(Boursier.com) — DeltaDrone announces the signature, on May 24, of a global agreement for the reorganization of the Delta Drone group with a group of investors led by Mr. Diede Van Den Ouden, who indicated that he directly and indirectly holds through his holding company Kennie Capital BV a total number of 147,608 company shares representing approximately 26.39% of the capital and voting rights.
The agreement, whose signature was authorized on May 22 by the Board of Directors of Delta Drone, has the following 4 main components:
1) the acquisition by Delta Drone of Tonner Drones, a company specializing in the design and manufacture of drones for military use;
2) a governance overhaul to put in place a new management team and administrators;
3) the restructuring of the existing debt in order to put an end to the current financing set up with YA II PN, LTD (YA), structured in the form of bonds redeemable in cash and/or in new shares (ORNANs) at a variable price linked share price, and to replace it with an issue of bonds convertible into shares (OCA) at a fixed price of 2.50 euros;
4) the establishment by the group of investors of a financing of 1.5 million euros for the benefit of Delta Drone (in particular allowing the reimbursement of variable price ORNANs held by YA) as well as a advance in current account for a total amount of 1 ME in order to give Delta Drone additional means to continue to implement its reorganization plan and develop its new strategy.
Once the global transaction has been completed, Delta Drone will no longer have a variable price financing agreement with YA or any ORNANs outstanding under this agreement.
In order to allow the finalization of this operation, YA has made a commitment not to sell shares of the company at a price lower than 2.50 euros from this day until the closing date of the operation, and no later than June 21, 2023.
Acquisition of Toner Drones
The agreement provides for the acquisition by Delta Drone of 100% of the share capital of Tonner Drones from its founders, Messrs. Jean-François Ott and Brad Taylor, and their respective holding companies no later than the Closing date.
The activity of Tonner Drones, a company specializing in the design and manufacture of drones for military use, will complement the historic activities of the Delta Drone group, specializing in the design and manufacture of solutions in the sector of drones for civilian use, including included in the civil security sector.
The acquisition price of 100% of the capital of Tonner Drones is set at 2 ME and is accompanied by an additional price mechanism (‘earn ou’t) providing for the payment of an additional 1.5 ME after 1 year subject to the achievement of a positive EBIT and an additional 1.5 ME after 2 years, subject to an EBIT exceeding 250 kE.
The selling shareholders of Tonner Drones will grant a seller’s credit to Delta Drone relating to the Acquisition Price and, where applicable, the Price Supplements, which will have a maturity of 3 years. Payment of the Vendor Credit by Delta Drone will be guaranteed by a securities account pledge relating to the Tonner Drones shares thus acquired by the company.
A claim of 500,000 euros held by the sellers under the Vendor Credit will be transferred to a new management trust to be set up by Delta Drone (Trust B).
The balance of the debt held under the Vendor Credit may be used by the sellers, if necessary, to subscribe to one or more future Delta Drone fundraisers by compensation of debts
On the due date of the Vendor Credit, if the Vendor Credit has not been fully repaid by the Delta Drone, the vendors will have the possibility of demanding the repayment of the balance of the Vendor Credit in cash or in shares of the company at a price per share corresponding to 80% of the volume-weighted average price of the company’s share observed on the maturity date of the Vendor Credit.
In addition, Delta Drone will issue for the benefit of the sellers 1,000,000 stock warrants (BSAT) at closing, 1,000,000 BSAT in the event of payment of the 1st Price Supplement and 1,000,000 BSAT in the event of payment of the 2nd Price Supplement. These BSATs will be allocated free of charge and may be exercised for a period of 5 years following the closing date. They will give the right to subscribe to one new share of the company at the price of 5 euros.
Change of governance
As previously announced by Delta Drone, Christian Viguié, the company’s current Chairman and Chief Executive Officer, has decided to resign, at the next Annual General Meeting, from his duties as Chief Executive Officer. In addition, the mandates of 3 of the 4 directors expire at the next Annual General Meeting, namely the mandates of Mrs. Nicole Anschutz, Mr. Jacques Rivoal and Mr. Christian Viguié. The implementation of a succession plan and a new governance of Delta Drone is therefore made necessary.
In this context, a team supported by the investor and mainly from the management of Tonner Drones would take over from the current team.
The Board of Directors would be composed of 3 members instead of 4 and would welcome MM. Jean-Francois Ott, Brad Taylor and Olivier Chouraqui. Jean-François Ott would be appointed by the newly composed Board of Directors as the new Chairman and Chief Executive Officer.
In addition, Loïc Poirier, director whose term of office was not due to expire, announced his decision to resign from his duties as director at the end of the Annual General Meeting given the reorganization of the composition of the Board of directors from that date.
Debt restructuring
Under the terms of the agreement, it is planned to end the financing in ORNANs at a variable price concluded with YA, to replace it with financing in the form of OCAs, convertible into new shares of the company at a fixed price of 2. 50 euros.
As part of the Agreement, the group of investors has undertaken to subscribe, no later than the Closing, to a total number of 30,000 simple bonds (OS) to be issued by Delta Drone, with a nominal value of 56 euros each, representing a loan for a principal amount of 1.68 ME, for a unit price of 50 euros per SO, representing a total subscription price of 1.5 ME.
This issue of OS will allow the company to, in particular, clean up its capital structure by reimbursing the variable price ORNANs held by YA and to pursue its cost reduction plan and its strategy to return to equilibrium, as well as to have access to additional potential financial resources to strengthen its development and seize any opportunity for external growth. It is part of the implementation of a so-called OS equitization mechanism.
In addition, the investor has undertaken to put in place a line of financing, which can be used by the company at its discretion as from the implementation of the new governance, within the framework of a framework agreement for an advance in current account for a maximum amount of 1 ME. All or part of the current account advance claim may also, at the discretion of the investor, be contributed to Fiducie B.
The quotation remains suspended
Delta Drone has asked Euronext to suspend the listing of its shares as of today and until the date of the ‘closing’ which should in principle take place at the end of the next Annual General Meeting convened, on the 1st call, on June 5.
“The suspension of listing is intended to allow discussions to be held on the lifting of the conditions precedent while avoiding any risk of leaks and significant variation, upwards or downwards, in the share price”, explains Delta Drone.