Placing and Open Offer to Raise £6.25 million

12 March 2021

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET ABUSE REGULATION (EU 596/2014) PURSUANT TO THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS 2018 ("MAR"). IN ADDITION, MARKET SOUNDINGS (AS DEFINED IN MAR) WERE TAKEN IN RESPECT OF CERTAIN OF THE MATTERS CONTAINED IN THIS ANNOUNCEMENT, WITH THE RESULT THAT CERTAIN PERSONS BECAME AWARE OF SUCH INSIDE INFORMATION, AS PERMITTED BY MAR. UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN AND SUCH PERSONS SHALL THEREFORE CEASE TO BE IN POSSESSION OF INSIDE INFORMATION.

 

Getech Group PLC

("Getech" or the "Company")

 

Conditional Placing and Subscription to Raise £6.0 million

 

Open Offer to raise up to an additional £0.25 million

 

and

 

Notice of General Meeting

 

Getech, a provider of data, knowledge and software products to the energy industry, is pleased to announce that it has completed a conditional Placing and Subscription to raise approximately £6.0 million (before expenses) by way of the issue of 27,272,728 Placing and Subscription Shares in two tranches at an Issue Price of 22 pence per new Ordinary Share.

 

In addition to the Placing and Subscription, the Company is launching an Open Offer to allow all Qualifying Shareholders to subscribe for new Ordinary Shares at the Issue Price and to raise up to approximately £0.25 million (before expenses) on the basis of 1 new Ordinary Share for every 33 Existing Ordinary Shares held on the Record Date of 10 March 2021.

 

Highlights

 

·      Placing and Subscription with new and existing institutional investors to raise £6.0 million (before expenses) to facilitate diversified growth in areas important to the delivery of a global Energy Transition.

 

·      Open Offer to Qualifying Shareholders to raise up to £0.25 million (before expenses).

 

·      The Issue Price of 22 pence represents a 12% discount to the closing mid-market price on AIM of 25 pence per Ordinary Share on 11 March 2021, being the last dealing day prior to the date of this announcement.

 

·      The net proceeds of the Placing and Subscription and Open Offer will be used by the Company to:

-  invest in its core products and services to enable it to add value to a range of commercial applications in the hydrogen, mining and geothermal sectors;

-  develop established partnerships that can add new content to existing products, and new customer solutions that are in development;

-  take advantage of opportunities to leverage its offering through asset exposure, particularly in hydrogen; and

-  strengthen the Company's balance sheet in order to allow it to maintain its baseline of investment in its petroleum products and services and undertake a broad and tax-efficient programme of R&D innovation to identify and target additional areas of opportunity in the Energy Transition.

 

·      The Company has, on 11 March 2021, exercised its option to acquire the entire issued share capital of H2 Green, with such acquisition conditional only on the approval of the Resolution by Shareholders at the General Meeting and the Placing Agreement not being terminated prior to that date.

 

·      Senior management participation and ongoing alignment demonstrated through the participation of Jonathan Copus, CEO of Getech, in the Subscription and an amendment to the terms of the H2 Green Option prior to exercise increasing the equity component of consideration payable to the CEO and COO of H2 Green by £40,000, reflecting their commitment to Getech.

 

The Placing and Subscription and Open Offer are conditional, inter alia, upon the approval of the Resolution by Shareholders at the General Meeting which is scheduled to be held at 11.00 a.m. on 30 March 2021 at the offices of the Company, at Kitson House, Elmete Hall, Elmete Lane, Leeds LS8 2LU.

 

A Circular containing the Notice of Meeting to approve a resolution authorising the allotment of up to 28,411,019 new Ordinary Shares (being the maximum required for the purposes of the Placing and Subscription Shares and the Open Offer Shares) and for such shares to be allotted on a non-pre-emptive basis is expected to be published by the Company and sent to Shareholders later today, together with, in the case of Qualifying Shareholders, the Application Form. In accordance with the Stay at Home Order relating to the containment and control of COVID-19, Shareholders will not be able to attend the General Meeting in person. The Circular contains details as to how Shareholders may raise questions in advance of the General Meeting and vote on the Resolution by proxy. Forms of proxy for use at the General Meeting are not being posted with the Circular. Instead, instructions are set out in the Notice of Meeting to enable Shareholders to register to vote electronically. Shareholders may request a paper form of proxy from the Registrar, Link Group if they do not have access to the Internet.

 

A copy of the Circular will be available on the Company's website at www.getech.com. The attention of Shareholders is drawn to the letter from the Chairman of the Company that is set out in the Circular and which contains, amongst other things, the Directors' unanimous recommendation that Shareholders vote in favour of the Resolution to be proposed at the General Meeting.

 

Further details of the Placing and Subscription and the Open Offer, together with the expected timetable, are set out in the extract from the Circular below.

 

Jonathan Copus, CEO of Getech Group Plc, commented:

 

"We are delighted by the support we have received from new and existing shareholders. The combination of a Placing and Subscription with institutional and other investors alongside an Open Offer both broadens our shareholder base while allowing all shareholders the opportunity to participate. We look forward to utilising the net proceeds to execute multiple growth opportunities, which we have identified through a methodical and balanced programme of business development.

 

These growth opportunities, with particular focus on the hydrogen, mining and geothermal sectors, reflect the changing shape of the global primary energy mix. This Energy Transition is occurring at an accelerated pace, which places Getech's customers in a new commercial landscape - one that is underlain by a web of complex location-based decision making. Getech's products and services can add significant value to this landscape and we are excited by the commercial opportunity that lies ahead of us."

