Path Investments plc (LON:PATH), has provided an update following the Company’s announcements on 13 August and 31 December 2021 that the Company had entered into a conditional sale and purchase agreement to acquire the entire issued share capital of DG Innovate Ltd.
Long Stop Date Extension
As previously announced, the Proposed Transaction is subject, inter alia, to the approval of Path’s independent shareholders and waiver of Rule 9 of the Takeover Code by the Takeover Panel, together with the publication of a prospectus and the application by the Company to have its enlarged share capital listed on the Standard Segment of the Official List and admitted to trading on the Main Market of the London Stock Exchange. Path and its advisers are making very good progress with the Proposed Transaction, including on the process of seeking approval of the FCA for the prospectus, and in order to allow time to conclude matters, including convening the required General Meeting of Path shareholders, it has now been agreed with DG Innovate to extend the long stop date for the satisfaction of all conditions to 31 March 2022.
Increased Secured Loan Facility
As part of the Proposed Transaction, as previously announced on 13 August and 22 September 2021, Path has provided a secured loan to DG Innovate of £600,000. In view of the extended long stop date, it has been agreed with DG Innovate to increase the secured loan facility by up to a further £450,000. £150,000 of the Increased Facility has been provided to DG Innovate today and it may draw down a further £150,000 one calendar month from today’s date and a further £150,000 two calendar months from today’s date (subject to the posting of the Company’s prospectus to shareholders by 28 February 2022).
Amendment to the Terms of the Proposed Transaction
As announced on 13 August 2021, Path has entered into the Agreement to acquire DG Innovate for £32 million to be satisfied by the issue of 5,342,051,305 Path Ordinary Shares of £0.001 each at an issue price of 0.6 pence per Path Share. The Agreement has now been amended to provide for further conditional deferred consideration of £5.373 million to be satisfied by the issue of 895,610,844 Path Shares on the first anniversary of completion should DG Innovate sign at least two multi-year supply agreements for the provision of their motor technology with certain defined customers prior to this date.
Further announcements will be made by Path Investments in due course, as appropriate. In the meantime, Path’s shares will remain suspended from trading on the London Stock Exchange.