\u2022 Subscription ratio: 1 new shares for 3 existing shares
\n\u2022 Subscription price: \u20ac9.50 per new share
\n\u2022 Trading period for the rights: from July 18, 2018 to July 26, 2018 inclusive
\n\u2022 Subscription period: from July 20, 2018 to July 30, 2018 inclusive<\/p>\n
PARIS \u2013 July 16, 2018 – Electro Power Systems S.A. (\u201cEPS\u201d) a technology pioneer in energy storage systems and microgrids, listed on the regulated market Euronext Paris (EPS:FP), announces today the terms of its capital increase with shareholders\u2019 preferential subscription rights for a gross amount of approximately \u20ac30.3 million (the \u201cRight Issue\u201d).
\nThe net proceeds will be use to reimburse financings coming due in the amount of \u20ac12.4 million (including the first tranche of \u20ac10 million due under the EIB Loan Reimbursement), with the remainder intended to serve, with the Company\u2019s cash on hand and bank financing sources, to finance additional working capital needs (in the amount of \u20ac11 million over the next twelve months), and in particular the 2020 Strategic Plan (notably investment in R&D and technology) and complementary activities in relation to the implementation of Project Development (including implementation of necessary commercial infrastructure).
\nCarlalberto Guglielminotti, Chief Executive Officer of EPS, comments: \u00ab This transaction is a way to share with our shareholders our 2020 Strategic Plan, enabling in parallel an acceleration of our project development activities focused on microgrids in emerging economies. With our technology we can bring 24\/7 renewable and cheaper energy to any city, village, community or island powered by fossil fuels, and provide for a real solution to the 1 billion people that today have no access to electricity. Leveraging the partnership with Engie we now have a global reach, and this transaction will boost our commitment towards access to affordable and reliable renewable energy for everybody \u00bb.<\/p>\n
Main terms of the Rights Issue
\nThe Rights Issue will be carried out with shareholders\u2019 preferential subscription rights (\u201cRights\u201d) by the issuance of 3,191,715 new shares at a price of \u20ac9.50 per new share, representing gross proceeds of \u20ac30,321,292.50 including issue premium.
\nEach shareholder of EPS will receive one Right for each share held as of the close of trading on July 17, 2018. Three Rights will entitle the holder to subscribe on an irreducible basis to one new share. On the basis of the closing price of EPS\u2019 shares on July 12, 2018 (i.e. \u20ac12.05), the theoretical value of each Right is \u20ac0.64.
\nSubscriptions subject to reduction (\u00e0 titre r\u00e9ductible) will be accepted but remain subject to reduction in the event of oversubscription. Any new shares not subscribed through irrevocable entitlement (\u00e0 titre irr\u00e9ductible) will be distributed and allocated to the Rights holders having submitted additional subscription orders subject to reduction (\u00e0 titre r\u00e9ductible).
\nThe Rights Issue will be open to the public in France only.
\nThe subscription price for the new shares has been set at \u20ac9.50 per share (nominal value of \u20ac0.20 and issue premium of \u20ac9.30). The subscription price represents a 16.76% discount to the theoretical ex-right price.
\nEPS has committed to a lock-up period ending 180 calendar days after the date of settlement-delivery of the Rights Issue (subject to certain exceptions).<\/p>\n
Soci\u00e9t\u00e9 G\u00e9n\u00e9rale is acting as Global Coordinator and Joint Bookrunner of the Rights Issue. Gilbert Dupont is acting as Joint Bookrunner of the Rights Issue.<\/p>\n
Subscription commitment
\nENGIE (through its subsidiary GDF International), which owns 59.89% of EPS\u2019 capital and voting rights, informed EPS of its irrevocable commitment to subscribe on an irreducible basis (\u201c\u00e0 titre irr\u00e9ductible\u201d) to the Rights Issue for 1 911 552 new shares and on a reducible basis (\u201c\u00e0 titre r\u00e9ductible\u201d) for 1 280 163 new shares, in such a way to ensure that the Rights Issue subscription will reach 100%.<\/p>\n
Indicative timetable
\nThe subscription period for the new shares will run from July 20, 2018 to the close of trading on July 30, 2018. The Rights will be listed and traded on the regulated market of Euronext in Paris (\u201cEuronext Paris\u201d) under ISIN code FR0013347457 from July 18, 2018 to July 26, 2018. Any Rights not exercised before the end of the subscription period, i.e., the close of business on July 30, 2018, will be void.
