battery market and has already deployed more than 23MWh via 130 systems across five continents.
In the preceding 12 months, Enerox has announced five new orders for 34MWh, which includes a 16MWh battery to an Australian-based renewable project developer - Enerox's largest battery order to date.
CellCube designs and delivers sustainable and cost-effective energy storage solutions for microgrid and grid scale-applications. The CellCube brand is a leader in the energy storage eco-system and has developed a reputation for client service, system reliability and technical innovation. It has a stack and system production capacity and is focused on large commercial projects using the new generation FB 500-2000 technology.
As part of the sale, Bushveld Energy will have the right to appoint two directors to the board of Mustang and will enter into a lock-in agreement and relationship agreement.
In addition to the proposed sale, Bushveld Minerals holds US$2.75mln in unsecured convertible loan notes in Mustang which bear 10% interest per annum and convert at an issue price of 17p per new ordinary share in Mustang (previously 18p). The issue of ordinary shares in Mustang to Bushveld Energy in relation to the convertible loan notes is conditional upon Mustang completing a reverse takeover.
On the assumption that Mustang obtains the relevant approvals from its shareholders, the FCA and the Takeover Panel, Bushveld Minerals and Bushveld Energy will collectively hold 51.5% of Mustang. This will result in Bushveld Minerals having an indirect economic interest of 25.76% in Enerox.
Before its suspension, Mustang was trading at a significant premium to the 17p to 20p per Mustang share at which, respectively, the conversion of the convertible loan note and the sale of the VRFB shares are being concluded.