Corporate Update and Notice of Results

RNS Number : 6238R

Versarien PLC

01 July 2020

 

1 July 2020

Versarien plc

("Versarien", the "Company" or the "Group")

Corporate Update

Notice of Results

Versarien (AIM: VRS), the advanced materials engineering group , is pleased to provide a  c orporate update.

China Update

As described in the "China Update" announced by the Company on 25 March 2020, the Company signed an agreement with Young-Graphene (Beijing) Technology Company Limited ("YG") to create a 50%-owned Chinese joint venture out of the Company's previously wholly foreign owned enterprise, Beijing Versarien Technology Co., Ltd. ("BVT"), for the development of the Company's activities in China.

As previously announced by the Company on 25 March 2020, under the joint-venture agreement with YG, Versarien can exercise a backstop arrangement if YG fails to procure a definitive agreement for the envisaged first Versarien share subscription by 30 June 2020.  Under this backstop arrangement the Company is entitled to purchase from YG all of its equity interest in BVT for a nominal price of RMB10 (approximately £1) and YG shall accept such purchase of its equity interest.

The last three months have seen significant progress by YG to procure the funding for the first Versarien share subscription.  However, the recent and ongoing lockdown restrictions in both China and the UK, coupled with the impact of political events in Hong Kong have understandably had an impact on the process and the ability of YG to complete the first Versarien share subscription by 30 June 2020.  The Versarien Board has therefore considered whether it should extend the backstop date, exercise it or not exercise it, and has concluded that it is in the best interests of the Company to exercise the backstop arrangement and return BVT to 100% Versarien ownership for the time being.  However, the Company remains in discussions with YG and the Company's decision to acquire YG's interest in BVT does not preclude any future arrangements that may be agreed between the parties. For the avoidance of doubt, the joint venture agreement between Versarien and YG will  therefore be terminated upon the completion of the transfer of YG's interest in BVT or 31 July  2020, in any event.

In coming to its decision the Versarien Board has considered a number of factors.  These include, inter alia, the need for the Company to retain flexibility and to have the ability to engage in discussions with other interested parties in China; and the increasing need, particularly in the current political environment, to ensure the appropriate protection of the Company's intellectual property. Furthermore, the Company has also been awarded a £5 million loan facility ("the Loan") by Innovate UK Loans Limited, a wholly owned subsidiary of UK Research and Innovation, which allows the Company to avoid any funding uncertainty that would arise from extending the backstop date with YG. Further information regarding the Loan is set out in a separate announcement of the Company to be released this morning.

The Versarien Board remains focussed on the opportunities available in China, as one element of its wider global graphene commercialisation strategy, and the recent appointment of James Stewart as Non-executive Chairman of the Company, together with the permanent recruitment of Matt Walker, further outlined below, will assist this.

Matt Walker appointed Head of International Strategy and Government Relations

Following the completion of his secondment from the Department for International Trade ("DIT"),   Matt Walker is joining the Company on a permanent basis as Head of International Strategy and Government Relations (a non-board role) , with effect from 1 July 2020 .

As Head of International Strategy and Government Relations, Mr. Walker will in particular continue to focus on advancing the Company's on-going opportunities within South Korea, Singapore, Japan and in China, where he will be   appointed a director of BVT.

Mr. Walker has previously held roles as Head of the Devolved Administrations, where he was responsible for helping Scottish Development International, Business Wales and Invest Northern Ireland achieve Foreign Direct Investment and export targets, and more recently as Head of Outward Direct Investment ("ODI") at the UK Government's DIT, where he led the team which created the new Government ODI Strategy, which became a DIT priority and policy from April 2018.

Notice of Results and Covid 19 Update

Last year the Company published its preliminary results on 17 July 2019; however, owing to the impact of the Covid 19 lockdown on the finalisation of the Company's audit it is intending to publish the results for the year ended 31 March 2020 on 11 August 2020.

The Company has continued to operate all its businesses and progress its graphene commercialisation strategy through the lockdown period and y has provided essential supplies for the NHS and UK infrastructure.  In accordance with UK Government advice, vulnerable employees were furloughed, homeworking was effected where appropriate and those at work operate in accordance with the Covid 19 safety guidelines in these uncertain times

Neill Ricketts, CEO of Versarien, commented:    

"Covid 19 and the complex political environment has obviously impacted our plans in China, but this does not alter our strategy for expansion, of which China is but a part.  We remain well placed in China and the triggering of the backstop arrangement with YG has not fundamentally altered our strategy.  However, in all our activities we are very conscious of the need to protect our IP and are grateful for the support and assistance we have been receiving from the UK Government.

"Matt Walker's contribution to Versarien during his secondment, particularly with regards to the expansion of our activities in Asia, has been invaluable.  We are thrilled to have him with us on a full-time basis at this crucial moment, as we build on establishing Versarien as a global leader in the advanced materials sector.

"We look forward to releasing our preliminary results in August and providing an update on the progress we have been making with our collaboration partners at that time."

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED TO CONSTITUTE INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

Enquiries:

Versarien Neill Ricketts, CEO Chris Leigh, CFO	[phone]
SP Angel Corporate Finance (Nominated Adviser and Joint Broker) Ewan Leggat, Soltan Tagiev	[phone]
Berenberg (Joint Broker) Mark Whitmore, Simon Cardron	[phone]
Yellow Jersey (Investor Relations)  Charles Goodwin Georgia Colkin Henry Wilkinson	[phone]

About Versarien

Versarien plc (AIM: VRS), is an advanced engineering materials group. Leveraging proprietary technology, the Group creates innovative engineering solutions for its clients in a diverse range of industries.  Versarien has seven active subsidiaries operating under two divisions:

Graphene and Plastics

2-DTech Ltd, which specialises in the supply, characterisation and early stage development of graphene products.  2-DTech is based at the Graphene Innovation Engineering Centre, a £60 million facility set up to work in collaboration with industry partners to create, test and optimise new concepts for the delivery of graphene to the market.  www.2-dtech.com

AAC Cyroma Limited, which specialises in the supply of vacuum-formed and injection-moulded products to the automotive, construction, utilities and retail industry sectors.  Using Versarien's existing graphene manufacturing capabilities, AAC has the ability to produce graphene-enhanced plastic products.  www.aaccyroma.co.uk

Cambridge Graphene Limited, supplies novel inks based on graphene and related materials, using patented processes to develop graphene materials technology.  www.cambridgegraphene.com

Gnanomat S.L. ("GNA"), based in the Parque Cientifico Madrid, Spain, is a company capable of utilising Versarien's graphene products in an environmentally friendly, scalable production process for energy storage devices that offer high power density, fast recharging and very long lifetimes for use in electrical vehicles and portable electronics products.  www.gnanomat.com  

Versarien Graphene Inc - based in Texas, is the recently incorporated sales business for the UK's graphene products.

Hard Wear and Metallic Products

Versarien Technologies Limited has developed an additive process for creating advanced micro-porous metals targeting the thermal management industry and supplies extruded aluminium.  www.versarien-technologies.co.uk  

Total Carbide Limited, a leading manufacturer in sintered tungsten carbide for applications in arduous environments such as the oil and gas industry.  www.totalcarbide.com  

 

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