Australia-based precision welding technology company K-TIG Limited reported that the share purchase agreement (SPA) to acquire Graham Engineering Limited (GEL) has reached its sunset date of 31 August 2023 with a number of conditions precedent that have not yet been satisfied.
K-TIG stated in an ASX announcement that it would be exceedingly difficult to complete the deal by the sunset date due to the adverse capital market circumstances made harder by underlying macro and geopolitical factors.
Despite the above, K-TIG said it is still dedicated to concluding the SPA at this time, and subject to GEL’s objectives, it is prepared to discuss in good faith amendments to the Share Purchase Agreement to make this possible.
Either party may end the SPA if a variation cannot be reached an agreement on.
In July 2023, K-TIG Limited reiterated its announcement to acquire 100 per cent of GEL, dated 22 March 2023.
The acquisition deal has been varied by mutual agreement to reflect the following considerations, including a reduced upfront cash payment of £6,500,000 payable on completion and a cash payment of £2,500,000 which will be subject to vendor finance over a five-year period.
Another condition is a cash payment for GEL’s freehold property of £4,550,000, which will be subject to vendor finance over a two-year period.
As a result of the changes to the purchase agreement, K-TIG is obliged to release a supplementary prospectus for its public offering, which has been updated and intends to raise up to $15,000,000 (before expenses) by the issuance of up to 75,000,000 shares at a price of $0.20 per share.
K-TIG stated that it is now looking into a number of financial possibilities in order to complete the deal, hence the additional prospectus dated 21 July 2023 will be removed.
The company expects to file the necessary additional (withdrawal) prospectus with ASIC and the ASX in the near future.
Headquartered in the United Kingdom, Graham Engineering Limited delivers manufacturing solutions to a wide variety of market sectors including nuclear, aerospace, medical, and security.
The engineering, manufacturing and assembly relating to these products and solutions takes place at GEL’s premises in Lancashire, UK, conveniently located for GEL’s core clients.
