THIS ANNOUNCEMENT CONTAINS
INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET
ABUSE REGULATION (596/2014/EU) AS THE SAME HAS BEEN RETAINED IN UK
LAW AS AMENDED BY THE MARKET ABUSE (AMENDMENT) (EU EXIT)
REGULATIONS (SI 2019/310) ("UK MAR"). IN ADDITION, MARKET SOUNDINGS
(AS DEFINED IN UK MAR) WERE TAKEN IN RESPECT OF CERTAIN OF THE
MATTERS CONTAINED WITHIN THIS ANNOUNCEMENT, WITH THE RESULT THAT
CERTAIN PERSONS BECAME AWARE OF INSIDE INFORMATION (AS DEFINED
UNDER UK MAR). UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A
REGULATORY INFORMATION SERVICE, THOSE PERSONS THAT RECEIVED INSIDE
INFORMATION IN A MARKET SOUNDING ARE NO LONGER IN POSSESSION OF
SUCH INSIDE INFORMATION, WHICH IS NOW CONSIDERED TO BE IN THE
PUBLIC DOMAIN.
Distil PLC
(the "Company")
Placing and Subscription for, in
aggregate, 541,666,675 new Ordinary Shares at 0.12 pence per share
with Placing Warrants at 0.36 pence per share; Related Party
Transactions; Notice of General Meeting; Change of
Broker
High proportion of fundraising committed
from two leading investors: Grain GmbH, and Dr Graham
Cooley
Transaction
Highlights:
·
Placing and Subscription to raise £0.65 million (before
expenses) through the issue of 541,666,675 new Ordinary Shares at
the Issue Price
·
Grain GmbH, which is connected to Roland Grain, a
non-executive director of the Company, has agreed to invest
£200,000 for 166,666,600 new Ordinary Shares in the
Subscription
· Dr
Graham Cooley is investing £90,000 for 75,000,000 new Ordinary
Shares via the Placing
·
First Tranche of fundraising of £0.108 million allotted from
existing authorities
·
Second Tranche of fundraising of £0.542 million subject to
approval at General Meeting
·
Appointment of Allenby Capital as broker to the
Company
Distil plc (AIM:DIS), owner of premium drinks
brands RedLeg Spiced Rum, Blackwoods Gin and Vodka, TRØVE Botanical
Vodka and Blavod Black Vodka, is pleased to announce it has
conditionally raised £0.65 million (before expenses) through a
Placing and Subscription (together, the "Fundraising").
The Fundraising will provide working capital,
including to fund production and promotion for the important
Christmas season, production of promotional Limited Edition stock;
development of brand range extensions; major account listings for
On & Off Trade; and Ready to serve developments.
The Company has conditionally placed
through its new joint broker, Allenby Capital Limited,
358,333,475 new ordinary
shares of 0.1p each ("Ordinary Shares") in the capital of the
Company (the "Placing Shares") at a price of 0.12p per Placing
Share (the "Issue Price") to raise £0.43 million, before expenses
(the "Placing").
The Company also announces a
conditional subscription of 183,333,200 new Ordinary Shares (the
"Subscription Shares", and together with Placing Shares, the
"Fundraising Shares") at the Issue Price with existing shareholders
to raise £220,000, before expenses (the "Subscription").
Participation in the Subscription by
Grain GmbH and Don Goulding (Executive Chairman) are related party
transactions under the AIM Rules. The Independent Director,
having consulted with SPARK Advisory Partners, the Company's
nominated adviser, considers that the terms of the Subscription by
Grain GmbH and Mr Goulding are fair and reasonable insofar as
Shareholders are concerned.
The Fundraising Shares will represent
approximately 37.28 per cent. of the Enlarged Share Capital
following Second Admission.
The Issue Price represents a discount of
approximately 40 per cent. to the Closing Price of 0.20 pence per
Ordinary Share on 20 September 2024, being the last practical date
prior to the date of this announcement.