 

Getech Group plc
Jonathan Copus, Chief Executive	Tel:  0113 322 2200
Cenkos Securities plc
Neil McDonald / Pete Lynch (Corporate Finance) Michael Johnson / Julian Morse (Sales)	Tel:  0207 397 8900
Camarco
Georgia Edmonds / James Crothers / Ollie Head	Tel: 020 3781 8331

 

Notes to editors:

 

Getech (AIM: GTC) has a well-established position within the global energy market, assisting clients with its unique combination of products and services, that utilise the Group's sub-surface skills and geospatial design and implementation capabilities alongside a deep knowledge and understanding of how to deploy data.

 

The Company is leveraging its strong market position, utilising its existing expertise, and targeting additional commercial opportunities, to de-risk and accelerate the global transition to renewable sources of energy while strengthening its existing and well-established business.

 

Getech is listed on the AIM market of the London Stock Exchange. For further information, please visit www.getech.com

 

1.    INTRODUCTION

 

The Company announces a conditional placing and subscription to raise approximately £6.0 million (before expenses) by way of the issue of 27,272,728 Placing and Subscription Shares in two tranches at the Issue Price.

 

In addition to the Placing and Subscription, in order to provide Shareholders with an opportunity to participate in the proposed issue of new Ordinary Shares, the Company is providing all Qualifying Shareholders the opportunity to subscribe at the Issue Price, payable in full on acceptance, for an aggregate of 1,138,291 Open Offer Shares, to raise up to approximately £0.25 million before expenses, on the basis of 1 new Ordinary Share for every 33 Existing Ordinary Shares held on the Record Date.

 

The Placing and Subscription and Open Offer are conditional, inter alia, upon the Shareholders passing the Resolution to be proposed at the General Meeting. Accordingly, the Circular will include notice of the General Meeting which will be held at 11.00 a.m. on 30 March 2021 at the offices of the Company, at Kitson House, Elmete Hall, Elmete Lane, Leeds LS8 2LU.

 

The purpose of this announcement is, amongst other things, to explain the background to and reasons for the Placing and Subscription and Open Offer and to explain why the Board believes that they will promote the growth and success of the Company for the benefit of the Shareholders as a whole, and to seek Shareholder approval to the passing of the Resolution at the General Meeting.

 

The Circular also contains the Directors' recommendation that Shareholders vote in favour of the Resolution. Notice of the General Meeting at which the Resolution will be proposed, is set out at the end of the Circular.

 

2.    BACKGROUND TO AND REASONS FOR THE PLACING AND SUBSCRIPTION AND OPEN OFFER

 

Introduction

 

The global primary energy mix is changing and the pace of this change is accelerating. This Energy Transition places Getech's customers into a new commercial landscape, one that is underlain by a web of complex location-based decision making. As a result, new growth opportunities are emerging for Getech to deploy its skills and technologies with both existing and new customers.

 

The Board believes that Getech's approach to the Energy Transition is methodical and balanced. The Group has identified the hydrogen, mining, and geothermal sectors, in particular, as having material growth potential where Getech can unlock value. With a well-defined growth plan in each focus sector, Getech is now working to deliver a step change in its diversification, funded by the Placing and Subscription and Open Offer.

 

The Getech Group

 

Getech provides products and services that commercialise its expertise in the development, application and deployment of the earth sciences and geospatial technology.

 

To date, the Group has principally used these skills to build and sell data, software, and analytical products to petroleum market customers. These are used by a blue-chip list of global customers to locate and improve the management of their energy and natural resource assets.

 

Through these activities, Getech grew its annually-recurring revenue by 53 per cent. between 2017 and 2019. In the same period, the conversion of annual contracts into multi-year contracts expanded Getech's orderbook by 197 per cent. When combined with a strong culture of cost management which saw total costs lowered by 42 per cent. between 2016 and 2019, this has enhanced profitability, and Getech built net cash each year between 2016 and 2019.

 

From the foundation of increasing net cash in the three years prior to 2020 Getech has provided downside protection. In 2020, despite volatility in Getech's projects and data business lines, the Group's orderbook, annually recurring revenue and customer relationships have all proved robust. Getech retains a strong balance sheet, which is further strengthened by the asset value of Kitson House in Leeds.

 

Throughout 2020 Getech has remained focussed on its strategy to grow and diversify its commercial activities and this has accelerated a number of partnerships and opportunities, which Getech now looks to support with new funding.

 

Strategy for diversified growth in focus areas

 

Getech's products and services can already add value to a range of commercial applications in the hydrogen, mining and geothermal sectors. To maximise impact, these products and services require investment to tailor them to new markets. Getech also intends to recruit key domain experts to strengthen business development and extend the Group's sales reach.

 

Getech has established partnerships that can add new content to existing products, and new customer solutions are in development. Through this work, Getech has also identified opportunities to leverage its offering through asset exposure.

 

Getech intends to deploy the net proceeds of the Placing and Subscription and Open Offer to address the opportunities outlined below.

 

(a)   Hydrogen

 

Getech's skills and technologies map closely to the hydrogen economy and a number of the Group's petroleum customers are making significant hydrogen investments. Geoscience knowledge is essential to both carbon capture and the geological seasonal storage of hydrogen. Business opportunities also exist in the spatial establishment of the infrastructure and value chains that are needed to deliver the hydrogen economy.

 

As announced recently, Getech has entered into an exclusive strategic partnership with H2 Green, which is focused on establishing a national network of large-scale hydrogen production, storage, and retail facilities.

 

Getech is leveraging its expertise through the application of complex geospatial analytics to help H2 Green locate and build this hydrogen network. The partnership's goals are to provide commercial transport consumers with supply confidence at lower production cost, whilst also establishing a national strategic hydrogen reserve. The parties are also collaborating on various new product ideas and optimisation services with the aim of helping customers commence their transition to net zero.

