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McPhy Launches Private Placement of Approximately €8 Million and Warrant Allocation

By November 6, 2019

November 6, 2019

La Motte Fanjas (France)McPhy (Euronext Paris Compartment C: MCPHY, FR0011742329), a specialist in hydrogen production and distribution equipment, today announces the launch of a capital increase via the issuance of new ordinary shares without preferential subscription rights for certain categories of investors, of approximately €8 million, as well as a warrant allocation project for all shareholders to enable them to subsequently participate in the capital increase operation. A request to list the new shares will be made to Euronext.


Context of the Issuance

The funds will be raised from French and international qualified investors, with the notable exception of those in the United States, Canada, Australia, and Japan, in accordance with articles L.225-136 of the French Commercial Code and L.411-2 II of the French Monetary and Financial Code (the “Issuance”).

The funds raised will enable McPhy to strengthen its shareholders’ equity and finance its working capital requirements, in a context of revenue growth:

  • One-third of the funds will allow the Company to participate in covering its working capital requirements for the next 18 months;
  • One-third of the funds will be dedicated to addressing the acceleration of the activity, the market, and ongoing projects, in particular with regard to large hydrogen platforms; and
  • One-third of the funds will be dedicated to financing R&D and product development so that the Company can begin the industrialization phase of its products.

As part of the Issuance, the Ecotechnologies fund managed by Bpifrance Investissement as part of the Future Investment Program (“Programme d’Investissements d’Avenir”) and EDF Pulse Croissance, key shareholders of the Company holding respectively 7.7% and 21.2% of the capital, have pledged to subscribe to the Issuance based on their percentage holdings, i.e. a total of 28.9% of the Issuance.

McPhy is already anticipating revenue growth of around 40% in 2019 compared with 2018, i.e. 2019 revenue of at least €11 million. Moreover, as indicated in its Universal Registration Document, McPhy has received a conditional order intent and has entered into exclusive negotiations for the construction and commissioning of a 20 MW Electrolyser platform to be installed in Europe; the first phase being the engineering contract.

Terms of the Issuance

By virtue of the fifteenth resolution of the Combined Shareholders’ Meeting of May 23, 2019, the Issuance will be undertaken without preferential subscription rights. Pursuant to article L. 225-138 of the French Commercial Code, it will be reserved for one or several categories of investors as defined in the fifteenth resolution approved by the Shareholders’ Meeting of May 23, 2019, i.e.: French or foreign investment companies and investment funds (including, but not limited to, all FCPI, FCPR and FIP funds) that invest in the biotechnology and clean-technology sectors; French or foreign investment companies and investment funds (including, but not limited to, all FCPI, FCPR and FIP funds) that commonly invest in small or mid caps; French or foreign groups or companies with which the Company intends to sign or has already signed partnerships with the aim of (i) developing hydrogen production, storage and distribution solutions and (ii) industrializing such solutions; industrial companies whose activity is similar or complementary to the Company’s activity; physical persons who wish to invest in a company in order to benefit from a reduction in income tax; and companies that commonly invest in small or mid caps in order to allow their shareholders or associates to benefit from a reduction in income tax.

In accordance with the fifteenth resolution of the Combined Shareholders’ Meeting of May 23, 2019, the number of new shares to be issued as part of the Issuance may not exceed 22.7% of the current capital. The issuance price of the new shares will be at least equal to the Company’s average weighted share price on the Euronext regulated market in Paris during the three trading sessions prior to the setting of the issuance price, possibly reduced by a maximum discount of 20%.

The Issuance will be conducted via an accelerated book-building process following which the number and price of the newly-issued shares will be determined. The accelerated book-building will start immediately and is expected to end before the markets open tomorrow, subject to any early closing or extension. The Company will announce the result of the Issuance in a subsequent press release as soon as possible after the end of the book building process. The settlement-delivery of the new shares issued as part of the Issuance and their admission to trading on the Euronext regulated market in Paris are scheduled for no later than November 12, 2019. The new shares will have full dividend rights and be traded on the Euronext Paris under ISIN code FR0011742329.
Should the Issuance represent more than 20% of the current share capital, the offering for Company shares as part of the Issuance would give rise to a Prospectus requiring a visa from the AMF (French stock market authority).

