(Sharecast News) - Verditek announced on Wednesday that it has reached a preliminary agreement to sell its solar business in a deal involving the establishment of a new company, 'Newco', by the holders of its secured convertible loan notes.
The AIM-traded firm said the proposed transaction would involve the sale of the solar business for £0.53m, to be satisfied through the surrender of the notes, along with an additional £50,000 in cash on completion.
As part of the transaction, the company said it would transfer its shareholder loan to Newco for nominal consideration on completion.
The bondholders had further agreed to provide a loan facility of up to €0.1m to fund the operating expenses of the solar business, effective from 6 February, subject to prior written agreement.
Verditek said the bondholders had been granted exclusive negotiating rights until 29 February, with completion of the proposed transaction conditional on further due diligence, the agreement of definitive sale and purchase documentation, and shareholder consent.
On completion of the sale, Verditek said it would be classified as a cash shell under the AIM rules, necessitating the acquisition of new assets within six months to avoid the cancellation of trading on AIM.
Discussions were underway with a prospective new management team to raise £0.3m and pursue a reverse takeover within the specified timeframe.
Nevertheless, there was no guarantee that the proposal would proceed as planned.
The board said the solar business to be sold included the issued share capital of Verditek Solar Italy (VSI), associated intellectual property rights, interests in the net zero valley term sheet and related memorandum of understanding with SerendipEquity Manco, and the joint development project with Paragraf, among other assets.
In terms of assets, the interim accounts for the first half of 2023 showed £0.11m in plant and machinery and £0.7m in stock and inventory belonging to VSI.
Additionally, the company holds an ICSI bond at a historic book value of £0.56m.
Gavin Mayhew, a former non-executive director of the company and a bondholder, is involved in the transaction, constituting a related party transaction under the AIM rules.
The current directors, after consultation with the company's nominated adviser WH Ireland, believed the terms of the disposal and the loan agreement were fair and reasonable for shareholders.
Verditek said it would issue a circular to shareholders shortly, providing further details on the proposed transaction and seeking shareholder consent at a general meeting for the disposal, and granting authority for the directors to issue further shares.
At 1327 GMT, shares in Verditek were down 32.66% at 0.1p.
Reporting by Josh White for Sharecast.com.