Don Goulding,
Executive Chairman of the Company, commented:
"I am pleased to announce a successful round of
fundraising and thank our shareholders for the continued support
shown to the business.
This funding will support working capital and
brand activation over the key trading period October through
December and enable us to compete as we seek to expand distribution
in 2025.
Fee
Shares
In addition to the Fundraising
Shares, 6,250,000 new Ordinary Shares are to be issued at the Issue
Price, conditional upon Second Admission, to an adviser in
settlement of amounts owed by the Company.
Change of
Broker
The Company announces the appointment of
Allenby Capital Limited as broker, with immediate
effect.
Notice of
General Meeting
A General Meeting to approve the resolutions
(the "Resolutions") required to implement the Fundraising is to be
held at Temple Chambers, 3-7 Temple Avenue, London EC4Y 0DT at
10.00 a.m. on 9 October 2024. A detailed timetable of events is set
out at the bottom of this announcement.
Copies of a Circular convening a General
Meeting for 10.00 a.m. on 9 October 2024 will be sent to
shareholders later today and will shortly be available on the
website of the Company at http://www.distil.uk.com/investors.
Extracts from the Circular are set out
below.
For further information:
|
Distil
PLC
|
|
|
Don Goulding, Executive Chairman
|
Tel: +44 203 283 4006
|
|
SPARK Advisory
Partners Limited
(NOMAD)
|
|
|
Neil Baldwin
Mark Brady
|
Tel: +44 203 368 3550
|
|
Allenby Capital
Ltd
(Broker)
|
|
|
James Reeve/Piers Shimwell
Jos Pinnington/Guy McDougall
|
Tel: +44 (0)20 3328 5656
|
Extracts from the
Circular:
"Letter from the Chairman of
Distil
1. Introduction
The Company announced on 23 September 2024 that it
had conditionally raised £650,000, before expenses, by way of a
placing of 358,333,475 Placing Shares and subscription for
183,333,200 Subscription Shares, all at a price of 0.12 pence per
New Ordinary Share. The fundraising
comprises:
· a firm
placing of 90,511,381 First Tranche Placing Shares to raise
£108,614 (before expenses) to be
issued pursuant to the Company's existing authorities to issue and
allot equity securities on a non-pre-emptive
basis: and
· a
conditional placing of 267,822,094 Second Tranche Placing Shares to raise £321,387 (before
expenses) and a conditional subscription for 183,333,200
Subscription Shares to raise £220,000, which are subject to
Shareholders' approval at the General Meeting.
The Issue Price represents a
discount of approximately 40 per cent. to the Closing Price of 0.20
pence per Ordinary Share on 20 September 2024, being the last
practical date prior to the date of the Announcement.
Placing Warrants over 1,095,833,350 shares will
also be issued to, inter
alia, participants in the Placing and the
Subscription.
The Placing Shares and Subscription
Shares will represent approximately 37.28 per cent. of the
Company's Enlarged Share Capital. The First Tranche Placing Shares
have been placed conditional on First Admission (which is expected
to become effective, with dealings in the First Tranche Placing
Shares to commence, on or around 26 September 2024). The Second
Tranche Placing Shares have been placed, and the Subscription
Shares have been subscribed for, conditional, inter alia, on the passing of the
Resolutions being proposed at the General Meeting and upon Second
Admission (which is expected to become effective, with dealings in
the Second Tranche Placing Shares and Subscription Shares to
commence, on or around 11 October 2024). Neither the Placing nor the
Subscription have been underwritten.
For the Second Tranche Placing and
the Subscription to proceed, the Company requires Shareholders'
approval to authorise the Directors to allot the Second Tranche
Placing Shares, the Subscription Shares and the Fee Shares, to
issue the Placing Warrants and to disapply statutory preemption
rights in relation to the issue of the Second Tranche Placing
Shares, the Subscription Shares, the Fee Shares and the Placing
Warrants.