 

The Company has the benefit of an exclusive option to acquire H2 Green for a total consideration of up to £1 million. Getech has now exercised the H2 Green Option pursuant to the terms of a call option notice dated 11 March 2021 and will, conditional only on the approval of the Resolution by Shareholders at the General Meeting and the Placing Agreement not being terminated prior to that date, acquire the entire issued share capital of H2 Green prior to First Admission. Completion of the acquisition of H2 Green will trigger the payment of the first two instalments of the consideration payable to the H2 Green Shareholders under the H2 Green Option, totalling £250,000. Of this amount, £196,250 (78.5 per cent.) will be satisfied through the issue of the Consideration Shares at the Issue Price with the remaining £53,750 paid in cash. This represents a £40,000 reduction in the cash component, and a £40,000 increase in the equity component of the consideration provided for under the original terms of the H2 Green Option. The increased equity weighting has been requested by the H2 Green Shareholders and reflects their commitment to Getech. The remaining payment terms are structured around commercial and financial performance milestones and a material equity component will further align the H2 Green Shareholders with Getech shareholders.

 

Getech and H2 Green's work has advanced significantly with the signature of a Memorandum of Understanding ("MoU") between H2 Green and SGN Commercial Services ("SGN"), which is a part of the SGN Group, one of the UK's largest gas network operators.

 

The MoU is focused on the regeneration and redevelopment of SGN's extensive land portfolio to create green hydrogen hubs to facilitate hydrogen generation, storage and retail for commercial transport customers (e.g buses, HGVs, trains). An initial focus list of 30 potential hydrogen hub asset locations has been agreed, and in a UK first, the parties are exploring the feasibility for green hydrogen, which would be produced on site, to be stored in redundant gas holders. The agreement also provides SGN and Getech/H2 Green a scalable exposure to a high-value network opportunity in an exciting growth market.

 

H2 Green's strategy is structured around the creating of a holding company with multiple underlying site-specific operating companies in respect of each hub. Capital investment would be raised at the operating company level, potentially from different sources, with H2 Green retaining a carried interest in that operating entity. This model scales rapidly through the planned establishment of a regional network of hydrogen hubs, which could be further built out both nationally and internationally. Following the Company's exercise of the H2 Green Option, as described above, the increased funding available through the Placing and Subscription and Open Offer will allow Getech to progress hub locations to the point of asset-level investment and construction, whilst also maximising the Group's exposure to this significant opportunity.

 

Getech's proposed acquisition of H2 Green demonstrates Getech's adaptability and the ambition, scope and materiality of the Group's zero-carbon business development activities. Scoping economics indicate that each hydrogen hub has the potential to generate multi-million-pound annual EBITDA.

 

This partnership with H2 Green provides Getech shareholders with a potential path to capturing transformative asset value and provides a platform from which Getech plans to build out into related areas of the hydrogen economy.

 

(b)   Mining

 

The technologies and infrastructure required to deliver a low carbon future rely heavily on metals and minerals. Meeting this demand is a significant challenge for the metals and mining industries.

 

Getech already counts a number of mining customers in its client base and these currently account for c.7 per cent. of Group revenue. These customers use Getech's gravity and magnetic data and its geoscience and geospatial technology services to help identify, predict, and rank potential sites for new deposits.

 

Getech's intention is to expand its footprint in this market, targeting a multi-million pound revenue opportunity. Key to delivering this is to align Getech's 'Globe' product to the needs of mineral explorers.

 

Globe already comprises many essential components that assist in targeting giant mineral deposits, but its software interface and workflows are designed for petroleum customers. However, in the last 18 months Globe has been adopted by a global minerals major and presentation of their work has driven sales interest from other mining companies.

 

To capture this commercial potential requires investment to enhance Globe's value offering to mining customers. This will include: a focus on deeper Earth processes, the extension of Globe's plate model further back in time, the update of Globe's palaeoenvironment data and an expansion of Globe's validation to include mineral occurrences and related key data.

 

To capture the full value of this work Getech intends to build its team - adding domain expertise and extending the Group's sales network - and has established commercial partnerships with companies which provide access to fresh, exciting and valuable content.

 

The work required to position Globe as an essential tool for mining will also in part bring value to existing petroleum customers and so the Group expects this investment to both expand Getech's reach into mining and strengthen its offering to Globe's current customers.

 

(c)    Geothermal

 

Heat from the Earth's interior can be harvested to provide a stable and predictable source of baseload energy. This is an advantage over key sources of renewable energy, such as wind and solar, which are variable in nature. With the petroleum majors poised to make their biggest geothermal investments in 30 years, Getech is well positioned to catch this rising wave of investment.

 

Getech already has products that add value to geothermal companies - its gravity and magnetic data are an essential tool for imaging and modelling the structure of the Earth's crust, and Getech has already developed global heat maps for its petroleum customers. These products combine with Getech's geoscience and geospatial services to provide valuable prospecting tools for geothermal exploration.

 

By integrating these products and services Getech is developing a new customer 'solution' that is branded Heat Seeker. This is positioned as a complete solution for global geothermal prospectivity analysis and site selection. Getech intends to invest further in the development and promotion of this solution, and to accelerate its commercialisation through the recruitment of domain experts.

 

Through these activities, Getech targets a multi-million-pound market opportunity - targeting data sales and recurring license-based revenue. Getech is also exploring the potential to enhance the returns that it can generate, by capturing asset exposures - a commercial model similar in nature to H2 Green.

 

(d)   Balance sheet strengthening

 

In 2020, Getech has managed its exposure to the COVID-19 business environment by striking a balance between capital preservation, preserving the capacity to deliver Getech's orderbook and delivery across a broad front of business development. However, the Group's net cash position has eroded, and a component of the net proceeds of the Placing and Subscription and Open Offer will be used to strengthen this.

