It is ‘business as usual’ for redT following the announcement on 25 July it had agreed to a proposed merger with fellow vanadium redox flow battery company Avalon Battery Corporation.
The UK and US (respectively) companies have signed a non-binding memorandum of understanding for the merger. If approved by shareholders the deal will constitute a reverse takeover* under London Stock Exchange rules.
In a statement, redT’s board expressed confidence that, subject to definitive agreements being reached with Avalon and a successful fundraising, the merged business would be in a robust financial position and therefore able to implement a development and growth strategy.
RedT’s Neil O’Brien, executive chairman said: “Our projects across the world in the UK, Australia and Africa will continue as normal. This merger is very much a looking forward, rather than backward looking move.”
“We have been saying since November we were looking for strategic investment and this is a step forward in that process.”
“It’s an MoU at this point, so isn’t a done deal yet but it’s a first step on our journey,” O’Brien said. “The two companies complement each other; Avalon is active in North America, China and Asia, which are regions we are not in at the moment, reversely we are active in regions they are not. So this expands both of our global reaches and allows us to pool knowledge and take advantage of that.”
“We aim to create the biggest flow machine company in the world, with complementary companies merging together to become a global leader in this space.”
“At this stage, we’ve signed the MoU which forms the basis of the terms for the proposed merger, but from an operational and commercial point of view it’s business as usual,” O’Brien added.
Last October redT began moves to find strategic partners to support and finance its continued growth.
Then on 14 March this year, the company declared it was in active discussions with a number of interested parties after launching a strategic review of its ongoing business alongside an emergency fund-raising drive.
The drive coincided with the redundancy of a quarter of its staff and changes at board level, with chairman Jeff Kenna standing down and Scott McGregor also withdrawing, but remaining at the company to handle day-to-day operations.
*Reverse takeover definition by London Stock Exchange:
A transaction, whether effected by way of a direct acquisition by the issuer or a subsidiary undertaking, an acquisition by a new holding company of the issuer or otherwise, of a business, a company or assets:
- where any percentage ratio is 100% or more; or
- which in substance results in a fundamental change in the business or in a change in board or voting control of the issuer and its subsidiary undertakings.