25 November 2022

eEnergy Group plc

("eEnergy" or "the Group")

Issue of secured bonds to raise £2,525,000 and issue of Warrants

Proposed Director Appointment

eEnergy (AIM: EAAS), the net zero energy services provider, announces that it has secured further debt finance of £2,525,000 (the "Subordinated Debt"), in order to provide additional funding to the Group.

The Subordinated Debt has been structured as secured discounted capital bonds ("Bonds") which are due for repayment on 24 May 2024 and 21 June 2024. £1 million of the Subordinated Debt is being provided by each of, Hawk Investment Holdings Limited ("Hawk"), an existing shareholder of eEnergy, and FFIH Limited (("FFIH"), with the balance of £525,000 being provided by the directors of the Company ("Directors").

FFIH is an investment company owned by John Foley and his wife. John is a barrister and chartered accountant who has served on a number of public and private company boards. He was CEO of MacLellan Group plc, a UK facilities management provider, for 12 years until its sale in 2006 to Interserve plc for an enterprise value of £130m. He was co founder of Premier Technical Services Group Ltd (PTSG) a specialist provider of facilities services, and was its Chairman from inception in 2007 until early November 2022 (he remains a Non-Executive Director). PTSG became a public listed company in 2015 and was acquired by Macquarie Group Ltd in 2019 for an enterprise value of approximately £300m which represented a 304% premium to the 2015 listing share price. He is also currently Chairman of SEC Newgate Spa, the parent company of a global strategic communications and advisory group and is also Chairman of Servoca Plc, a provider of staffing solutions and outsourced services.

As announced in the Company's preliminary results for the year ended 30 June 2022 published concurrently with this announcement, the Subordinated Debt will be used to fund additional Energy Services working capital as a result of lengthened cash collection cycles as well as funding the next phase of MY ZeERO stock-build, other balance sheet liabilities and general working capital.

Issue of Warrants

In connection with the Subordinated Debt, the subscribers to the Bonds will also be granted warrants to subscribe for, in aggregate 42,083,328 ordinary shares of the Company (the "Warrants"), on a pro rata basis. The Warrants will have an exercise price of 6p and will be exercisable for a period of 5 years from the date of issue.

The Company intends to utilise its remaining share authorities from its 2021 AGM to grant 32,791,216 Warrants immediately. The remaining 9,292,112 Warrants will be issued to the subscribers to the Bond (including the Directors) subject to obtaining shareholder approval at the Company's next AGM, expected to be held in December 2022.

Details of the Subordinated Debt

Under the terms of the Bonds, Hawk, FFIH and the Directors are subscribing in aggregate for £2,525,000 of the Bonds. The Bonds are being issued at a 21.29% discount to their face value (equivalent to a discount rate of 1.25% per month plus a 2% repayment fee) and are due to be redeemed by the Company (through the payment of in aggregate £3,207,754) on or before 24 May 2024 (in respect of amounts owed to Hawk and FFIH) and on or before 21 June 2024 (in respect of amounts owed to the Directors) (the "Redemption Dates").

The Bonds being subscribed for by Hawk and FIFH will be issued immediately on funds being received by the Company. The £525,000 of Bonds being issued to the Directors will be issued following the AGM and the associated funds are expected to be received by the Company on or around 21 December 2022.

The Bonds are secured on a second-charge basis behind Silicon Valley Bank UK Limited ("SVB"), the Company's senior creditor. The maturity of SVB's fully drawn £5.0 million revolving credit facility provided to the Group has been shortened by 12 months to 12 February 2024, to maintain SVB's priority as senior creditor. The security relating to the Hawk and FFIH loans will rank senior to the Directors loans.

The Bond contains certain customary terms, including accelerated payment in an event of default. The Bond can be repaid early at the election of the Company without penalty. In the event that the Subordinated Debt is not redeemed in whole on or before the Redemption Date, then interest shall accrue thereon at the rate of 15% per annum above the prevailing base rate of the Bank of England.

Security for the Bonds will be secured through a debenture held on trust by a security trustee, which will be Derek Myers, a Director participating in the Bond issue and Non-Executive Director of the Company.

Proposed Director Appointment

Under the terms of the Bonds and until the Subordinated Debt owed to Hawk and FFIH has been repaid in full, Hawk and FFIH jointly have the right to appoint a Non-Executive Director to the board of the Company, subject to satisfactory completion of customary due diligence and approval by the Company's nominated adviser. The Company intends to appoint John Foley as the Company's Non-Executive Chair at the time of publication of the Group's interim results for the six months to 31 December 2022.

It is expected that David Nicholls will remain on the Company's board as a Non-Executive Director. Further announcements will be made in due course.

Related Party Transaction

The Directors have subscribed for, in aggregate, £525,000 Bonds and are thereby being granted 8,749,996 Warrants in aggregate (subject to shareholder approval at the AGM). The participation of the Directors in the Bonds, and associated grant of Warrants, constitutes a related party transaction under Rule 13 of the AIM Rules.

As all of the Directors are participating in the transaction, Singer Capital Markets Advisory LLP, acting in its capacity as the Company's nominated adviser, having consulted with the Directors, considers that the terms of the Directors participation in the Bonds and the associated grant of Warrants are fair and reasonable insofar as the Company's Shareholders are concerned.

Details of the subscriptions for the Bonds are set out below:

Harvey Sinclair, CEO of eEnergy Group plc, commented: "As announced in our preliminary results, today, eEnergy continues to deliver significant year on year growth. As we win larger contracts, we are seeing longer cash collection cycles and for this reason we have secured a £2,525,000 facility with Hawk and John Foley's FFIH investment vehicle, a new strategic investor, as well as support from the Directors. The Board believes that John Foley has an excellent track record in building high growth companies and we look forward to his appointment to our Board."

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014 (which forms part of domestic UK law pursuant to the European Union (Withdrawal) Act 2018.

The person responsible for arranging the release of this announcement on behalf of the Company is Crispin Goldsmith Chief Financial Officer of the Company.

Contacts:

About eEnergy Group plc

eEnergy (AIM: EAAS) is a net zero energy services provider, empowering organisations to achieve net zero by tackling energy waste and transitioning to clean energy, without the need for upfront investment. It is making net zero possible and profitable for all organisations in four ways:

·     Transition to the lowest cost clean energy through the Group's digital procurement platform and energy management services. 

·     Tackle energy waste with granular data and insight on energy use and dynamic energy management. 

·     Reduce energy use with the right energy efficiency solutions without upfront cost. 

·     Reach net zero with onsite renewable generation and electric vehicle (EV) charging. 

eEnergy is a Top 5 B2B energy company and has been awarded The Green Economy Mark by London Stock Exchange.