EQS Group-Ad-hoc: Leclanché SA / Key word(s): AGMEGM/AGMEGM
Leclanché SA: Invitation to the upcoming Extraordinary General Meeting of
Shareholders to be held on 11th December 2018 in Yverdon-les-Bains
19-Nov-2018 / 07:00 CET/CEST
Release of an ad hoc announcement pursuant to Art. 53 KR
The issuer is solely responsible for the content of this announcement.
*Leclanché announces: *
*- Invitation to the upcoming Extraordinary General Meeting of Shareholders
to be held on 11th December 2018 in Yverdon-les-Bains ;*
*- Current Chairman of the Board will step down at the Extraordinary General
Meeting and recommends new Chairman.*
Yverdon-les-Bains, Switzerland, 19th of November 2018: Leclanché SA (SIX
Swiss Exchange: LECN), the fully vertically integrated battery energy
storage solution provider:
- publishes today the invitation to an Extraordinary General Meeting of
shareholders, which will take place on 11th December 2018 at 10:00 a.m.
(doors open at 9.30 a.m.), at Y-PARC, Rue Galilée 7, CH-1400
Yverdon-les-Bains.
- announces that Mr. Jim Atack, Chairman of the Board of Directors of
Leclanché will step down at the end of the Extraordinary General Meeting
(EGM) on 11th December 2018. It is proposed by the Board that Mr. David
Anthony Ishag is elected as new Chairman of the Board.
Mr. Jim Atack has been Chairman of the Board of Leclanché since August 2013
and, over this time, has overseen a strategic shift of the Company that has
established Leclanché as the only listed pure play energy storage company in
the world with a leading position in high growth markets including
stationary and etransport solutions.
*Mr. Jim Atack, Chairman of the Board of Directors said:* _"After more than
five years as Leclanché's Chairman and member of the Board, I have decided
that now is the right time to step down. Leclanché has an exceptional
leadership team with vision and strong commercial and technological acumen
and I look forward to the continued strengthening of its position as a world
leading provider of energy storage solutions." _
Leclanché thanks Jim for his leadership over the years as Chairman and
proposes to elect Mr. David Anthony Ishag as new Chairman of the Board of
Directors at the end of the EGM.
Mr. Ishag, British, is CEO of Golden Partner SA, advisor to FEFAM1, the main
Leclanché shareholder. With 30 years spent in the Finance, Tech, Mobile and
Online Marketing Industries Mr. Ishag's previous experience includes:
Employment, Partnership or Directorship with Institutions such as Barclays
de Zoete Wedd London, Republic National Bank of New York, Union Bancaire
Privée Geneva, Wharton Asset Management Bermuda (USD 15 Billion Investment
Manager) as Vice Chairman and Chief Investment Officer. Mr. Ishag was
previously Board Director, Member of the compensation and Audit Committee of
publicly traded US Electricar representing the largest European shareholders
alongside Itochu Corporation, Citibank and Hyundai. Mr. Ishag's Mobile and
Online Marketing achievements include: Founder CEO & Chairman of award
winning Pogo Technology: Europe's first cloud based mobile platform. Founder
and Executive Chairman of Espotting Media, Europe's largest
performance-based advertising network pioneering pay per click sold in 2004
for USD 170 Million. Mr. Ishag joined the Leclanché board in 2016 and has
played a key role as a Board Director in the financing of Leclanché's growth
plan and support of its redefined strategy.
I. Agenda
1. Financial Restructuring of the Company
2. Election to the Board of Directors
II. Documentation
III. Participation and voting rights
IV. Representation
V. Language
I. Agenda
Introduction by the Chairman of the Board of Directors.
1. Financial Restructuring of the Company
1.1 Overview of Financial Restructuring and Proposed Measures
Since the Company is in a negative equity situation, it must be financially
restructured. The Board of Directors has evaluated different options and
developed a financial restructuring proposal to improve the financial
situation of the Company as well as to provide more flexibility for
financing and raising capital by the Company in the future. This proposal
comprises (i) a conversion of existing debt in the amount of CHF
54'691'996.50 into equity through an ordinary capital increase; and (ii) an
amendment of the Company's articles of association in relation to the
authorized share capital (article 3quater) and conditional share capital
(article 3ter and 3quinquies ) for financing purposes (together, the
"Restructuring Plan").
The Board of Directors is of the view that given the Company status, these
measures are
- Necessary to cure the negative equity, to stabilize the balance sheet and
to improve the ability of the Company to raise capital and funding from
investors; and
- Necessary to reduce the risk of involuntary liquidation of the Company
(e.g. through a bankruptcy or otherwise).
