The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this information is considered to be in the public domain.

29 September 2021

Tirupati Graphite plc ('Tirupati' or the 'Company')

Posting of Shareholder Circular

Approval Of Waiver of Obligations Under Rule 9 of the Takeover Code

Incorporating a Notice of General Meeting

Tirupati Graphite plc, the fully integrated, revenue generating, specialist graphite producer and graphene and advanced materials developer, has posted a Circular ('the Circular') on its website, www.tirupatigraphite.co.uk, with regards to the proposed acquisition of the entire issued share capital of Tirupati Specialty Graphite Private Limited, proposed exercise of certain Existing Warrants and approval of the issue of further Proposed Warrants and resultant requirement for  approval of a waiver of obligations under Rule 9 of the Takeover Code. The Circular includes a Notice of General Meeting to be held be held at the offices of Bird & Bird LLP, 12 New Fetter Lane at 10:15 a.m. on 28 October 2021.

Introduction

The purpose of the Circular is to obtain the approval of the Independent Shareholders to a waiver of obligations under Rule 9 of the Takeover Code in respect of certain issues of Ordinary Shares and warrants to subscribe for Ordinary Shares of the Company.

The Company was admitted to the Official List of the FCA (by way of a standard listing under Chapter 14 of the Listing Rules) and to trading on the Main Market for listed securities on 14 December 2020. The Company has a single class of Ordinary Share all of which carry voting rights.

The Company has a Concert Party for the purposes of the Takeover Code comprising TCCPL, Shishir Poddar, Hemant Poddar, Puruvi Poddar, Paridhi Poddar, Madhu Poddar and Trupti Poddar. Further details of the Concert Party are set out in paragraph 2 of Part II of the Circular. Immediately prior to Admission, the Concert Party was interested in 32,162,250 Ordinary Shares representing 52.36% of the issued ordinary share capital of the Company immediately prior to Admission.

As part of the Admission, the Company raised £6,000,000 pursuant to a placing and intermediaries offer (the "Offer") of 13,333,334 Ordinary Shares at 45 pence per share. Certain members of the Concert Party subscribed for an aggregate of 322,222 Ordinary Shares pursuant to the Offer.

Following Admission and the completion of the Offer, the Concert Party held 32,484,472 Ordinary Shares representing 43.45% of the then issued ordinary share capital of the Company. As at the date of this Circular the issued share capital of the Company is 86,207,767 Ordinary Shares and the Concert Party holds 32,484,472 Ordinary Shares which at the date of this document represent 37.68% of the Existing Issued Share Capital.

The Acquisition of TSGPL

On 10 October 2018, the Company conditionally agreed to acquire a 100% interest in Tirupati Specialty Graphite Private Limited, a business engaged in developing downstream value-added flake graphite processing facilities in India.

The total consideration for the Acquisition is to be satisfied by the issue of the 10,000,000 Ordinary Shares to the Vendors. The Vendors who are members of the Concert Party are to be issued 9,350,000 of the Consideration Shares on completion of the Acquisition.

The Acquisition is a key part of the strategy for the Company presented to shareholders and investors as part of the Admission and is disclosed in the prospectus issued at the time of Admission. The Company and its Independent Directors continue to believe that the Acquisition and the development of downstream processing capabilities by the Company will promote the success of the Company and that this is an important part of the Company's business strategy. Further, the Company and its Independent Directors believe that if the Acquisition were not to proceed there would be a detrimental impact on the Company's financial and trading position and prospects. The completion of the Acquisition continues to be subject to the Company obtaining certain regulatory approvals which will be applied for subject to the approval of the Resolution. It is anticipated that subject to the Resolution being passed at the General Meeting the completion of the Acquisition could take place later in 2021.

On completion of the Acquisition the following Consideration Shares will be issued.

Warrants

The Company has issued the following Concert Party Existing Warrants to the Concert Party:

The exercise period for the Concert Party Existing Warrants where the expiry is marked "*" have been extended post Admission by the Board of the Company and the exercise period for these warrants now expires on 31 December 2021. This was announced on 15 June 2021.

