Digital 9 Regulatory News (DGI9)

15 March 2024

DIGITAL 9 INFRASTRUCTURE PLC

("D9" or the "Company" and, together with its subsidiaries, the "Group")

Verne Global Sale Completion

The Board of D9 (the "Board") is pleased to announce that it has completed the sale of the Company's entire stake in the Verne Global group of companies ("Verne Global") to funds managed or advised by Ardian France SA ("Ardian") for an equity purchase price of up to US$575 million (approximately £450 million*) (the "Verne Transaction"), in line with the equity purchase price communicated by the Company in the announcement on 27 November 2023. Following the Verne Transaction's completion the Company has received US$415 million (£325.8 million) (the "Initial Purchase Price"). The completion follows receipt of all applicable regulatory approvals and the satisfaction of all conditions in line with the previously communicated timetable. 

As noted in the Company announcement on 27 November 2023, the purchase price also comprises:

i. US$25 million (approximately £19.5 million*) of a deferred consideration payment which is payable on the earlier of 15 business days after the date on which a new power agreement is entered into and 26 April 2024 (the "Deferred Consideration"), and

ii. ?A potential earn-out payment of up to US$135 million (approximately £106 million*), which is payable subject to Verne Global achieving run-rate EBITDA targets for the financial year ending December 2026 (the "Performance Target"). The total earn-out will be payable if 100% of the Performance Target is met and will be reduced on a sliding scale with no earn-out being payable if Verne Global does not achieve 80% of the Performance Target. This target is as set in the business plan provided to all potential purchasers at the time of the sale process.

The Company believes that Ardian's own value creation objectives are aligned with deploying the requisite capital expenditures to enable Verne Global to deliver in line with or close to the Performance Target. The Company has no capital expenditure obligations to Verne Global going forward. The Company also benefits from customary protections to ensure Verne Global continues operating and reporting substantially in line with existing practices, including quarterly updates on its run-rate EBITDA achievements.

As previously announced, the Verne Transaction closing will enable the Company to significantly deleverage its balance sheet and provide the cash resources necessary for the Company to strengthen its financial position.

The Initial Purchase Price proceeds received will be used as follows:

· £273.5 million will go towards repayment and partial cancellation of the Revolving Credit Facility ("RCF");

· Up to £17 million will be used to pay costs incurred in relation to the Verne Transaction;

· Around £12 million will be retained to cover future operational expenses of the Company if and when required; and

· Around £23 million will be retained for prudent capital management to cover for possible future liabilities arising from certain Value-Added Tax related indemnification provisions and will be available for additional RCF repayment and cancellation if and when an insurance policy to cover these potential future liabilities will be taken out.

Following receipt of the Deferred Consideration, an additional repayment and cancellation of the RCF of approximately £19.5 million* will be made, reducing the residual RCF to approximately £80 million.

If approved by shareholders at the upcoming General Meeting on 25 March 2024, the Company intends to use equity proceeds generated by the orderly disposal of the Company's wholly-owned assets to fully repay and cancel the residual RCF.

* GBP amounts based on a 1.28 USD/GBP exchange rate as of 13 March 2024.

ENDS.

FOR FURTHER INFORMATION ON THE COMPANY, PLEASE CONTACT:

About Digital 9 Infrastructure plc:

Digital 9 Infrastructure plc (DGI9) is an investment trust listed on the London Stock Exchange and a constituent of the FTSE All-Share, with the ticker DGI9. The Company invests in the infrastructure of the internet that underpins the world's digital economy: digital infrastructure.

The Investment Manager is Triple Point Investment Management LLP ("Triple Point") which is authorised and regulated by the Financial Conduct Authority. For more information on the Investment Manager please visit www.triplepoint.co.uk. For more information, please visit www.d9infrastructure.com.