Scottish battery company Amte Power got a financial reprieve and said it agreed a £1 million ($1.3 million) loan facility with institutional investor Arena Investors. This buys it time to complete a £2.5 million ($1.94 million) initial equity investment with a potential new investor.
Arena said it provides “creative solutions” for those seeking capital in special situations, often providing capital where others will not. Amte was on the verge of entering into administration, as previously reported.
First half of the loan will be available for drawdown within two business days. The loan is repayable at 110% either when the equity investment is completed or within three months of the loan.
Arena has agreed to relinquish the conversion rights attaching to its pre-existing convertible bond, announced on 17 October 2022, of which £4.0 million ($5.2 million) has been drawn down to date, with £3.75 million outstanding.
A repayment agreement will be entered into. In consideration, the pair will agree the granting to Arena of warrants to subscribe for 2% of the share capital of Amte (as enlarged by the recapitalisation plan) at a 100% premium to the issue price.
The new investor has proposed to subscribe £2.5 million, subject to conditions, resulting in an 80% holding in the company. Amte said if completed, that would provide it with sufficient financial resources to the end of September 2023.
The investor would implement a “financial solution” for the company, including providing for future funding requirements. It would also have the sole discretion to allow the investment in the company to be extended to other investors. Terms have yet to be agreed and remain uncertain, said Amte. They are subject to regulatory and shareholder approval.
Alan Hollis, CEO of Amte Power, which makes lithium-ion and sodium-ion batteries, said: “I am very pleased to announce the bridging loan to be provided by Arena, which buys Amte Power the time and financial resources to allow the equity investor to complete its due diligence and internal procedures ahead of some much needed further investment in the business.”