RE: Reasons to be Cheerful27 Oct 2021 15:53
I was referring to the RNS
https://www.lse.co.uk/rns/MUST/half-year-report-4qqtmxk9z1cv8ul.html
As announced on 27 April 2021 the Company acquired a 22.1% interest in VRFB Holdings Limited (VRFB-H) for a consideration of US$7,524,000. The investment was financed through the issue of $8,000,000 Convertible Loan Notes (CLNs) that bear 10% interest per annum, with surplus funds being used to pay costs associated with the investment and working capital. VRFB-H owns a 50% interest in Enerox Holdings Limited (EHL), with a Canadian based private company Garnet Commerce Limited (Garnet) and a Garnet-affiliated entity owning the remaining 50%. EHL owns a 100% interest in Enerox GmbH, a Vanadium Redox Flow Battery manufacturer providing grid scale and micro-grid energy storage solutions and based in Austria.
Soon after making the investment Garnet voiced its objections to the Company's investment in VRFB-H. In mid-July 2021 a claim form was issued in the High Court of Justice: Business and Property Courts of England and Wales (Chancery Division) by Garnet against VRFB-H and EHL seeking declarations against VRFB-H concerning alleged breaches by VRFB-H of provisions of the joint venture agreement in relation to EHL, arising from the indirect investment into EHL through VRFB-H by the Company. VRFB-H believes Garnet's claims to have no merit and is robustly defending its position. In addition, VRFB-H issued a counterclaim against Garnet and is seeking declarations against Garnet for material breaches of the joint venture agreement in respect to Garnet's conduct. The matter has been listed for trial on an expedited basis on a date to be fixed for late January 2022. It is unknown when a decision would be handed down.
Whilst the Company is not a party to the above proceeding's they have precluded the Company from issuing a prospectus, which is a precursor for the Company's shares to be reinstated to trading. If the Company's shares are not reinstated to trading by the 31 December 2021 the investment in VRFB-H will, pursuant to the agreements executed with VRFB-H and the CLN holders and described in the Company's 27 April 2021 release, be sold to Bushveld Minerals Limited and the CLNs will be redeemed. Bushveld Energy Limited, a 74% owned subsidiary of Bushveld Minerals Limited, currently owns a 50.5% interest in VRFB-H. Acacia Resources Limited, which has a 24.03% interest in the Company, owns the remaining 27.4% interest of VRFB-H.
In preparing these accounts and given the anticipated timetable of the High Court proceedings in relation to the trial, the Directors anticipate it as likely that the investment will be unwound and as such has not recognised either the investment in VRFB-H or the CLNs in these accounts.
The Company has been in active discussions with the counterparties to the transaction announced on 27 April 2021 and continues to progress the previously articulated strategy of exploring further investments in the energy storage valu
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