I am therefore writing to provide
you with details of the Proposals, and to give you notice of the
General Meeting at which the resolutions to authorise the Directors
to allot and issue, and disapply the statutory pre-emption
provisions in respect of ,inter
alia, the Second Tranche Placing Shares, the Subscription
Shares, the Fee Shares and the Placing Warrants will be put to
Shareholders. The General Meeting is to be held at 10.00 a.m. on 9
October 2024 and the formal notice of the General Meeting is set
out at the end of this document.
2. Background to and reasons for
the fundraising
On 14 August 2024 the Company issued
a trading update in which the Board advised that:
"The business had anticipated lower sales in the first four
months of the year due to phasing trends, however the results
achieved sit below expectations. In light of this, we have revised
our expectations for the full year which, despite the disappointing
performance year to date, still anticipate revenue growth versus
2023.
The global alcohol market has been facing persistent
challenges in recent years, with global drinks industry data
service, IWSR, recording a decline in global beverage alcohol
volumes in 2023 for the first time in 30 years, with difficulties
continuing into 2024.
The decline has been driven by an extraordinarily challenging
economic environment, as consumers are faced with ongoing
inflationary pressures which are putting a strain on spending.
While this is an issue affecting all global markets, for 2024, this
has been exacerbated in the UK by the poor weather, leading to
further curbs on socialising both in and out of
home.
The effects of these changes to consumer spending have been
felt throughout the drinks industry, across all arms and at all
levels, including our business.
Q1
and July trading was considerably softer than expected and has
required the business to pivot in order to drive volumes across our
brands through increased consumer facing activity. This has
included an increase in promotional activity to drive awareness and
trial, as well as to secure key on-trade listings, the benefits of
which we expect to begin to see once the market shows signs of
recovery.
This backdrop has created an immediate short-term funding need
within the business and the Board is currently exploring funding
options to address this need."
Having consulted with major
shareholders and brokers the Company has been able to agree to
raise £650,000 by way of an issue of new Ordinary Shares in the
Company. The Company has obtained the support of major shareholders
Roland Grain (via Grain GmbH) and Dr Graham Cooley, who have each
agreed to subscribe in the Placing or Subscription.
3. Details of the
Placing
The Placing has conditionally raised
approximately £430,000 (before expenses) for the Company by the
issue of the Placing Shares at the Issue Price with
investors.
The
Placing
The Placing is being conducted in
two tranches because the Company currently has limited shareholder
authority to issue new Ordinary Shares for cash on a
non-pre-emptive basis. Details of the two tranches of the Placing
are set out below.
First Tranche
Placing
The conditional placing of the First
Tranche Placing Shares at the Issue Price has raised
£108,614 (before expenses) for the Company,
within the Company's existing share allotment authorities which
were granted at the Company's annual general meeting held on 9 July
2024.
The First Tranche Placing is
conditional, inter alia,
upon:
(a)
the Placing Agreement not having been terminated
in accordance with its terms; and
(b)
admission of the First Tranche Placing Shares to
trading on AIM becoming effective by no later than 8.00 a.m. on 26
September 2024 (or such later time and/or date as the Company,
SPARK and Allenby Capital may agree (being no later than 8.00 a.m.
on 10 October 2024)).
Second Tranche
Placing
The conditional placing of the
Second Tranche Placing Shares at the Issue Price has raised
£321,387 (before expenses).
The Second Tranche Placing is
conditional, inter alia,
upon:
(a)
the passing of the
Resolutions at the General Meeting;
(b)
the Placing Agreement not having been terminated
in accordance with its terms;
(c)
completion of the Subscription; and
(d)
admission of the Second Tranche Placing Shares,
the Subscription Shares and the Fee Shares to trading on AIM
becoming effective by no later than 8.00 a.m. on 11 October 2024
(or such later time and/or date as the Company, SPARK and Allenby
Capital may agree (being no later than 8.00 a.m. on 25 October
2024)).
The Placing is not being
underwritten.
The Placing will result in the issue
of 358,333,475 New Ordinary Shares representing approximately 24.66
per cent. of the Enlarged Share Capital. The Placing Shares, when
issued and fully paid, will rank pari passu in all respects with the
Existing Ordinary Shares on Second Admission.