\nThe settlement-delivery and the listing of the new shares are expected to occur on August 8, 2018. The new shares will carry full rights (jouissance courante). They will be immediately fungible with EPS\u2019 existing shares and will be traded on the same listing line under the ISIN code FR0012650166.<\/p>\n
Recent events and outlook
\nRevenues for fiscal year 2017
\nEPS\u2019 consolidated revenues for fiscal year 2017 increased by 40% to \u20ac9.9 million, an increase of \u20ac2.6 million compared with 2016.
\nFinancial information as of March 31, 2018 published on May 15, 2018
\nConsolidated revenues increased by 134%, amounting to \u20ac0.5 million on an IFRS 15 basis and \u20ac3.6 million according to IAS 11, the standard used for comparison with the first quarter of 2017.
\nThe Cash Position as of March 31, 2018, represented by liquid assets, amounted to \u20ac5.3 million compared to \u20ac4.2 million at the end of 2017. A portion of the liquid assets serve as cash collateral to guarantee the financing received by the Group that is included in net debt. The Group considers that \u20ac3.3 million of this cash collateral is liquid to the extent that the release of the guarantee is under its control.<\/p>\n
2020 Strategic Plan
\nOn 23 May 2017, EPS published the paper \u2018Energy Transition Technology Roadmap, distinguishing Hype from Reality. 2020 Strategic Technological Plan and Business Targets\u2019, which includes the 2020 Strategic Plan. The plan describes the evolution ongoing in terms of the technological challenges addressed by the Group, the business development strategy and the related financial targets to 2020.<\/p>\n
\u2022 within developed economies, EPS expects (in view of the references obtained, in particular with Terna, Enel, Edison and Engie) to reach a share of at least 1% of the European market and 0.4% of the overall market of developed countries, taking into account the size of the market in 2020 for the deployment of storage represented by 14 GW worldwide, of which only 5.6 GW in Europe. EPS’ objective is to deploy Network Connected Solutions in developed countries at the rate of 60 MW of additional annual installed base representing an EPC-based turnover of approximately 30 million euros from 2020;<\/p>\n
\u2022 in emerging countries, the EPS objective is to replace, from 2020, at least 0.3% of the new diesel capacity installed, estimated at 29 GW per year (including 50% for primary electricity production and including 14 GW of generators of more than 300 kW , which are the main EPS target for diesel replacement) by micro-grids and off-grid solutions. Based on an estimate price of 1.4 million euros per MW (internal estimate for price \/ MW), it represents an addressable market (for the production of primary electricity) of 20 billion euros. EPS\u2019 objective is to deploy micro-networks and off-network solutions at a rate of 50 MW per year, representing EPC-based revenues of around 70 million euros from 2020.<\/p>\n
In terms of target countries:
\n\u2022 in Asia Pacific, the priority for EPS will be Indonesia, Thailand, Vietnam, Malaysia, the Philippines and Bangladesh, which together currently represent an installed generation capacity connected to the grid of 195 GW, of which 56 GW have been added in the last 5 years (excluding 35 GW of additional diesel capacity over the same period, which will be used not only for backup applications but also for primary electricity generation). In this context, even taking a cautious view of stable growth in additional capacity in the coming years (without taking into account the potential for growth linked to economic development and rural migration to cities), this should represent 7 GW of additional installed capacity per year;<\/p>\n
\u2022 the figures in Africa are similar to those in Asia-Pacific. The countries that EPS intends to target in particular are South Africa, Egypt and Nigeria, which together currently represent an installed generation capacity connected to the grid of 94 GW, of which 18 GW have been added in the last 5 years (excluding 35 GW of additional diesel capacity over the same period, as in Asia Pacific). Still assuming conservative assumptions, this should represent 7 GW of additional installed capacity per year.<\/p>\n
These targets are based on conservative market penetration assumptions that do not take into account the potential replacement of the diesel fleet currently installed in emerging countries. They are all the more robust today with the Acquisition by ENGIE, which has dedicated Business Units in Asia Pacific and Africa and which has a strategy largely focused on Micro-Networks and Non-Network Solutions.
