Bushveld Minerals Ltd (LON:BMN), the AIM quoted, integrated primary vanadium producer, which owns high-grade vanadium assets in South Africa, noted that redT energy plc has today received shareholder approval for its proposed merger with Avalon Battery Corporation. The merged entity will be named Invinity Energy Systems plc. Bushveld entered into a Joint Venture agreement with redT on 9 March 2020 to form a Vanadium Financing Partnership to supply vanadium electrolyte to be used in third party-owned Vanadium Redox Flow Batteries projects developed by redT. The Joint Venture agreement will be transferred to Invinity.
· The Merger will create a leading player in the growing energy storage market with a presence in North America, Europe, sub-Saharan Africa and Asia.
· Invinity is expected to have strong competitive advantages, gain financial stability and form a base for rapid future growth.
· Invinity will be able to offer a VRFB that competes effectively against other energy storage technologies.
On 1 November 2019, Bushveld announced it had agreed to support the Merger with funding of US$5 million through a convertible loan to Avalon. In accordance with the terms of the convertible loan, on successful completion of the Merger the loan will convert into shares in Invinity. The previously provided US$5 million loan (together with the accrued interest and commitment fee) has been converted into 302,978,063 Ordinary Shares at a price of 1.65 pence in Invinity, representing up to 8.71 per cent of Invinity. The shares issued to Bushveld are not subject to a lock-in arrangement.
In addition to the funding from Bushveld, Invinity has raised £7.9 million through an equity placing at 1.65 pence per share.
Under the agreement, following the completion of the Merger, Bushveld has a right to nominate a director to the Board of Invinity, subject to Bushveld retaining at least 5 per cent of the issued share capital of Invinity. The nomination of a director will be done in due course. Bushveld will retain that right after one year provided it beneficially owns at least 10 per cent of Invinity. In addition, for so long as Bushveld beneficially owns at least 20 per cent. of Invinity, it shall have a right to nominate two members of the board of Invinity.
The investment is in line with Bushveld’s strategy of partnering with VRFB companies and part of the VRFB Investment Platform (“VIP”), as announced on 1 November 2019.
Fortune Mojapelo, CEO of Bushveld Minerals Limited, commented:
“At only a few months old, our VRFB Investment Platform is already gathering momentum on the back of the investments made to date.
“Invinity starts its journey with a strong project pipeline already in place, one which it plans to grow even more in the future. Despite the global impact of the Covid-19 pandemic, the fundamental need for long duration energy storage to support the energy transition has not changed. The benefit to Bushveld of supporting this downstream vanadium-based industry is already becoming clear, and Bushveld continues to support the growth and its participation in the energy storage industry.”