Business Update & Appointment of Nomad & Broker

RNS Number : 8866W

i(x) Net Zero PLC

20 April 2023

 

The information contained within this Announcement is deemed by i(x) Net Zero plc to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of UK law by virtue of the European Union (Withdrawal) Act 2018 ("MAR").

20 April 2023

i(x) Net Zero PLC

("i(x) Net Zero" or the "Company")

Strategic Update, Board Changes, New Loan Facility and Appointment of Nomad and Broker

i(x) Net Zero PLC (AIM: IX.), the investing company which focuses on Energy Transition and Sustainability in the Built Environment, is pleased to announce a strategic update, management changes and a new loan facility, creating a strong platform from which to drive shareholder value.

Strategy and Operations

i(x) Net Zero's mission is to create long term capital growth by investing in companies that focus on Energy Transition and Sustainability in the Built Environment.   Following a period of strategic and operational review, the Board of Directors have determined that in order to meet that objective, management will focus firmly on growing the Net Asset Value ("NAV") of the Company's investments. This will be achieved by identifying and seeking to execute profitable investment realisations from the existing investment companies in the short term and by sourcing high growth investment opportunities in accordance with its Investing Policy. The Board of Directors have set ambitious NAV targets for the executive management team, in order to drive growth in the business and diversify the Company's portfolio of investments.

The Company will accelerate its pursuit of this strategy with a more streamlined approach to operations. The Directors have introduced a near term target of reducing operating expenditure to 2% of NAV, down more than 50% from the 2022 operating expenditure.

Strengthened Executive Team

The Company is pleased to announce the appointment of Jonathan Carpenter Stearns as CFO, conditional on regulatory approval. Jonathan is expected to join the Board as an Executive Director of the Company.  Mr. Stearns brings over 40 years of C-suite level experience as CFO, CEO and CIO in the operating management of emerging growth companies. In addition, Mr. Stearns has significant experience in portfolio management, complex financial structuring and strategic consulting with both public and private companies located in the US and Europe. Previously Mr. Stearns was a Managing Director with AIG in its private capital group, and started his career at JP Morgan.  

The proposed appointment of Jonathan Stearns as CFO follows the appointment, in January 2023, of Pär Lindström, as Chief Executive Officer. Pär has over 25 years' investment experience, M&A experience and business development expertise through a career focused on venture capital, growth capital and private equity investments in the U.S., Europe and emerging markets.

The Board of i(x) Net Zero believe the new Executive team will be well placed to identify new opportunities for value and to secure profitable investment realisations within the existing portfolio.

Dmitri Tsvetkov, the former CFO of the Group, is stepping down from the Board with immediate effect but will continue in a senior management role as COO and Group Director of Finance.

New Loan Facility

The Company is pleased to announce that its wholly owned subsidiary, i(X) investments LLC has entered into a new secured $7.5 million 2 year term loan facility with European Depositary Bank S.A. ("EDB") ("Loan"). The Loan, once drawn, bears interest at 10.5% coupon (subject to periodic change in line with EDB's USD Base rate) and which is payable quarterly. The Loan can be utilised for the purposes of the financing of investments and general working capital purposes. The Loan is guaranteed by the Company.  

i(X) Investments LLC has agreed to pay an arrangement fee equal to 2% of the amount of the facility and a commitment fee of 1.75% per annum on any undrawn funds, payable quarterly in arrears.

Drawdown of the Loan is conditional upon there being no event of default and other customary provisions including delivery of documents.  The Loan is repayable together with default interest in the event of  default which, inter alia, includes a change of control and a reduction of aggregate NAV of the Company below $50 million.

The Loan is secured by a pledge granted by the Company and its nominee of the shares held by it including those in i(X) Investments LLC and all other proceeds and property and assets owned by it.  In addition, as part of the Facility Agreement, i(X) Investments LLC will pledge $4.0 million as a security at a deposit account with EDB. The Company will be able to invest this security deposit in certain money markets funds and other financial instruments and generate a return on deposited funds (currently expected to be approximately 4-5% per annum) thereby mitigating the interest payable. In addition, i (X) Investments LLC has undertaken to maintain a minimum cash balance in an operating account with amount varying depending on the remaining time to facility maturity but being zero if draw downs are below $4 million.

In connection with the facility, i(X) Investments LLC has also agreed to give customary undertakings, warranties and indemnities to the Lender, the Agent and Security Agent including as to tax and undertkaings not to undertake certain corporate transactions without consent.

The Company had a net cash position of $7.5 million at 31 December 2022 and with the new Loan facility it will allow management to focus on scaling the business, including compelling investments in the existing portfolio and new opportunities.

Appointment of Nominated Advisor and Broker

The Company is pleased to announce the appointment of Canaccord Genuity Limited as its Nominated Adviser and Sole Broker with immediate effect.

Nick R Hurd, Chairman of i(x) Net Zero, said:  " We strongly believe in building a portfolio of high quality companies that are actively engaged in the much needed global energy transition. We were also cognisant of the fact that we needed to take steps to streamline our business and so sharpen our strategic focus on value creation for shareholders. We are confident that the measures announced today give us a strong platform for growth and increased liquidity."

- Ends -

For further information visit   https://ixnetzero.com/  or contact:

i(x) Net Zero	Via Buchanan below
Pär Lindström - Chief Executive Officer
Canaccord Genuity Limited Nominated Adviser & Broker	[phone]
Max Hartley
Harry Pardoe
Buchanan
Helen Tarbet	[phone]
Simon Compton	[phone]

Notes to Editors

About i(x) Net Zero PLC

i(x) Net Zero PLC is an AIM quoted investing company that seeks to provides its shareholders with the opportunity to create long- term capital growth with positive, scalable, measurable and sustainable impact on the environment and on the communities it serves.

In accordance with its belief that the world's biggest problems are also the biggest market opportunities, i(x) Net Zero focuses on two critical areas in which it aims to make a positive impact: (i) Energy Transition and (ii) Sustainability in the Built Environment.

The Company uses a multi-strategy investment approach, providing the companies in which it invests with the expertise and catalytic capital to help them grow. To date, i(x) Net Zero has invested in biofuels, direct air capture (carbon removal), renewable energy, sustainable workforce housing and net zero construction technology .

i(x) Net Zero is a  signatory to the UN Principles for Responsible Investing. 

The Company has received the London Stock Exchange's Green Economy Mark.

 

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