 

From this position, Getech's intention is to maintain its baseline of investment in its petroleum products and services and undertake a broad and tax-efficient programme of R&D innovation to identify and target additional areas of opportunity in the Energy Transition.

 

3.    CURRENT TRADING

 

Operational update

 

2020 was dominated by the COVID-19 pandemic. For Getech this changed our working practices and led to significant reductions to customer budgets. It was also Getech's busiest year yet in terms of product releases and service enhancements. These projects were delivered on time and to cost.

 

Getech has maintained a full programme of business development - focused on the Group's strategy to leverage its skills and technologies in support of the Energy Transition. This work has identified the hydrogen, mining, and geothermal sectors as having material growth potential, where Getech can unlock value for both existing and new customers.

 

Revenue and forward sales

 

In 2020, petroleum companies cut their total spending by c.35 per cent., creating an unprecedented and challenging trading environment. Despite this, Getech won new customers and extended licence agreements and service contracts. As a result, Getech's orderbook, annually recurring revenue and customer relationships all proved robust. In contrast, revenue from short duration projects and associated sales of data was impacted as customers reduced their spend on these items.

 

Based on unaudited management accounts, revenue for the 12 months to 31 December 2020 is expected to total c.£3.6m (2019: £6.1m). In the period, Getech closed additional sales that convert to revenue after 31 December 2020. These replenished the Group orderbook, which at 31 December 2020 is expected to total £2.7 million (£2.9 million 30 June 2020; £3.1 million 31 December 2019).

 

A significant portion of this orderbook is built from recurring contracts. At 31 December 2020 Getech's Annualised Recurring Revenue is expected to total £2.1 million (£2.2 million 30 June 2020; £2.3 million 31 December 2019).

 

Costs, EBITDA and Getech cash cycle

 

With the duration of the pandemic unknown, Getech took steps in April to lower monthly costs by c.26 per cent. (from 1 May). Adjusted for £0.1 million of restructuring costs, and £0.1 million of H2 Green business development costs, Getech's cost base is expected to total c.£5.1 million¹ (2019: £6.4m).

 

The Group anticipates a small drop in Gross Margins for the year (2019: 58 per cent.) and a small adjusted EBITDA loss (2019: £0.9 million profit, adjusted for exceptional items).

 

At the end of H1 2020 Getech's cash balance was £2.8m. Across H2 2020, this balance was largely protected by the cost actions detailed above. This however is obscured by short-term year-end 'Covid' delays to receivables and customer requests to defer invoicing to early 2021. Inclusive of late cash receipts of £0.2m and deferment requests of £0.3m, the Group cash balance moved to £2.2m at the year end. These transient year-end effects to the timing of cash flows were largely resolved in January 2021.

 

¹ Excluding restructuring costs and H2 Green business development costs.  

 

Outlook

 

COVID-19 remains a source of business uncertainty but the potential for vaccines to ease lockdowns has driven a significant recovery in energy prices, with Brent crude rising to c.US$69/bbl on 5 March 2021, a threefold increase from its April 2020 low. With customer confidence fragile, we remain focused on building our orderbook, managing costs and delivering diversification.

 

At 31 December 2020 several significant license renewals and tender/service discussions were at an advanced stage of negotiation. Getech is focused on successfully concluding these discussions, which would build orderbook and/or expand recurring revenue. Getech is also exploring innovative new ways to commercialise its data - the aim being to increase the predictability of data sales.

 

In January, the announcement of Getech's hydrogen partnership with H2 Green marked a significant step in the Group's diversification work. The exercise of the H2 Green Option, as described in paragraph 2(a) above, demonstrate the ambition, scope and materiality of Getech's business development activities.

 

In line with these initiatives, Getech has recently appointed Richard Bennett as Chairman Designate. Richard brings extensive listed company experience, with a strong track-record growing technology and clean energy companies. This is the first step in a process to align Getech's Non-Executive expertise with the Company's strategy of leveraging our skills and technologies to support the Energy Transition.

 

4.    DETAILS OF THE PLACING AND SUBSCRIPTION AND THE PLACING AGREEMENT

 

Under the Placing and Subscription, the Company has conditionally raised approximately £6.0 million (before expenses) through a placing of 27,272,728 new Ordinary Shares at the Issue Price with institutional and other investors, including 45,000 new Ordinary Shares conditionally subscribed for by Jonathan Copus pursuant to the Subscription. The Company has entered into a Placing Agreement with Cenkos under which Cenkos has agreed to use its reasonable endeavours to procure Placees for the First Placing Shares and Second Placing Shares at the Issue Price. The Placing and Subscription has not been underwritten. 

 

The Placing and Subscription Shares will represent approximately 41 per cent. of the Enlarged Issued Share Capital following Second Admission. The Issue Price represents a discount of approximately 12 per cent. to the closing mid-market price on AIM of 25 pence per Ordinary Share on 11 March 2021, being the last dealing day prior to the date of this announcement. 

 

The Placing and Subscription is being conducted in two tranches and will be subject to the approval of Shareholders to allot the Placing and Subscription Shares and to disapply pre-emption rights in respect of such allotment at the General Meeting.

 

The first tranche of the Placing and Subscription will raise approximately £3.95 million (before expenses) by the issue of 17,943,952 new Ordinary Shares (being the First Placing Shares) at the Issue Price. The First Placing is conditional upon, inter alia, First Admission becoming effective at 8.00 a.m. on 31 March 2021 (or such later date as the Company and Cenkos may agree, being not later than 8.00 a.m. on 30 April 2021). The First Placing is not conditional on completion of the Second Placing or the Subscription occurring so there is a possibility that the First Placing may complete and the First Placing Shares are issued but that the Second Placing and the Subscription do not complete.