The Concert Party includes the founders of the Company and its members include some of the key members of the Company's management team, including the strategists and primary sources of the Company's techno-commercial expertise and whose expertise and skill set will continue to be necessary for the development of the Company's business. As such the Company and its Independent Directors consider it to be important that the Concert Party Existing Warrants (which have been issued as part of the remuneration packages for the relevant individuals) are able to be exercised.

The grant of warrants is also intended to be a part of the remuneration package for the key management of the Company for the foreseeable future as the Company looks during the current stage of its development to strike the right balance between the level of cash salaries and other ways of providing non-cash remuneration to the senior management team. For this reason, the Company and the Independent Directors, in addition to asking Independent Shareholders to approve the Waiver in respect of the Concert Party Existing Warrants, also want the flexibility to issue the Proposed Warrants giving the right to acquire up to 9,000,000 Ordinary Shares in total (comprised of up to 6,000,000 Ordinary Shares to Shishir Poddar and up to 3,000,000 Ordinary Shares to Puruvi Poddar as part of their remuneration arrangements agreed to at the time of Admission). The Proposed Warrants would be issued subject to approval of the remuneration committee of the Company on a phased basis annually over the next three years on similar terms to the Concert Party Existing Warrants with three-year exercise periods and an exercise price equal to the volume weighted mid-market closing price of the Ordinary Shares for a period determined by the remuneration committee prior to the date of issue.

Information on Tirupati

The Company was incorporated under the laws of England and Wales on 26 April 2017 with a primary focus of specialising in the exploration for and mining and production of natural flake graphite, a processed mineral with industrial and technology applications. Based on its structure-property relationship, graphite affords a variety of technologically innovative applications or performances in various industries a number of which are classified as 'green' industries. The products and uses for which it is employed include lithium-ion batteries, fuel cells, two-dimensional graphene, refractories, electrical products, electric vehicles, flame retardants, solid-state high temperature lubricant, conductive polymers and friction materials.

The co-founders of the Company Mr. Shishir Poddar and Mr. Hemant Poddar are promoters and beneficial owners of Tirupati Carbons and Chemicals Private Limited ("TCCPL"), a privately held Indian company which is the largest shareholder of the Company, whose registered office is at 4L, Shree Gopal Complex Court Road Ranchi, 834001 India and founded on 29 December 2006. The Concert Party is constituted by TCCPL and the members of the immediate family of the co-founders. The Company's Executive Chairman Mr. Shishir Poddar has been crucial to the Company's creation and development and remains the key strategist of the Company. The expertise he has brought to the Company is recognised by the Directors as integral to the Company's success. Prior to the first pre-Admission equity capital raised by the Company in October 2017, the Concert Party held 30,565,778 Ordinary Shares, representing c. 95% of the Company's issued ordinary share capital at the time.

The Company listed on 14 December 2020 and at Admission raised gross proceeds of £6 million to fund its initial phase of development. Taking advantage of favourable markets, a further £10 million was raised in April 2021 to accelerate its development plans across its three operating divisions.

In Madagascar the Company currently has 12,000 tpa production capacity of high-quality natural flake graphite. With the funds raised since its Admission, the Company will be uplifting the capacity to 30,000 tpa by 2022 and will be expand capacities to reach a total of 84,000 tpa by 2024 which will make the Company one of the top five producers of natural flake graphite in the world.  

Concurrently, investments are being made into expanding downstream projects in India and state-of-the-art Graphene and Mineral Technology Centre (also in India). Investments into the downstream business will see current production of 1,200 tpa of expandable graphite increasing to over 16,200 tpa in 2022 and subsequently to over 31,000 tpa by 2024 under its development plans. At the Company's Graphene and Mineral Technology Centre it will have commercial scale manufacturing capabilities for its Graphene Oxide and Reduced Graphene Oxide products which is used in high-tech applications in the world of 2D advanced materials including fast-charging and foldable phones, consumer wearables, supercapacitors, energy storage, aerospace, automotive, defence, medical, high-end sensors, desalination, and filtration to name a few. 

With its recent capital raises, the Company is well funded to complete its next phase of development putting it in a strong position to continue to capitalise on growth in the graphite markets.

