Energy storage specialist Leclanché has signed an agreement with Yorkville Advisors Global, a US New Jersey-based investment firm offering debt and equity financing to global, small and micro-cap companies, for an unsecured US dollars convertible loan facility with a maximum ceiling of USD40 million (approximately CHF39 million). The initial proceeds will be used for Company operations and expansion.
The terms of the agreement with Yorkville Advisors allows it to convert each loan note into Leclanché shares based on the prevailing Investor’s Spot Rate of Exchange at the time of conversion and divided by the prevailing share price at time of conversion.
The agreement calls for the drawdowns of the facility within a two-year period. The first tranche of the loan facility is CHF 2.9 million which has already been expended. Additional drawdowns are expected to be in the amount of CHF 1.4 million or an amount determined by both Leclanché and Yorkville Advisors. Any such additional drawdowns by the Company are conditional upon, amongst other, prior loans having been converted into shares and the shares having been traded out by Yorkville Advisors at its sole discretion as well as certain share price and trading volume thresholds being met prior to any additional request for drawdown.
Loans drawn down do not carry interest, but trigger certain fees and the allocation of certain warrants to Yorkville Advisors with an initial exercise price of 120 per cent of the closing price on the day prior to the date on which a loan is made. Accordingly, the warrants provide a means of compensation in a scenario in which the share price increases considerably.
Anil Srivastava, CEO of Leclanché, says: “We are pleased to partner with Yorkville Advisors in this innovative financing arrangement that achieves several key objectives and supports the Company’s previously announced growth plan. Not only are we securing important short-term financing to fund current operations and growth activities, but we are also taking on a financial partner with tremendous expertise in helping to build liquidity for companies’ listed shares. Our agreement provides built-in incentives for all parties to benefit handsomely from this transaction.“
David Gonzalez, Partner and General Counsel for Yorkville Advisors, said: “We are delighted to team-up with Leclanché to help it address its financing needs. What Leclanché has accomplished as a world leader in energy storage is impressive. We believe in the company’s going-forward business strategy and we recognise its tremendous long-term growth potential. At the same time, we understand very well the financial issues that growth companies like Leclanché face as a small cap company with challenging liquidity issues. We believe that the convertible loan facility that we have arranged for the company will enable both parties to achieve their intended ROIs.”
FEFAM, Leclanché’s majority shareholder, has agreed to provide Leclanché with a CHF 25 million working capital financing convertible facility with a fixed draw down schedule. This additional financing from a long-time supportive shareholder of Leclanché brings the total growth funding raised in 2020 to up to approximately CHF64 million.
Srivastava says: “This additional funding now in place will support the implementation of our high-growth business plan and, together with the other financing projects the Company is working on, will help finance the tripling of our manufacturing cell production capacity in Germany to three million cells per annum to support delivery of the large order book we have in Leclanché‘s eTransport Business. We expect to share more details of the business plan and funding in the coming weeks.“
