Completion of the sale of Greenlane Biogas

RNS Number : 0071B

Pressure Technologies PLC

04 June 2019

 

4 June 2019

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY THE COMPANY TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE EU MARKET ABUSE REGULATION (596/2014). UPON THE PUBLICATION OF THE ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.

Pressure Technologies plc

("Pressure Technologies" or "the Group")

Completion of the sale of Greenlane Biogas

Pressure Technologies (AIM: PRES), the specialist engineering group, is pleased to announce that further to its update on 28 May 2019 it has now completed the sale of its wholly-owned subsidiary, PT Biogas Holdings Limited ("Greenlane"), which is the holding company for the Group's Alternative Energy Division, to Creation Capital Corp (TSX-V: CRN.P) ("Creation Capital"), a capital pool company listed on the TSX Venture Exchange ("TSX-V"), for an aggregate price of £11.1 million (the "Sale").  

Commenting on the Sale, Joanna Allen, Chief Financial Officer of Pressure Technologies, said: "The completion of this sale concludes the Board's process to realise the potential of the Greenlane Biogas business in the expanding market for renewable natural gas.  I would like to thank the Greenlane team for their hard work and wish them and the new leadership team all the best for their future as Greenlane Renewables Inc. We will remain a supportive shareholder and anticipate retaining our holding for the medium term."

Summary of the Sale

The aggregate purchase price of £11.1 million is before adjustments for working capital and debtlike items based on a lock box balance sheet as at 2 February 2019. Under a lock box pricing mechanism, the purchase price is adjusted based on an historical balance sheet and there are no further post-closing adjustments for cash, debt and working capital. The lock box adjustments have reduced the consideration to £10.1 million.

Following the conclusion of the private placement, the final consideration for the Sale is therefore comprised:

·    £2.0 million cash;

·    £2.0 million of Consideration Securities in Greenlane Renewables Inc, representing a 21% holding after satisfaction of certain fees and completion incentives; and

·    £6.1 million by way of a promissory note (the "Promissory Note"). The Promissory Note will (i) be denominated 50 per cent. in pounds sterling and 50 percent in Canadian dollars; (ii) mature 48 months from Completion; (iii) bear interest at the rate of 7% per annum and (iv) be secured by a pledge of all of the issued and outstanding Greenlane Ordinary Shares and all of the assets of Greenlane.

A Pressure Technologies nominee will be appointed as an outside observer to all Greenlane Renewables Inc. board meetings and activities until such time as the Promissory Note, together with all accrued and unpaid interest, is paid in full and retired.

Further details will be available in due course under Creation Capital's SEDAR profile and can be accessed via this link. Link to SEDAR.

Benefits of the Sale

The cash to be received by the Group on Completion will be used to pay down the Group's debt and the strengthened balance sheet will enable the Group to focus investment on its core specialist engineering businesses.  As at 30 September 2018, the Group's net debt was £6.7 million.

For further information, please contact:

Pressure Technologies plc Chris Walters, Chief Executive Joanna Allen, Chief Financial Officer	Tel: [phone] www.pressuretechnologies.com
Cantor Fitzgerald Europe (Nominated Adviser and Broker)	Tel: [phone]
Philip Davies / Will Goode
Belvedere Communications Keeley Clarke ([e-mail]) Cat Valentine ([e-mail])	Tel: [phone] Tel: [phone]

COMPANY DESCRIPTION

Company description - www.pressuretechnologies.com  

With its head office in Sheffield, Pressure Technologies was founded on its leading market position as a designer and manufacturer of high-pressure components and systems serving the global energy, defence and industrial gases markets.

Precision Machined Components - www.pt-pmc.com

●     Al-Met, Mid Glamorgan, acquired in 2010 www.almet.co.uk 

●     Roota Engineering, Rotherham, acquired in March 2014 www.roota.co.uk 

●     Quadscot, Glasgow, acquired in October 2014 www.quadscot.co.uk 

●     Martract Limited, Barton-on-Humber, acquired in December 2016 www.martract.co.uk 

Cylinders

●     Chesterfield Special Cylinders, Sheffield, IPO cornerstone in 2007 and includes,  CSC Deutschland Gmbh, which is based in Dorsten, Germany and Chesterfield Special Cylinders Inc. which is based in Houston, USA www.chesterfieldcylinders.com 

 

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