 

The second tranche of the Placing and Subscription will raise approximately £2.05 million (before expenses) by the issue of 9,283,776 new Ordinary Shares (being the Second Placing Shares) and 45,000 new Ordinary Shares (being the Subscription Shares) at the Issue Price. The Second Placing and the Subscription are conditional upon, inter alia, First Admission becoming effective. In addition, the Second Placing and the Subscription are conditional, inter alia, on Second Admission becoming effective at 8.00 a.m. on 1 April 2021 (or such later date as the Company and Cenkos may agree, being not later than 8.00 a.m. on 30 April 2021). 

 

Pursuant to the Subscription, Jonathan Copus, Getech's Chief Executive Officer, has conditionally agreed to subscribe for 45,000 Subscription Shares at the Issue Price. Following the Subscription, Jonathan Copus will hold 45,000 Ordinary Shares representing 0.07 per cent. of the Enlarged Issued Share Capital. In addition, Jonathan Copus holds 1,400,000 options over new Ordinary Shares exercisable at 24.5 pence per share and 350,000 options over new Ordinary Shares exercisable at 35 pence per share.

 

The Placing Agreement contains, inter alia, customary undertakings and warranties given by the Company in favour of Cenkos as to the accuracy of information contained in the Circular and other matters relating to the Company. Cenkos may terminate the Placing Agreement in specified circumstances prior to Admission, including, inter alia, for material breach of the Placing Agreement by the Company or of any of the warranties contained in it and in the event of a force majeure event occurring.

 

The Placing and Subscription Shares will be issued credited as fully paid and will rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive dividends and other distributions declared on or after the date on which they are issued. 

 

It is expected that CREST accounts will be credited on the relevant day of Admission and that share certificates (where applicable) will be dispatched within 10 Business Days of each Admission.

 

Application will be made to the London Stock Exchange for the Placing and Subscription Shares to be admitted to trading on AIM. It is anticipated that First Admission will become effective and that dealings in the First Placing Shares will commence at 8.00 a.m. on 31 March 2021 and that Second Admission will become effective and dealings in the Second Placing Shares, the Subscription Shares and the Open Offer Shares will commence at 8.00 a.m. on 1 April 2021.

 

5.    DETAILS OF THE OPEN OFFER

 

The Company is proposing to raise up to approximately £0.25 million before expenses under the Open Offer. Up to 1,138,291 new Ordinary Shares are available to Qualifying Shareholders pursuant to the Open Offer at the Issue Price, payable in full on acceptance. Any Offer Shares not subscribed for by Qualifying Shareholders will be available to Qualifying Shareholders under the Excess Application Facility. Qualifying Shareholders may apply for Open Offer Shares under the Open Offer at the Issue Price on the following basis:

 

1 Offer Share for every 33 Existing Ordinary Shares

 

and so in proportion for any number of Existing Ordinary Shares held on the Record Date.

 

Entitlements of Qualifying Shareholders will be rounded down to the nearest whole number of Open Offer Shares. Fractional entitlements which would otherwise arise will not be issued to the Qualifying Shareholders but will be made available under the Excess Application Facility. The Excess Application Facility enables Qualifying Shareholders to apply for Excess Shares in excess of their Open Offer Entitlement.

 

Not all Shareholders will be Qualifying Shareholders. Shareholders who are located in, or are citizens of, or have a registered office in certain Restricted Jurisdictions will not qualify to participate in the Open Offer.

 

Application has been made for the Open Offer Entitlements to be admitted to CREST. It is expected that such Open Offer Entitlements will be credited to CREST on 16 March 2021. The Open Offer Entitlements will be enabled for settlement in CREST until 11.00 a.m. on 29 March 2021. Applications through the CREST system may only be made by the Qualifying CREST Shareholder originally entitled or by a person entitled by virtue of bona fide market claims. Payment for the Open Offer Shares must be made in full on application. The latest time and date for receipt of completed Application Forms or CREST applications and payment in respect of the Open Offer is 11.00 a.m. on 29 March 2021.

 

The Open Offer is conditional on the following:

a.     the Resolution being passed at the General Meeting;

b.     the Placing Agreement not being terminated prior to Second Admission and becoming unconditional in all respects; and

c.     Admission of the Open Offer Shares becoming effective on or before 8.00 a.m. on 1 April 2021 (or such later date as the Company and Cenkos may agree, being not later than 30 April 2021).

 

Accordingly, if the Placing Agreement conditions are not satisfied or waived (where capable of waiver), the Open Offer will not proceed and the Open Offer Shares will not be issued and all monies received by Link Group will be returned to the applicants (at the applicants' risk and without interest) as soon as possible thereafter. Any Open Offer Entitlements admitted to CREST will thereafter be disabled.

 

Application will be made for the Open Offer Shares to be admitted to trading on AIM. It is expected that dealings in the Open Offer Shares will commence on AIM at 8.00 a.m. on 1 April 2021.

 

6.    GENERAL MEETING AND THE RESOLUTION

 

Set out at the end of the Circular is the notice convening a General Meeting of the Company to be held at 11.00 a.m. on 30 March 2021 at the offices of the Company, at Kitson House, Elmete Hall, Elmete Lane, Leeds LS8 2LU at which the Resolution will be put to the Company's Shareholders. The Resolution to be proposed at the General Meeting seeks authority in accordance with section 551 of the Act for the Directors to allot up to 28,411,019 new Ordinary Shares (being the maximum required for the purposes of issuing the Placing and Subscription Shares and the Open Offer Shares) and for such shares to be allotted on a non-pre-emptive basis to Placees and to Shareholders who validly accept the Open Offer. The Resolution does not replace the Directors' existing authorities to allot equity securities or to allot Ordinary shares for cash on a non pre-emptive basis which were passed at the Company's annual general meeting in July 2020, which will remain in force until the 2021 annual general meeting (or, if earlier, 23 October 2021).