4. Details of the
Subscription
The Subscription has raised £220,000
for the Company by the conditional issue of a total of 183,333,200
New Ordinary Shares at the Issue Price to (1) Grain GmbH and (2)
Don Goulding as set out in section 10 below.
The Subscription is conditional
upon, inter
alia:
·
the Resolutions being duly passed at the General
Meeting by 9 October 2024, or such later time and/or date as the
Company, Allenby Capital and SPARK may agree in the event of an
adjournment of the General Meeting, but in any event by no later
than 8.00 a.m. on 23 October 2024; and
·
Second Admission becoming effective on or before
8.00 a.m. on 11 October 2024 or such later time and/or date as the
Company, Allenby Capital and SPARK may agree, but in any event by
no later than 8.00 a.m. on 25 October 2024.
The Subscription will result in the
issue of 183,333,200 New Ordinary Shares representing approximately
12.62 per cent. of the Enlarged Share Capital. The Subscription
Shares, when issued and fully paid, will rank pari passu in all respects with the
Existing Ordinary Shares on Second Admission.
5. Fee Shares
6,250,000 New Ordinary Shares are to
be issued at the Issue Price, conditional upon the Resolutions
being duly passed at the General Meeting and Second Admission, to
an adviser in settlement of amounts owed by the Company. The Fee
Shares, when issued, will rank pari passu in all respects with the
Existing Ordinary Shares on Second Admission and will represent
approximately 0.43 per cent. of the Enlarged Share
Capital.
6. Placing
Warrants
Placees and subscribers in the
Placing and Subscription will be issued with Placing Warrants (each
Placing Warrant giving the right to subscribe for one Ordinary
Share) on the basis of two Placing Warrants for every 1 new
Ordinary Share subscribed in the Placing or Subscription. The
Placing Warrants will be exercisable at a price of 0.36 pence per
Ordinary Share at any time up to two years following the date of
Second Admission. Placing Warrants are also being issued to the
recipient of the Fee Shares (see above). In aggregate,
1,095,833,350 Placing Warrants will be issued which, if exercised
in full, would result in proceeds of £3.945 million.
The
Placing Warrants will be unlisted, and no application will be made
to admit the Placing Warrants to trading on any stock
exchange.
7. Settlement and
dealings
Application has been made to the
London Stock Exchange for the Placing Shares, the Subscription
Shares and the Fee Shares to be admitted to trading on
AIM.
The First Tranche Placing Shares
have been allotted conditional upon First Admission and it is
expected that they will be admitted to trading on AIM at 8.00 a.m.
on 26 September 2024 (or such later time and/or date as the
Company, SPARK and Allenby Capital may agree (being no later than
8.00 a.m. on 10 October 2024)).
Following the passing of the
Resolutions at the General Meeting, the Second Tranche Placing
Shares, Subscription Shares and Fee Shares will be allotted
conditional upon Second Admission. It is expected that the Second
Tranche Placing Shares, Subscription Shares and Fee Shares will be
admitted to trading on AIM at 8.00 a.m. on 11 October 2024 (or such
later time and/or date as the Company, SPARK and Allenby Capital
may agree (being no later than 8.00 a.m. on 25 October
2024)).
8. Placing
Agreement
The Company, SPARK and Allenby
Capital have entered into the Placing Agreement, pursuant to which
Allenby Capital has agreed, subject to certain conditions, to use
its reasonable endeavours to procure placees for the Placing
Shares.
The Placing Agreement is
conditional, inter alia,
upon First Admission becoming effective at 8.00 a.m. on 26
September 2024 (or such later time and/or date as the Company,
SPARK and Allenby Capital may agree (being no later than 8.00 a.m.
on 10 October 2024)) and Second Admission becoming effective at
8.00 a.m. on 11 October 2024 (or such later time and/or date as the
Company, SPARK and Allenby Capital may agree (being no later than
8.00 a.m. on 25 October 2024)).