\nIn addition, these targets for 2020 are consistent with the Order Intake (40.5 MW, or approximately 16.6 million euros for fiscal 2017), the Project Backlog (21.6 million euros) and the Pipeline (150 million euros) as of May 15, 2018.
\nIn terms of profitability, the Company expects to stabilize its gross margin at around 40% in 2020 and, as a result, to reach an EBITDA (excluding expenses related to stock option plans and warrants) target of around 30%.
\nIn the context of the preparation of the tender offer of GDF International for the shares and the warrants of the Company, the Company communicated a financial model (in its December 2017 version) to the financial advisor of GDF International and to Associ\u00e9 en Finance (the Company\u2019s independent expert) for the purpose of their valuation of the Company.
\nIn order to, as required, level the information playing field with respect to the information it considered key in its valuation of the Company, GDF International included certain items of this financial model in its tender offer prospectus (Section 2.3.3 \u201cBusiness Plan used\u201d, under the caption \u201cCompany Business Plan 2017-2020\u201d)(the \u201c2017-2020 Forward Looking Information Included in the Tender Offer Prospectus\u201d).
\nThus, in the 2017-2020 Forward Looking Information Included in the Tender Offer Prospectus, there are some forward looking data on which the Company had not communicated in the past and which show differences with the 2020 targets of the Company. Notably, these forward-looking data include a 2020 EBITDA margin target of 26%, whereas the 2020 targets communicated by the Company in May 2017 and confirmed above (the \u201c2020 Targets of the Company\u201d) include a 2020 EBITDA margin target of approximately 30%.
\nThis difference results from the fact that the December 2017 version of the 2020 financial model reflected more conservative assumptions. Indeed, potential bidders for a controlling block of the Company, including Engie, believed, inter alia, (i) that the breakdown of the 2020 installed base between Microgrids and Off Grid Solutions on the one hand, and Grid Support Solutions on the other, would be different, and (ii) that the cost per MW of the systems would be different, these two parameters impacting the EBITDA margin.
\nThe Board of Directors of the Company was informed of this adjusted 2020 financial model. Yet, it considered that it was not necessary to revise the 2020 Targets of the Company that it had approved through the 2020 Strategic Plan, in particular with respect to the assumptions with respect to the 2020 electricity prices that had been used then. As of the date hereof, these assumptions have been confirmed in recent publications. Further, the Board of Directors maintained the installed base breakdown.
\nThe Company confirms the 2020 Targets of the Company and considers that, from its standpoint, it is the 2020 Targets of the Company that have to be considered by investors. As to those of the 2017-2020 Forward Looking Information Included in the Tender Offer Prospectus on which it had not communicated before, the Company does not intend to communicate on these in the future, undertakes no obligation to update them and takes no responsibility if these were to be different.<\/p>\n
Information available to the public
\nThe prospectus, filed with the French financial markets authority (Autorit\u00e9 des march\u00e9s financiers – \u201cAMF\u201d) under number 18-314 dated July 13, 2018 (the \u201cProspectus\u201d) consisting of the registration document (the \u201cRegistration Document\u201d) of EPS registered with the AMF on the same day under number R.18-057 and a securities note (the \u201cSecurities Note\u201d), including a summary of the Prospectus, may be obtained free of charge from EPS\u2019 registered office (13, avenue de l\u2019Op\u00e9ra, 75001 Paris, France) and is also available on EPS\u2019 website (www.electropowersystems.com) and the AMF\u2019s website (www.amf-france.org).
\nEPS draws investors\u2019 attention to the risk factors described in chapter 4 of the Registration Document as well as in section 2 of the Securities Note.<\/p>\n
Upcoming events
\nHalf-Year 2018 Results: 28 September 2018<\/p>\n
Disclaimer
\nThis announcement does not, and shall not, in any circumstances constitute a public offering nor an invitation to the public in connection with any offer.