 

7.    ACTION TO BE TAKEN BY SHAREHOLDERS

 

In accordance with the Stay at Home Order relating to the containment and control of COVID-19, Shareholders will not be able to attend the General Meeting in person. The Board will be implementing the following measures in respect of the General Meeting:

 

·      we expect only two Shareholders nominated by the Board to attend the General Meeting in person in order to satisfy the quorum requirements set out in the Articles to conduct the business of the meeting;

·      no other Directors will be present in person;

·      other Shareholders will not be permitted to attend the General meeting and, if they attempt to do so, will be refused entry to the meeting in line with the Stay at Home Order;

·      voting at the General Meeting will be carried out by way of a poll so that votes cast in advance appointing the chairman of the meeting as Shareholders' proxy can be taken into account. Shareholders who cannot attend are urged to appoint the chairman of the General Meeting as their proxy for this purpose;

·      relevant questions related to the General Meeting from Shareholders can be raised in advance of the General Meeting and, in so far as is relevant to the business of the meeting, will be responded to by email and taken into account as appropriate at the General Meeting itself; and

·      as usual, the results of the General Meeting will be announced as soon as practicable after it has taken place.

 

Shareholders will not receive a form of proxy for the General Meeting unless requested from the Registrar, Link Group. Instead you will find instructions in the "Notes" to the Notice of Meeting to enable you to vote electronically and how to register to do so. To register, you will need your Investor Code, which can be found on your share certificate.

 

Proxy votes should be submitted as early as possible and in any event by no later than 11.00 a.m. on 26 March 2021 (or, in the case of an adjournment, no later than 48 hours, excluding non-Business Days, before the time fixed for the holding of the adjourned meeting).

 

The Company is actively following developments relating to COVID-19 and will issue further information through a Regulatory Information Service and/or on its website at www.getech.com if it becomes necessary or appropriate to make any alternative arrangements for the General Meeting.

 

Action to be taken in respect of the Open Offer

 

Qualifying Non-CREST Shareholders

 

If you are a Qualifying Non-CREST Shareholder you will have received an Application Form which gives details of your maximum entitlement under the Open Offer (as shown by the number of Open Offer Entitlements allocated to you). If you wish to apply for Open Offer Shares under the Open Offer (whether in respect of your Open Offer Entitlement or both your Open Offer Entitlement and any entitlement under the Excess Application Facility), you should complete the accompanying Application Form in accordance with the procedure for application set out in paragraph 3 of Part 3 ("Terms and conditions of the Open Offer") of the Circular and on the Application Form itself.

 

Qualifying CREST Shareholders

 

If you are a Qualifying CREST Shareholder and do not hold any Ordinary Shares in certificated form, no Application Form accompanies the Circular and you will receive a credit to your appropriate stock account in CREST in respect of the Open Offer Entitlements representing your maximum entitlement under the Open Offer except (subject to certain exceptions) if you are an Overseas Shareholder who has a registered address in, or is a resident in or a citizen of a Restricted Jurisdiction. Applications by Qualifying CREST Shareholders for Excess Shares in excess of their Open Offer Entitlements should be made in accordance with the procedures set out in paragraph 3 of Part 3 of the Circular, unless you are an Overseas Shareholder in which event, applications should be made in accordance with the procedures set out in paragraph 7 of Part 3 of the Circular.

 

8.    RECOMMENDATION

 

The Directors unanimously believe that the Placing and Subscription and the Open Offer are in the best interests of the Company and its Shareholders and unanimously recommend Shareholders to vote in favour of the Resolution as they intend to do in respect of their own beneficial holdings in the Company.

 

PLACING AND SUBSCRIPTION AND OPEN OFFER STATISTICS

 

Number of Existing Ordinary Shares in issue at the date of this announcement	37,563,615
Issue Price	22 pence
Number of First Placing Shares	17,943,952
Number of Second Placing Shares	9,283,776
Number of Subscription Shares	45,000
Total number of Placing and Subscription Shares	27,272,728
Gross Placing and Subscription proceeds	Approximately £6.0 million
Basis of Open Offer	1 Open Offer Share for every 33 Existing Ordinary Shares
Maximum number of Open Offer Shares*	1,138,291
Maximum gross proceeds of Open Offer*	Approximately £0.25 million
Estimated net proceeds of the Placing and Subscription and Open Offer*	Approximately £5.72 million
Number of Consideration Shares	892,046
Issued share capital immediately following First Admission	56,399,613
Enlarged Issued Share Capital immediately following Second Admission*	66,866,680
Placing and Subscription Shares as a percentage of the Enlarged Issued Share Capital following Second Admission*	41 per cent.
New Shares as a percentage of the Enlarged Issued Share Capital following Second Admission*	44 per cent.
Market capitalisation of the Company at Second Admission at the Issue Price*	£14.7 million
Ordinary Share ISIN	GB00B0HZVP95
Basic Open Offer Entitlement ISIN	GB00BMVMDK99
Excess CREST Open Offer Entitlement ISIN	GB00BMVMDL07

                                                                                                                         

* Assuming maximum number of Open Offer Shares are subscribed for

 

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

 