For the 52 weeks ended 31 March 2021, the Company reported total revenues of £1,123,426 and Gross profits of £635,343. Its administrative expenses were £1,737,304 which resulted in a loss before tax of £1,249,112.

Since its incorporation, the Company has completed two strategic acquisitions and is progressing development of its projects and the Independent Directors are encouraged by the Company's previous and current financial performance and its future prospects as set out above. The two completed acquisitions provide the basis for the Group's activities in exploration, mining, basic processing, production of flake graphite for industrial applications. The proposed Acquisition of TSGPL provides the basis for downstream processing for high purity, intercalated, micronized and shaped/spherical flake graphite products for hi-tech applications and graphene development. With these acquisitions, the Company has embarked on a journey to become a fully integrated flake graphite and graphene company with the Acquisition being identified by the Independent Directors as an important activity for the Company's continued development.

Through its two subsidiaries in Madagascar, the Company owns a graphite producing asset, the Sahamamy Project, and a near-term graphite producing asset, the Vatomina Project. The projects have both undergone initial exploration to establish a certified JORC (2012) mineral resource estimate, and the Company aims to further develop projects in modules aligned with market development.

TSGPL has developed a start-up flake graphite-based flame-retardant additive manufacturing unit, the Patalganga Project, and is intending to further expand this and develop a comprehensive downstream flake graphite processing plant for hi-tech specialty graphite products. It is also developing a research and technology centre, Tirupati Graphene and Mintech Research Centre which shall consist of a graphene manufacture and application development facility, cutting edge research and industry focused technology development.

The Takeover Code

The issue of further Ordinary Shares to members of the Concert Party (including pursuant to the Acquisition and exercise of the Concert Party Existing Warrants and the Proposed Warrants if issued) gives rise to certain considerations under the Takeover Code and shareholders are entitled to the protections afforded under the Takeover Code. The Takeover Code is issued and administered by the Panel. The Takeover Code applies to, inter alia, a company which has its registered office in the United Kingdom and whose shares are admitted to trading on the Main Market, and as such the Takeover Code applies to the Company.

Under Rule 9 of the Takeover Code, where any person acquires, whether by a series of transactions over a period of time or not, an interest in shares which (taken together with shares in which persons acting in concert with him are interested) carry 30% or more of the voting rights of a company which is subject to the Takeover Code, that person is normally required to make a general offer to all the holders of any class of equity share capital and to the holders of any other class of transferable securities carrying voting rights in that company to acquire the balance of their interests in the Company.

Rule 9 of the Takeover Code also provides, amongst other things, that where any person who, together with persons acting in concert with him, is interested in shares which in aggregate carry not less than 30%, but does not hold shares carrying more than 50%, of the voting rights of a company which is subject to the Takeover Code, and such person, or any person acting in concert with him, acquires an additional interest in shares which increases the percentage of shares carrying voting rights in which he is interested, then that person is normally required to make a general offer to all the holders of any class of equity share capital and to the holders of any other class of transferable securities carrying voting rights in that company to acquire the balance of their interests in the company.

An offer under Rule 9 of the Takeover Code must be in cash (or be accompanied by a cash alternative) at not less than the highest price paid by the person required to make the offer or any person acting in concert with him for any interest in shares in the company during the 12-month period prior to the announcement of the offer.

For the purposes of the Takeover Code, persons acting in concert comprise persons who, pursuant to an agreement or understanding (whether formal or informal), cooperate to obtain or consolidate control of a company or to frustrate the successful outcome of an offer for a company. A person and each of its affiliated persons will be presumed to be acting in concert with each other. Certain categories of person are presumed to be acting in concert under the Takeover Code unless the contrary is established. The members of the Concert Party are presumed to be acting in concert for the purposes of the Takeover Code.

Waiver of obligations under Rule 9 of the Takeover Code

The Company issued the Concert Party Existing Warrants and entered into the Acquisition Agreement under which Consideration Shares are issuable to the Concert Party at a time when the Concert Party held more than 50% of the issued ordinary share capital of the Company and the Concert Party was therefore not subject to the obligations under Rule 9 of the Takeover Code to make a mandatory offer for the Company if Ordinary Shares were issued to the Concert Party pursuant to such arrangements. As such, a waiver of the provisions of Rule 9 of the Takeover Code was not sought at the relevant times.

