Scirocco Energy PLC Related Party Transaction (1108O)
05 Octobre 2021 - 5:45PM
UK Regulatory
TIDMSCIR
RNS Number : 1108O
Scirocco Energy PLC
05 October 2021
05 October 2021
Scirocco Energy plc
("Scirocco Energy" or "the Company")
Related Party Transaction
Scirocco Energy (AIM: SCIR), the AIM investing company targeting
attractive assets within the European sustainable energy and
circular economy markets, announces that it has entered into a new
advisory relationship with Gneiss Energy Limited ("Gneiss"), which
has been providing general management and financial advisory
services to the Company since February 2018. The new relationship
is detailed across two engagement letters (the "Letters") that were
signed today between the Company and Gneiss, and replaces the
existing engagement letter in place with Gneiss. Gneiss is jointly
owned by Carolyn Fitzpatrick and Jon Fitzpatrick (a former
non-executive director of the Company).
Due to Mr Fitzpatrick having been a director on the Company's
board within the last 12 months, the entering into the Letters is
classified as a related party transaction under the AIM Rules for
Companies. The Directors, having consulted with the Company's
Nominated Adviser, Strand Hanson Limited, consider that the terms
of the Letters are fair and reasonable insofar as the Company's
shareholders are concerned.
The first of the two Letters covers financial advisory services
related to the previously announced proposed sale of the Company's
Tanzanian interests (the "Proposed Disposal"). There is a nominal
monthly retainer fee payable to Gneiss under this Letter, and it
has a minimum 12 month term, with a 3 month notice period
thereafter. The Letter will automatically terminate, including
within the minimum appointment period, in the event of completion
of the Proposed Disposal. Completion of the Proposed Disposal also
triggers the payment of a transaction fee, which is tiered
according to the consideration received by the Company in line with
market norms.
The second of the two Letters is intended to provide support to
the Company as it executes its new investment policy within the
sustainable energy and circular economy markets. Gneiss has a
specialist team focussed on these sectors and with extensive
relationships and experience. The team has a strong track record
delivering transactions in established renewables sub-sectors such
as wind, solar and hydro and emerging areas including energy from
waste, hydrogen and geothermal. The engagement covers ongoing
financial advisory services, including those related to the
origination of potential transactions, transaction support
services, general assistance with capital market related
responsibilities and activities, and assistance with financing
activities on a non-exclusive basis. Fees payable to Gneiss under
the new engagement include a mix of monthly fees covering
origination, transaction evaluation and execution services and one
off fees, based on a tiered system according to transaction value
for opportunities that the Company decides to pursue and which are
successfully completed. Depending on the nature of the service
provided, a minimum appointment term of between 6 - 12 months
exists, along with a notice period of between 1 - 3 months. The
Company is not obligated to appoint Gneiss to advise on
transactions that are not introduced by Gneiss. If requested by the
Company, financing fees are payable to Gneiss in the event of the
successful introduction by Gneiss of debt and equity financing
sources into the Company or its affiliates. The letter also
provides the Company with flexibility to phase out Gneiss
management services over time as it builds internal capability.
An independent committee of the Board comprising Don Nicolson
and Muir Miller was set up to negotiate the Letters with Gneiss.
This independent committee, together with the CEO, Tom Reynolds,
believes the terms of the Letters to be in line with market norms
and better aligned to the Company's current strategy and
vision.
Tom Reynolds, Scirocco's CEO stated "With the approval by
investors at the recent AGM of the new investment policy the Board
has been taking further steps to ensure the company has access to
appropriate support as it pursues opportunities within its target
markets.
This arrangement with Gneiss, which follows a detailed
independent assessment of our advisory needs, is both flexible and
cost-effective, and gives the Company access to a very experienced
advisory team with significant capital market experience within our
target sectors of sustainable energy and the circular economy.
Their scope will enable us to assess and execute value accretive
transactions in line with our growth strategy, utilising their
network and expertise to access deal flow and capital as
appropriate.
We look forward to working closely with Andrew Coull, Gneiss's
head of cleantech and renewables, and the wider Gneiss cleantech
and renewables team as we seek to build momentum through the
acceleration of our strategy."
This announcement contains inside information for the purposes
of Article 7 of EU Regulation No. 596/2014, which forms part of
United Kingdom domestic law by virtue of the European (Withdrawal)
Act 2018.
For further information:
Scirocco Energy plc
Tom Reynolds, CEO +44 (0) 20 7466
Doug Rycroft, COO 5000
Strand Hanson Limited, Nominated Adviser +44 (0) 20 7409
James Spinney / Ritchie Balmer / Rory Murphy 3494
WH Ireland Limited, Broker +44 (0) 207 220
Harry Ansell / Katy Mitchell 1666
Buchanan, Financial PR +44 (0) 20 7466
Ben Romney / Jon Krinks / James Husband 5000
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