The Company has agreed to pay all
costs and expenses relating to the Placing and the applications for
Admission, including a fee and commission payable to Allenby
Capital, and a corporate finance advisory fee to SPARK.
The Placing Agreement contains
certain customary warranties given by the Company in favour of
SPARK and Allenby Capital in relation to, inter alia, the accuracy of the
information in this document and the Announcement and other matters
relating to the Group and its business. In addition, the Company
has agreed to indemnify SPARK and Allenby Capital in respect of
certain liabilities they may incur in respect of the Placing or
Admission. It also contains provisions entitling SPARK and Allenby
Capital to terminate the Placing Agreement if, inter alia, a breach of any of the
warranties occurs, a force majeure event occurs or an event occurs
which is material in the context of the Placing.
9. Use of
Proceeds
The gross proceeds amount to
£650,000. The expenses of the Proposals amount to approximately
£74,600, of which approximately £67,100 will be settled in cash,
and £7,500 will be satisfied by the issue of the Fee Shares on the
same terms as the Placing and Subscription. The net proceeds
of the Placing and the Subscription will be applied by the
Company as follows:
● Working
capital (including production, promotional and Limited
Edition
& Christmas Stock
production
£354,900
● Promotional Limited
Edition for Xmas
Season
£88,000
● Brand range
extensions
£55,000
● On & Off
Trade - major account listings
£50,000
● Ready to serve
developments
£35,000
Unencumbered cash reserves stood at
£15,000 as at 31 August 2024 and so the net proceeds of the
fundraising will provide Distil with sufficient liquidity as the
Company enters the build up to crucial Christmas season and its
busiest trading period of the year.
10. Related Party
Transactions
Roland Grain is a non-executive
Director of the Company and is currently interested (via Grain
GmbH) in 213,619,107 Existing Ordinary Shares (representing 23.60
per cent. of the Company's current issued share capital). As a
Director and as a substantial shareholder in the Company, Roland
Grain is a related party under the AIM Rules.
Don Goulding is Executive Chairman
of the Company, and as such is a related party under the AIM
Rules.
The participation of Grain GmbH and
Don Goulding in the Subscription are related party transactions
under AIM Rule 13 of the AIM Rules.
Neither Mr Grain nor Mr Goulding are
considered independent in relation to the consideration of these
related party transactions under AIM Rule 13. Therefore, Shaun
Claydon, being the Independent Director, has considered the
participation of the related parties in the Subscription in line
with the AIM Rules.
Grain GmbH's and Don
Goulding's participation in the Subscription
|
Name
|
Holding of Existing Ordinary
Shares
|
Amount subscribed for in the
Subscription
|
Number of Subscription
Shares†
|
Number of Ordinary Shares
held post Second Admission
|
% of Ordinary Share capital
held post Second Admission
|
|
Grain GmbH*
|
213,619,107
|
£200,000
|
166,666,600
|
380,285,707
|
26.17%
|
|
Don Goulding
|
10,000,000
|
£20,000
|
16,666,600
|
26,666,600
|
1.84%
|
* Grain GmbH is a company
to which Mr Roland Grain is connected.
† in
addition two Placing Warrants will be issued for every one
Subscription Share subscribed .
The terms of the Subscription are
essentially the same as the terms of the Placing.
The Independent Director has
considered the participation of Grain GmbH and Mr Goulding in the
Subscription. Having consulted with SPARK Advisory Partners, the
Company's nominated adviser, the Independent Director considers
that the terms of Grain GmbH's and Mr Goulding's participation in
the Subscription are fair and reasonable insofar as Shareholders
are concerned.
11. General
Meeting
The Directors do not currently have
sufficient existing authorities to allot shares and dis-apply
pre-emption rights under section 551 and section 570 of the Act to
enable the Company to allot and issue the Second Tranche Placing
Shares, the Subscription Shares, the Fee Shares and the Placing
Warrants. Consequently, the Company needs to first obtain approval
from its Shareholders to grant to the Board additional authority to
allot the New Ordinary Shares and to dis-apply statutory
pre-emption rights which would otherwise apply to such allotment or
grant. The Company is also seeking Shareholder authority to
increase the Directors' general authority to allot securities and
dis-apply pre-emption rights pursuant to sections 551 and 570 of
the Act, respectively.