Following Admission this position has now changed and unless a waiver of such requirements is obtained the Concert Party would be subject to the mandatory offer requirements under Rule 9 of the Takeover Code were further Ordinary Shares to be issued to the Concert Party whilst their aggregate percentage interest in the ordinary share capital of the Company is equal to or greater than 30% but they hold less than 50%. Further details of this requirement are set out above.

The Company also proposes to issue the Proposed Warrants (to subscribe for up to 9,000,000 Ordinary Shares in total) to Shishir Poddar and Puruvi Poddar as part of their remuneration arrangements agreed to at the time of Admission. In order to enable the subscription rights that will attach to the Proposed Warrants to be exercised by them, as members of the Concert Party, a waiver of the provisions of Rule 9 of the Takeover Code is also required. 

As the Company has just completed its Admission it is not considered practicable or possible in the short term for the Concert Party to reduce their shareholdings or have such shareholdings reduced to such a level where the Concert Party would be interested in less than 30% of the issued ordinary share capital of the Company following the issue of Ordinary Shares on completion of the Acquisition and the exercise of the Concert Party Existing Warrants.

The members of the Concert Party would normally be required to make a general offer to shareholders pursuant to Rule 9 of the Takeover Code if they are issued further Ordinary Shares pursuant to the Share Issuance Arrangements.

Assuming the completion of the following actions (the "Assumptions"):

a)    the issue of 3,880,000 Ordinary Shares following the exercise of the Concert Party Existing Warrants on the earliest possible date, being the date of approval of the Resolution;

b)    the issue of 10,000,000 Ordinary Shares following the completion of the Acquisition, 9,350,000 of which are to be issued to the Vendors, being members of the Concert Party on the earliest possible date, being upon the Company's receipt of the necessary regulatory approvals required in connection with the Acquisition, which are expected to be received within ninety days of the date of approval of the Resolution;

c)    the issue of 9,000,000 Ordinary Shares following the issue and exercise of all Proposed Warrants on the earliest possible date, being the dates of issue of the Proposed Warrants, which are presently anticipated to be issued in annual tranches over four years, the first date of issue being no earlier than 31 October 2021;

d)    no conversion of the Convertible Loan Notes;

e)    no exercise of the Existing Warrants held by anyone other than the Concert Party;

f)     no issuance of the Suni Consideration Shares; and

g)    no other changes to the Company's issued share capital as at the date of this Circular,

the maximum number of Ordinary Shares in issue will be 109,087,767. On the basis of the Assumptions, the Concert Party will be interested in 54,714,472 Ordinary Shares, being 50.15% of the issued Ordinary Shares.

However, in accordance with Note 1 on the Notes on the Dispensations from Rule 9, the Panel has been consulted and has agreed, subject to the Resolution being passed by the Independent Shareholders (on a poll) at the General Meeting, to waive the requirement that would otherwise arise under Rule 9 of the Takeover Code as a result of the Share Issuance Arrangements. The Resolution will be passed if approved by a simple majority of votes cast by Independent Shareholders on a poll. The members of the Concert Party have undertaken to the Company not to vote on the Resolution.

As at the date of this Circular, the members of the Concert Party between them are interested in shares carrying 30% or more of the Company's voting share capital but do not hold shares carrying more than 50% of such voting rights and any further increases in that aggregate interest are subject to the provisions of Rule 9 of the Takeover Code.

If Independent Shareholders pass the Resolution, the members of the Concert Party will, on completion of the Share Issuance Arrangements and based on the Assumptions, between them continue to be interested in shares carrying 30% or more of the Company's voting share capital but will not hold shares carrying more than 50% of such voting rights. However, if following the passing of the Resolution by Independent Shareholders, the members of the Concert Party exercise the Concert Party Existing Warrants and the Proposed Warrants in full then, based on the Assumptions, the members of the Concert Party will, between them, hold more than 50% of the Company's voting share capital and (for so long as they continue to be treated as acting in concert) will accordingly be able to increase their aggregate interests in shares without incurring an obligation under Rule 9 of the Takeover Code to make a general offer, although individual members of the Concert Party will not be able to increase their percentage interests in shares through or between a Rule 9 threshold without Panel consent.