The Board of Directors notes that these measures will immediately address
the Company's balance sheet issue and will not directly provide additional
funding or capital which is required to support the Company's growth plan.
The proposals are summarized as follows:
(i) Proposed Debt-to-Equity Conversion
To fund the Company's operations and investments, several financing
agreements have been entered into with the Finexis Equity Fund SCA ("FEF")
and certain of its sub-funds and affiliated companies (together, "FEFAM") in
the past years (the "Financing Agreements"). According to the Financing
Agreements, most of which are convertible loans or contain conversion
features, the Company is currently indebted to FEFAM with an aggregate
amount of approx. CHF 80 million (the "FEFAM Debt").
In recent years, the Company has also implemented different financing and
financial restructuring measures to improve its financial status and
liquidity situation. However, the Company is still over-indebted in the
sense of article 725 para. 2 of the Swiss Code of Obligations ("CO") in an
amount of approx. CHF 27 million (status as of September 30, 2018, based on
unaudited management accounts). Given the Company's negative equity
situation, FEF granted the Company subordinations (_Rangrücktritte;
subordinations de prêts_) on certain claims under certain Financing
Agreements, most recently a subordination of certain claims under the
Funding Agreement (as defined below), and committed to subordinate certain
claims under the Funding Agreement up to an aggregate amount of CHF
40'500'000 in February 2018. Since this subordination, the Company has
incurred further losses and, is thus still faced with an over-indebtedness
(_Überschuldung; surendettement_) as of the date hereof and must be
financially restructured.
In order to address the Company's over-indebtedness issues and to move the
Company's balance sheet into a positive equity position as at 31 December
2018, the Board of Directors has agreed in principle with FEFAM to convert a
large portion of the FEFAM-Debt in an aggregate amount of CHF 54'691'996.50
into 36'461'331 registered shares of the Company with a par value of CHF
1.50 each, subject to fulfilment of the requirements pursuant to Swiss law
and approval by the shareholders' meeting of the Company (the
"Debt-to-Equity-Conversion"). In order to implement the
Debt-to-Equity-Conversion through an ordinary capital increase, the
pre-emptive rights of shareholders will have to be excluded, which requires
shareholders' approval with a qualified majority.
Following the agreement in principle between the Company and FEFAM and in
view of the envisaged Debt-to-Equity-Conversion which would result in a
FEFAM shareholding of approx. 64.3%, FEFAM has filed an application with the
Swiss Takeover Board ("STOB") for exemption from the requirement to make a
public takeover offer upon FEFAM exceeding a 49% holding of voting rights
and shares in the Company. At the time of the preparation of this
invitation, the STOB had not yet approved the exemption. However, FEFAM and
the Company are optimistic that the STOB will approve the exemption in due
course. If so, the approval of the exemption will be made by an order of the
STOB, which will become effective at the end of the five-trading day appeal
period. Should the STOB not approve the exemption or should the respective
order of the STOB not become effective prior to the shareholders' meeting,
the Board of Directors will have to postpone or cancel the vote on the
capital increase required for the Debt-to-Equity-Conversion.
The following legal entities belonging to FEFAM are parties to the Financing
Agreements and shall be part of the proposed Debt-to-Equity-Conversion (the
"Creditors"), and they have committed to convert the below amounts into
equity:
- Finexis Equity Fund SCA - E-Money Strategies Sub-Fund (also called Energy
Storage Invest), Luxembourg ("FEF-EM") / claims of CHF 22'999'999.50 under
to a funding agreement with the Company dated 15 February 2018 (the "Funding
Agreement");
- Finexis Equity Fund SCA - Renewable Energy Sub-Fund, Luxembourg ("FEF-RE")
/ claims of CHF 12'999'999.00 under the Funding Agreement;
- FEF-RE / claims of CHF 7'599'999.00 under a certain financing agreement
with the Company dated 10 August 2018, granting FEF a right of first refusal
(but no obligation) with respect to the provision of funds required for M&A
and joint venture projects and performance bonds of the Company of up to CHF
50 million (the arrangement of 16 March 2018, as amended on 10 August 2018
the "FEFAM ROFO Agreement");
- AM Investment SCA SICAV FIS - Liquid Assets Sub-Fund ("AM") / claims of
CHF 3'499'999.50 against the Company under an existing convertible loan
agreement, as amended from time to time, which funding (Facility D1) was
granted on 27 September 2017 (the "FEFAM Convertible Loan Agreement
(Facility D1)");
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