Agreement reached regarding Alternative RTO Structure – Notice of Shareholders Meeting to be held 23rd March

Further to the announcement of 1 March concerning the lapse of the offer by the Challenger in respect of the acquisition of the shares of Cindrigo Limited, has agreement between Challenger and Cindrigo been reached in respect of an alternative proposal which is for Challenger to acquire Cindrigo Energy Limited (“CEL”) whilst it remains the 100% parent of Cindrigo Limited (the “Acquisition”). The Acquisition will proceed pursuant to a new Plan of Arrangement under the British Columbia Business Corporations Act. (the “Plan”).

CEL has today issued Notice of General Meeting to its shareholders in respect of a shareholder’s meeting to obtain the approval of the Plan set out in paragraph 1 below. Challenger expect shortly to issue Notice of General Meeting to its shareholders in respect of a shareholder’s meetings to obtain the approval set out in paragraphs 4 below.

The terms of the Acquisition and the Plan of Arrangement are set out in an agreement made between Challenger and CEL on 5 March 2021 (the “Arrangement Agreement”). The Arrangement Agreement is conditional upon :-

  1. The approval of the Plan by a special majority of the shareholders of CEL (“Cindrigo Shareholders”).
  2. The approval of the Plan by the Supreme Court of British Columbia.
  3. The UK Panel on Takeovers and Mergers having confirmed:
    1. the extent and identity of any Cindrigo Shareholders considered by them to be acting in concert; and
    2. that:
      1.  the issuance of Convertible Loan Notes as proposed in the Plan will be effective to prevent a requirement for a mandatory offer by any Cindrigo Shareholder(s) pursuant to Rule 9 of the UK City Code on Takeovers and Mergers (“Rule 9”) arising as a result of the Acquisition and the issue of Challenger Shares to the Cindrigo Shareholders; or
      2. the successful implementation of other proposals put forward by the Company, with the consent of the Panel, in order to obtain a dispensation in respect of any requirement to make an offer pursuant to Rule 9.
  4. The approval of the shareholders of Challenger of resolutions to (i) authorise the directors of Challenger to allot the required consideration shares to complete the Acquisition and (ii) change the name Challenger to Cindrigo Holdings Limited on completion of the Acquisition.

As a result of the proposed exchange the current shareholders of CEL would hold some 96.5% of the enlarged issued share capital of Challenger. It is anticipated that in due course the shares of Cindrigo Limited will be distributed to Challenger following completion of the Acquisition and CEL will then be liquidated.

Challenger intends to make an application for its enlarged ordinary share capital to be readmitted to the standard segment of the Official List of the FCA and to trading on the Main Market of the London Stock Exchange and, for that purpose, has in contemplation of the Acquisition becoming unconditional a draft Prospectus been filed with the Financial Conduct Authority (FCA) for approval.

Mustaq Patel, Cindrigo CEO, said, “Both Cindrigo and Challenger remain committed to the acquisition of the business of Cindrigo Limited by Challenger and we will work together to implement the terms of the Arrangement Agreement as soon as practicable and thereafter to achieve the readmission of the Companies enlarged share capital to trading on the Main Market of the London Stock Exchange”.

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