Record Date for the Open Offer	6.00 p.m. on 10 March 2021
Announcement of the Placing and Subscription and Open Offer	12 March 2021
Posting of the Circular and, to Qualifying Non-CREST Shareholders, the Application Form	12 March 2021
Ex-entitlement Date for the Open Offer	15 March 2021
Open Offer Entitlements and Excess CREST Open Offer Entitlements credited to stock accounts of Qualifying CREST Shareholders in CREST	As soon as practical after 8.00 a.m. on 16 March  2021
Latest recommended time and date for requesting withdrawal of Open Offer Entitlements from CREST	4.30 p.m. on 23 March 2021
Latest time and date for depositing Open Offer Entitlements into CREST	3.00 p.m. on 24 March 2021
Latest time and date for splitting of Application Forms under the Open Offer (to satisfy bona fide market claims only)	3.00 p.m. on 25 March 2021
Latest time and date for receipt of proxy voting instructions for the General Meeting	11.00 a.m. on 26 March 2021
Latest time and date for receipt of the completed Application Form and appropriate payment in respect of Open Offer Shares or settlement of relevant CREST instruction	11.00 a.m. on 29 March 2021
General Meeting	11.00 a.m. 30 March 2021
Announcement of result of General Meeting and Placing and Subscription and Open Offer	30 March 2021
Completion of the acquisition by the Company of H2 Green	30 March 2021
Admission and commencement of dealings of the First Placing Shares on AIM	8.00 a.m. on 31 March 2021
CREST accounts credited in respect of the First Placing Shares (subject to First Admission)	31 March 2021
Admission and commencement of dealings of the Second Placing Shares, Subscription Shares and Open Offer Shares on AIM	8.00 a.m. on 1 April 2021
CREST accounts credited in respect of the Placing and Subscription Shares and Open Offer Shares	1 April 2021
Where applicable, expected date for dispatch of definitive share certificates for Placing and Subscription Shares and Open Offer Shares in certificated form	Within 10 Business Days of Second Admission

 

Note: All references to times in this timetable are to London times and each of the times and dates are indicative only and may be subject to change. Any such change will be notified by an announcement on a Regulatory Information Service.

 

DEFINITIONS

 

In this announcement, the following expressions shall have the following meanings, unless the context otherwise requires:

 