Further background information in relation to the Concert Party and the Waiver (including a table setting out respective individual interests in Ordinary Shares of the members of the Concert Party on completion of the Share Issuance Arrangements) is set out in Part II of the Circular.

The Concert Party has informed the Independent Directors that it will not acquire further Ordinary Shares in circumstances which would require it to make a mandatory offer for the Company pursuant to Rule 9 of the Takeover Code. Shareholders should be aware on that basis that, if the Resolution is not approved by Independent Shareholders at the General Meeting, the Acquisition will not complete on its current terms and the Company will therefore be required to abandon plans to acquire TSGPL or otherwise seek to amend the terms of the Acquisition. Further, if the Resolution is not approved the relevant members of the Concert Party will not at present be able to exercise their Concert Party Existing Warrants (and the Proposed Warrants if issued may not be able to be exercised). This may lead to the Concert Party Existing Warrants and the Proposed Warrants expiring without being able to be exercised.

Accordingly, it is the Company's and its Independent Directors' view that the passing of the Resolution is in the best interests of the Company, and further that the assurances given by the Concert Party are genuine and sufficiently robust to afford the Company ample protection in the event that the Resolution is approved.

Independent advice provided to the Board

The Takeover Code requires the Board to obtain competent independent advice regarding the merits of the Share Issuance Arrangements which are the subject of the Resolution, the controlling position which it will create, and the effect it will have on shareholders generally.

Accordingly, Optiva, as the Company's financial adviser, has provided formal advice to the Independent Directors regarding the Share Issuance Arrangements.

General Meeting

You will find a Notice convening the General Meeting of the Company at the end of this Circular. The General Meeting will be held at the offices of Bird & Bird LLP, 12 New Fetter Lane at 10:15 a.m. on 28 October 2021 (or such later time as the annual general meeting of the Company being held on the same date is completed) to consider and, if thought appropriate, pass the Resolution summarised below.

The Resolution, which will be proposed as an ordinary resolution, is to approve the Panel's waiver of Rule 9 of the Takeover Code in relation to the Share Issuance Arrangements. This resolution will be taken on a poll of the Independent Shareholders only and, in order to be passed, requires a simple majority of the issued Ordinary Shares held by the Independent Shareholders present (whether in person or by proxy) at the General Meeting.

Action to be taken by Independent Shareholders

The purpose of the Circular is to give you details of, and the reasons for, the arrangements with the Concert Party that involve the potential issue of further Ordinary Shares and to explain why the Company and the Independent Directors consider such arrangements to be in the best interests of the Company and its shareholders as a whole and why the Independent Directors recommend that you vote in favour of the Resolution to be proposed at the General Meeting, notice of which is set out at the end of this Circular.

General Meeting

The Board has been closely monitoring the Covid-19 pandemic and mindful of the health and wellbeing of our shareholders and employees and as such Shareholders are encouraged to use their right to appoint the Chairman of the General Meeting as their proxy. Shareholders can do this by using one of the methods detailed in the notes to the Notice as soon as possible. It is important to note that the submission of a Form of Proxy in this manner will not preclude shareholders from attending the meeting in person, where this is still possible. Accordingly, we expect only a small number of shareholders to attend the General Meeting in person. Although we expect attendance in person at the General Meeting to be possible, in light of the ongoing COVID-19 situation and the uncertainties regarding future developments, we strongly encourage shareholders not to attend the General Meeting in person and appoint the Chairman of the General Meeting as their proxy. You are requested to complete, sign and return a Form of Proxy in accordance with the instructions printed thereon so as to be received by the Registrar, Share Registrars Limited, no later than 10:15 a.m. on 26 October 2021.

Should you still wish to attend in person, we kindly ask that you register your interest in attending by emailing [email protected].  Please note that it may be necessary to place restrictions on the number of attendees and/or prescribe other entry requirements.

