Nu-Oil and Gas plc (AIM: NUOG), the AIM Rule 15 cash shell, is pleased to report that it has signed Heads of Terms (“HoT”) to acquire a European based plastics recycling and reprocessing business that has a well-established trading history (“the Proposed Acquisition”).
It is the intention of the potentially enlarged Company to act as a consolidation vehicle in the sector.
The Proposed Acquisition will constitute a reverse takeover transaction pursuant to the AIM Rules for Companies (the “AIM Rules”).
Whilst the commercial elements of the HoT are non-binding, the HoT do include binding provisions of, inter alia, exclusivity and transaction fees of the counterparty (payable in certain circumstances) up to £60,000, which combined with the Company entering into engagement letters with its external advisers to progress the Proposed Acquisition, constitutes a material commitment compared to the Company’s currently available funds.
The Proposed Acquisition would bring with it a new Chief Executive Officer with significant experience in this exciting and socially important sector. Furthermore, the Board will be strengthened with new appointees with a combination of commercial and sector experience, who will lead the rebranding and repositioning of the Company as it develops and grows.
Suspension of Trading
In accordance with Rule 14 of the AIM Rules, the Company’s Ordinary Shares will be suspended from trading on AIM with effect from 7.30 a.m. today. The Company’s Ordinary Shares will remain suspended until such time as either an AIM Admission Document is published or an announcement is released confirming that the Proposed Acquisition will not proceed, subject to the provisions of AIM Rule 15.
The Proposed Acquisition remains subject to a number of variables including, but not limited to, completion of due diligence, agreeing definitive documentation and compliance with all regulatory requirements, including shareholder approval. As such, there can be no certainty that the Proposed Acquisition will complete.
Further updates will be provided as and when appropriate.
Cost Saving Initiatives
Over the last five months the reconstituted Board has settled a number of inherited liabilities from the proceeds of the placings that the Company completed in November 2019 and January 2020, leaving the Company’s current cash balance at c. £250,000.
In light of the current global situation, the Board has proactively taken measures to further reduce the Company’s cost base in order to preserve its cash position through the reverse takeover process, including the already implemented reduction of all non-essential expenditure not related to the Proposed Acquisition and the reduction of the Company’s employee count. Furthermore, the Board continues to defer in excess of 50% of its remuneration, which has been the case since November 2019.
The Board remain confident that the steps taken will ensure the business emerges from this process well-placed to establish strong growth as it consolidates and expands.
Jay Bhattacherjee, Non-Executive Chairman of Nu-Oil, commented: “We are delighted to have entered into Heads of Terms to acquire a business that would be transformational for Nu-Oil. Today marks the first step towards delivering on the Company’s refocused strategy of increasing value for shareholders by targeting acquisition opportunities in the environmental industries sector.”
The information contained within this announcement is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.
All information is provided on an as-is basis. Where we allow Bloggers to publish articles on our platform please note these are not our opinions or views and we have no affiliation with the companies mentioned