A summary and brief explanation of
the resolutions to be proposed at the General Meeting is set out
below. Please note that this is not the full text of the
Resolutions and you should read this section in conjunction with
the Resolutions contained in the Notice at the end of this
document. The following resolutions will be proposed at the General
Meeting:
Resolution 1,
which will be proposed as an ordinary resolution,
is to authorise the Directors to allot or issue the Second Tranche
Placing Shares, the Subscription Shares, the Fee Shares, the
Placing Warrants and further new Ordinary Shares (representing
approximately 33 per cent. of the Enlarged Share Capital) up to an
aggregate nominal value of £479,500; and
Resolution 2,
which will be proposed as a special resolution,
and which is subject to the passing of Resolution 1, dis-applies
statutory pre-emption rights, provided that such authority shall be
limited to the Second Tranche Placing Shares, the Subscription
Shares, the Fee Shares, the Placing Warrants and further Ordinary
Shares (representing approximately 20 per cent. of the Enlarged
Share Capital) having an aggregate nominal value of
£290,606.
The General Meeting will be held at
10.00 a.m. on 9 October 2024 at Temple Chambers, 3-7 Temple Avenue,
London EC4Y 0DT.
12. Irrevocable
Undertaking
Grain GmbH (213,619,107 Ordinary
Shares) has irrevocably undertaken to vote its Ordinary
Shares (which amount to 23.60% of the issued share capital) in
favour of the Resolutions at the General Meeting.
13. Action to be taken by
Shareholders
A form of proxy for use at the
General Meeting is enclosed. Whether or not you intend to attend
the General Meeting in person, you are requested to complete and
sign the form of proxy and return it to the Company's Registrars at
3 The Millennium Centre, Crosby Way, Farnham, GU9 7XX, so as to
arrive no later than 10.00 a.m. on 7 October 2024. The return of
the form of proxy will not prevent you from attending the General
Meeting and voting in person should you wish to do so.
14. Importance of the
vote
The
First Tranche Placing is not conditional on the Second Tranche
Placing nor the Subscription. Should the Resolutions not be passed
at the General Meeting, the Second Tranche Placing and the
Subscription will not proceed. The First Tranche Placing will not
be affected by any or all of the Second Tranche Placing and the
Subscription failing to complete for any reason.
In
order for Second Admission to proceed, Shareholders will need to
approve both Resolutions set out in the Notice of General
Meeting.
If
either of the Resolutions to be proposed at the General Meeting are
not approved by Shareholders, the Second Tranche Placing Shares and
the Subscription Shares will not be able to be allotted and the
Placing Warrants will not be able to be issued and consequently the
Company will receive significantly less money than anticipated from
the Placing and Subscription. In such circumstances, unless
the Company was able to raise potentially more expensive and/or
dilutive funds from alternative sources in the immediate short
term, the Company will have to adapt its business plans, strategy
and cost base accordingly and it is highly likely that the
Company's performance, financial position and prospects will be
adversely affected. Accordingly, the Directors consider that it is
very important that Shareholders vote in favour of the Resolutions
in order that Second Admission can proceed.
15. Board
Recommendations
In
relation to the Resolutions, as Mr Grain (via Grain GmbH) and Mr
Goulding have participated in the Subscription, they are not
considered independent and as such have not participated in the
recommendation.
The
Independent Director considers that the Placing, the Subscription,
the issue of the Fee Shares and Placing Warrants and the
Resolutions are in the best interests of the Company and its
Shareholders as a whole.
Accordingly, the Independent Director recommends that you vote
in favour of the Resolutions.
Yours sincerely
Don
Goulding
Chairman
EXPECTED TIMETABLE OF
PRINCIPAL EVENTS