"Act"	the Companies Act 2006 (as amended)
"Admission"	in respect of the: ·      Placing and Subscription Shares means First Admission and/or Second Admission (as the context requires) ·      Open Offer Shares means admission of the Open Offer Shares to trading on AIM becoming effective in accordance with the AIM Rules ·      Consideration Shares means admission of the Consideration Shares to trading on AIM becoming effective in accordance with the AIM Rules
"AIM"	the market of that name operated by the London Stock Exchange
"AIM Rules"	the AIM Rules for Companies as published and amended from time to time by the London Stock Exchange
"Application Form"	the application form relating to the Open Offer and enclosed with the Circular for use by Qualifying Non-CREST Shareholders
"Articles"	the articles of association of the Company (as amended from time to time)
"Board" or "Directors"	the directors of the Company whose names are set out on page 5 of the Circular, or any duly authorised committee thereof
"Business Day"	any day on which banks in London are open for business (excluding Saturdays, Sundays and public holidays)
"Cenkos"	Cenkos Securities plc, the Company's nominated adviser and sole broker
"certificated" or "in certificated form"	where an Ordinary Share is not in uncertificated form (i.e. not in CREST)
"Circular"	the Circular to Shareholders in connection with the Placing and Subscription and Open Offer dated on or around the date of this announcement
"Company" or "Getech"	Getech Group plc
"Consideration Shares"	the 892,046 Ordinary Shares to be issued to the H2 Green Shareholders in part consideration of the transfer of the entire issued share capital of H2 Green to the Company pursuant to the H2 Green Option
"CREST"	the relevant system for the paperless settlement of trades and the holding of uncertificated securities operated by Euroclear in accordance with the CREST Regulations
"CREST Manual"	the CREST Manual referred to in agreements entered into by Euroclear and available at www.euroclear.com
"CREST member"	a person who has been admitted to CREST as a system-member (as defined in the CREST Regulations)
"CREST member account ID"	the identification code or number attached to a member account in CREST
"CREST participant"	a person who is, in relation to CREST, a system-participant (as defined in the CREST Regulations)
"CREST participant ID"	shall have the meaning given in the CREST Manual
"CREST payment"	shall have the meaning given in the CREST Manual
"CREST Regulations"	the Uncertificated Securities Regulations 2001 (SI 2001/3755) including any enactment or subordinate legislation which amends or supersedes those regulations and any applicable rules made under those regulations or any such enactment or subordinate legislation for the time being in force
"CREST sponsor"	a CREST participant admitted to CREST as a CREST sponsor
"CREST sponsored member"	a CREST member admitted to CREST as a CREST sponsored member
"enabled for settlement"	in relation to Open Offer Entitlements or entitlements to Excess Shares, enabled for the limited purpose of settlement of claim transactions and unmatched stock event transactions (each as described in the CREST Manual issued by Euroclear)
"Enlarged Issued Share Capital"	66,866,680 Ordinary Shares, being the issued ordinary share capital of the Company immediately following Second Admission, assuming no exercise of existing options or warrants over Ordinary Shares and the take up of the Open Offer in full
"Euroclear"	Euroclear UK & Ireland Limited
"Excess Application Facility"	the arrangement pursuant to which Qualifying Shareholders may apply for additional Open Offer Shares in excess of their Open Offer Entitlement in accordance with the terms and conditions of the Open Offer
"Excess CREST Open Offer Entitlement"	in respect of each Qualifying CREST Shareholder, their entitlement (in addition to their Open Offer Entitlement) to apply for Open Offer Shares pursuant to the Excess Application Facility, which is conditional on them taking up their Open Offer Entitlement in full
"Excess Shares"	Ordinary Shares applied for by Qualifying Shareholders under the Excess Application Facility
"Ex-entitlement Date"	the date on which the Existing Ordinary Shares are marked "ex" for entitlement under the Open Offer, being 15 March 2021
"Existing Ordinary Shares"	the 37,563,615 Ordinary Shares in issue as at the date of this announcement or (as the context requires) any of such shares
"FCA"	the Financial Conduct Authority of the United Kingdom
"First Admission"	admission of the First Placing Shares and the Consideration Shares to trading on AIM becoming effective in accordance with Rule 6 of the AIM Rules which is expected to take place on 31 March 2021
"First Placing"	the placing by Cenkos on behalf of the Company of the First Placing Shares at the Issue Price pursuant to the terms of the Placing Agreement
"First Placing Shares"	the 17,943,952 new Ordinary Shares which have been conditionally placed by Cenkos with Placees pursuant to the First Placing
"FSMA"	the Financial Services and Markets Act 2000 (as amended)
"General Meeting"	the general meeting of the Company convened for 11.00 a.m. on 30 March 2021 at Kitson House, Elmete Hall, Elmete Lane, Leeds LS8 2LU, notice of which is set out at the end of the Circular
"Group"	the Company and its subsidiaries from time to  time
"H2 Green"	H2 Green Ltd
"H2 Green Option"	the exclusive option for the Company to acquire the entire issued share capital of H2 Green pursuant to an option agreement dated 2 November 2020 between the Company, the H2 Green Shareholders and H2 Green
"H2 Green Shareholders"	Luke Johnson and Ian Spencer
"ISIN"	International Securities Identification Number
"Issue Price"	22 pence per New Share
"Link Group"	a trading name of Link Market Services Limited
"London Stock Exchange"	London Stock Exchange plc
"Money Laundering Regulations"	the Money Laundering, Terrorist Financing and Transfer of Funds (Information on Payer) Regulations 2017 and obligations in connection with money laundering under the Criminal Justice Act 1993 and the Proceeds of Crime Act 2002 (each as amended)
"New Shares"	the First Placing Shares, the Second Placing Shares, the Subscription Shares, the Consideration Shares and the Open Offer Shares
"Notice of Meeting"	the notice convening the General Meeting which is set out at the end of the Circular
"Official List"	the Official List maintained by the FCA
"Open Offer"	the conditional invitation to Qualifying Shareholders to apply for the Open Offer Shares at the Issue Price on the terms and conditions outlined in the Circular and, where relevant, in the Application Form
"Open Offer Entitlement"	the pro rata basic entitlement for Qualifying Shareholders to subscribe for 1 Open Offer Share for every 33 Existing Ordinary Shares held on the Record Date pursuant to the Open Offer
"Open Offer Shares"	up to 1,138,291 new Ordinary Shares to be issued pursuant to the Open Offer
"Ordinary Shares"	ordinary shares of 0.25 pence each in the Company
"Overseas Shareholders"	Shareholders with registered addresses, or who are citizens or residents of, or incorporated in a Restricted Jurisdiction
"Placees"	those persons who have conditionally agreed to subscribe for First Placing Shares and Second Placing Shares
"Placing and Subscription"	together, the First Placing, the Second Placing and the Subscription
"Placing Agreement"	the conditional agreement dated 12 March 2021 between the Company and Cenkos relating to the Placing and Subscription and Open Offer
"Placing and Subscription Shares"	the First Placing Shares and/or the Second Placing Shares and/or the Subscription Shares (as the context requires)
"Qualifying CREST Shareholders"	Qualifying Shareholders holding Existing Ordinary Shares, which, on the register of members of the Company on the Record Date, are in a CREST account
"Qualifying Non-CREST Shareholders"	Qualifying Shareholders holding Existing Ordinary Shares, which, on the register of members of the Company on the Record Date, are in certificated form
"Qualifying Shareholders"	holders of Existing Ordinary Shares on the register of members of the Company at the Record Date (but excluding, subject to certain exceptions, any Overseas Shareholder who is located or resident or who has a registered address in, or who is a citizen of, the United States of America or any other Restricted Jurisdiction)
"Receiving Agent"	Link Group, Corporate Actions, 10th Floor, Central Square, 29 Wellington Street, Leeds, LS1 4DL
"Regulation S"	Regulation S under the Securities Act
"Record Date"	6.00 p.m. on 10 March 2021 being the latest time by which transfers of Existing Ordinary Shares must be received for registration by the Company in order to allow transferees to be recognised as Qualifying Shareholders
"Restricted Jurisdiction"	the United States, Canada, Australia, New Zealand, the Republic of South Africa, the Republic of Ireland or Japan, and any of their territories or possessions
"Resolution"	the special resolution set out in the notice of the General Meeting at the end of the Circular
"Second Admission"	admission of the Second Placing Shares, the Subscription Shares and the Open Offer Shares to trading on AIM becoming effective in accordance with Rule 6 of the AIM Rules which is expected to take place on 1 April 2021
"Second Placing"	the placing by Cenkos on behalf of the Company of the Second Placing Shares at the Issue Price pursuant to the terms of the Placing Agreement
"Second Placing Shares"	the 9,283,776 new Ordinary Shares which have been conditionally placed by Cenkos with Placees pursuant to the Second Placing
"Securities Act"	the U.S. Securities Act of 1933, as amended
"Shareholders"	holders of Existing Ordinary Shares
"Stay at Home Order"	the Health Protection (Coronavirus, Restrictions) (No. 3) and (All Tiers) (England) Regulations 2021
"Subscription"	the subscription for the Subscription Shares at the Issue Price pursuant to the Subscription Agreement
"Subscription Agreement"	the agreement between the Company and Jonathan Copus relating to the Subscription
"Subscription Shares"	the 45,000 new Ordinary Shares which have been conditionally subscribed for pursuant to the Subscription
"United Kingdom" or "UK"	the United Kingdom of Great Britain and Northern Ireland
"£"	UK pounds sterling, being the lawful currency of the United Kingdom
"€" or "Euros"	a lawful currency of certain member states of the European Union