\nThe distribution of this document may be restricted by law in certain jurisdictions. Persons into whose possession this document comes are required to inform themselves about and to observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.
\nThis announcement is an advertisement and not a prospectus within the meaning of Directive 2003\/71\/EC of the European Parliament and of the Council of 4 November 2003, as amended (the \u201cProspectus Directive\u201d).
\nWith respect to the member States of the European Economic Area which have implemented the Prospectus Directive, no action has been undertaken or will be undertaken to make an offer to the public of the securities referred to herein requiring a publication of a prospectus in any relevant member State other than France. As a result, the securities may not and will not be offered in any relevant member State other than France except in accordance with the exemptions set forth in Article 3(2) of the Prospectus Directive, if they have been implemented in that relevant member State, or under any other circumstances which do not require the publication by EPS of a prospectus pursuant to Article 3 of the Prospectus Directive and\/or to applicable regulations of that relevant member State.
\nFor the purposes of the provisions above, the expression \u201coffer to the public\u201d in relation to any securities in any relevant member State, means any communication, to individuals or legal entities, in any form and by any means, of sufficient information on the terms and conditions of the offering and on the securities to be offered, thereby enabling an investor to decide to purchase or subscribe for the securities, as the same may be varied in that relevant member State.
\nThese selling restrictions with respect to relevant member States apply in addition to any other selling restrictions which may be applicable in the relevant member States.
\nThis document may not be distributed, directly or indirectly, in or into the United States of America. This document is not an offer of securities for sale nor the solicitation of an offer to purchase securities in the United States of America or any other jurisdiction where such offer may be restricted. Securities may not be offered or sold in the United States of America absent registration under the U.S. Securities Act of 1933, as amended (the \u201cSecurities Act\u201d), or an exemption from registration. The securities of EPS have not been and will not be registered under the Securities Act, and EPS does not intend to make an offer of its securities in the United States of America.
\nThis document is only being distributed to, and is only directed at, persons in the United Kingdom that (i) are \u201cinvestment professionals\u201d falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the \u201cOrder\u201d), (ii) are persons falling within Article 49(2)(a) to (d) (\u201chigh net worth companies, unincorporated associations, etc.\u201d) of the Order, or (iii) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of Article 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as \u201cRelevant Persons\u201d). This document is directed only at Relevant Persons and must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this document relates is available only to Relevant Persons and will be engaged in only with Relevant Persons. Any person other than a Relevant Person should not act or rely on this document or any of its content.
\nAny investment decision to buy securities must be made solely on the basis of publicly available information regarding EPS.
\nThis document may not be distributed, directly or indirectly, in or into the United States of America, Australia, Canada or Japan.<\/p>\n","protected":false},"excerpt":{"rendered":"
\u2022 Subscription ratio: 1 new shares for 3 existing shares \u2022 Subscription price: \u20ac9.50 per new share \u2022 Trading period for the rights: from July 18, 2018 to July 26, 2018 inclusive \u2022 Subscription period: from July 20, 2018 to July 30, 2018 inclusive PARIS \u2013 July 16, 2018 – Electro Power Systems S.A. (\u201cEPS\u201d)… Continua a leggere Launch of approximately \u20ac30.3 million rights issue to finance the 2020 Strategic Plan<\/span><\/a><\/p>\n","protected":false},"author":3,"featured_media":13118,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"image","meta":[],"categories":[7,13],"tags":[37],"_links":{"self":[{"href":"https:\/\/devplugin.interactionfarm.com\/index.php?rest_route=\/wp\/v2\/posts\/13116"}],"collection":[{"href":"https:\/\/devplugin.interactionfarm.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/devplugin.interactionfarm.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/devplugin.interactionfarm.com\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/devplugin.interactionfarm.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=13116"}],"version-history":[{"count":0,"href":"https:\/\/devplugin.interactionfarm.com\/index.php?rest_route=\/wp\/v2\/posts\/13116\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/devplugin.interactionfarm.com\/index.php?rest_route=\/wp\/v2\/media\/13118"}],"wp:attachment":[{"href":"https:\/\/devplugin.interactionfarm.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=13116"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/devplugin.interactionfarm.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=13116"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/devplugin.interactionfarm.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=13116"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}