Given the constantly evolving nature of the situation, we want to ensure that we are able to adapt these arrangements efficiently to respond to changes in circumstances. On this basis, should the situation change such that we consider that it is no longer possible for shareholders to attend the meeting, we may have to make alternative arrangements for the General Meeting. Should we have to change the arrangements in this way, it is likely that we will not be in a position to accommodate shareholders beyond the minimum required to hold a quorate meeting which will be achieved through the attendance of employee shareholders only. If there are any changes to the current arrangements for the General Meeting, the information will be made available on our website and, where appropriate, by an announcement via a Regulatory Information Service.

Additional Information

Your attention is drawn to the additional information set out in Part III of the Circular.

Irrevocable Undertakings

Irrevocable undertakings have been received from the following individuals to vote in favour of the Resolution:

The Company has therefore received irrevocable undertakings to vote in favour of the Resolution to be proposed at the General Meeting representing a total of 1,822,770 Ordinary Shares, or 3.39% of the Independent Existing Issued Share Capital.

There are no conditions to which these irrevocable undertakings are subject, nor are there any circumstances in which such irrevocable undertakings would cease to be binding on the individuals giving them.

Further details of the interests and dealings of the individuals giving these irrevocable undertakings can be found at paragraphs 5.3(b) and 5.4(b) of Part II of the Circular.

Independent Directors' Recommendation

The Independent Directors, having been so advised by Optiva, consider that the terms of the Share Issuance Arrangements and the Waiver are fair and reasonable and in the best interests of the Independent Shareholders and the Company as a whole. In providing advice to the Independent Directors, Optiva has taken into account the Independent Directors' commercial assessments. Accordingly, the Independent Directors recommend that Independent Shareholders vote in favour of the Resolution and have given irrevocable undertakings to the Company to vote in favour of the Resolution in respect of their own beneficial holdings of 1,822,770 Ordinary Shares, representing 3.39% of the Independent Existing Issued Share Capital as detailed above.

Shishir Poddar and Hemant Poddar are not considered independent in respect of the Waiver by virtue of their membership of the Concert Party and so are not making any recommendation in respect of the Resolution.

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

** ENDS **

For further information, please visit www.tirupatigraphite.co.uk or contact:

Notes

Tirupati Graphite Plc is a revenue-generating, multi-asset, multi-jurisdictional, fully integrated producer and developer of high-grade natural flake graphite, speciality graphite and graphene and graphene enhanced advanced materials.  With a unique set of properties, graphite has diverse applications with multiple growth streams and graphene forms the new generation of 2D and advanced materials. The Company places a special emphasis on "green" applications, including renewable energy and energy efficiency, energy storage, thermal management, and advanced materials development, and is committed to ensuring its operations are sustainable as well.

The Company's operations include primary mining and processing in Madagascar, where the Company operates two key projects, Sahamamy and Vatomina; 12,000 tpa of high-quality flake graphite concentrate with up to 96% purity is the current capacity of these projects and flake graphite being produced is sold to customers globally. The projects are under staged development and total capacity is planned to increase to 84,000 tpa by 2024 as per the Company's modular medium-term development plan.

In India, through Tirupati Speciality Graphite Private Limited ('TSG'), with whom the Company has a binding acquisition agreement subject to regulatory approvals, Tirupati is developing a suite of speciality graphite for use in hi-tech applications like lithium-ion batteries, fire retardants, thermal management, and composites. Its current operations include the 1,200 tpa Patalganga Project, focused on manufacturing the Company's trademarked expandable graphite products CARBOFLAMEX® and GrafEN 45545™. TSG is further developing 30,000 tpa specialty graphite project in two equal size modules and has developed unique green processing technologies for manufacturing these advanced materials.

TSG is also developing the Tirupati Graphene and Mintech Research Centre ('TGMRC'), a state-of-the-art R&D centre focussed on manufacturing graphene, developing its applications and advanced materials using graphene, and further providing environmentally friendly technologies consultancy for mineral processing.  Commercial operations commenced in July 2021 having completed Stage 1 of the centre's development plan.