The definitive terms of the Issuance will be announced by McPhy as soon as possible.

Placement agreement

The transaction will be the subject of a placement agreement to be concluded between the Lead Manager and bookrunner and the Company, covering all the shares offered. This contract will not constitute a performance guarantee within the meaning of Article L. 225-145 of the French Commercial Code. In the event of non-conclusion or termination of the placement agreement, subscription orders and the offer would be retroactively cancelled. The private placement is led by Gilbert Dupont, sole Lead Manager and bookrunner.

Lock-up commitments

As part of the Issuance, Bpifrance Investissement and EDF Pulse Croissance have signed a lock-up commitment covering all the Company shares they hold for a duration of 90 days from the settlement-delivery date, while the Company has signed an abstention commitment for a duration of 180 days from the settlement-delivery date.

Free warrant allocation

In order to allow all shareholders to participate in the planned issuance and benefit from the same subscription conditions, the Company wants to propose the free allocation of stock warrants (“BSA”) to all existing shareholders prior to the Issuance; in this respect, a right to BSA will be granted by Euronext to all shareholders of the Company on November 6, 2019. These warrants would allow their holders to subscribe to new shares at the Issuance price. One BSA would be allocated for each existing share held, and 10 BSA would allow their holder to subscribe to one new ordinary share.

Within this framework, Bpifrance Investissement and EDF Pulse Croissance have pledged to vote in favor of the Shareholders’ Meeting resolution regarding the issuance of these BSA, which will be voted on at an Extraordinary Shareholders’ Meeting which will be held on January 16, 2020. In the event of a favorable vote, a Board of Directors of the Company will meet on the same day at the end of the Extraordinary General Meeting in order to allocate the warrants to the Company’s shareholders who have benefited from this right. Bpifrance Investissement and EDF Pulse Croissance have also agreed not to exercise any BSA they may be allocated.

Should the BSA be fully exercised, the resulting issuance of new shares would represent 7.1% of the Company’s current share capital.

The BSA would not be admitted to the negotiations.

Universal Registration Document and forward-looking statements

Detailed information on the Company, in particular with regard to its business, results, outlook and corresponding risk factors, can be found in the Company’s Universal Registration Document filed with the Autorité des Marchés Financiers (the “AMF”) on November 4, 2019 under number D.19-0926 which may be consulted, as well as other regulated information relating to the Company (including its 2018 audited financial statements and its half-yearly financial statements as at 30 June 2019), all of the Company’s press releases and the investor presentation, on the Company’s website (www.mcphy.com).

Projected timeline
November 5, 2019
Press release from the Company announcing the availability of the Universal Registration Document
Press release from the Company announcing the principle of the Reserved Capital Increase

No later than November 7, 2019 before market opening
Conclusion of the placement agreement
Press release from the Company announcing the completion of the Reserved Capital Increase
Allocation of the right to the allocation of warrants

No later than November 8, 2019
Approval of the Prospectus by the AMF and press release by the Company on the terms and conditions for making it available

No later than November 12, 2019
Reception of the subscription price – Issuance of the New Shares and settlement-delivery of the New Shares
Board of Directors of the Company acknowledging the completion of the Reserved Capital Increase
Euronext notice relating to the admission of the New Shares to trading on Euronext Paris

No later than December 12, 2019
Convocation of the Extraordinary General Meeting

January 16, 2020
Extraordinary General Meeting concerning in particular the allocation of warrants
Meeting of the Board of Directors

Trading suspension
The Company informs that it has requested Euronext Paris to suspend the trading of its shares as from Tuesday, November 5 before market opening.

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