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- SRJ Technologies Group (SRJ) will not proceed with its intended acquisition of STATS UK and has terminated the agreed share purchase agreement
- The company said market conditions since the start of this year had made raising the necessary capital “extremely challenging”
- However, SRJ and STATS will continue to collaborate at an operational level and partner in multiple regional markets including across the UK, Middle East and Asia Pacific
- To provide working capital for SRJ moving forward, the company will conduct capital raisings, with one being currently ongoing to provide interim funding for the company
- SRJ shares remain halted at 43 cents as of November 22, 2021
SRJ Technologies Group (SRJ) will not proceed with its intended acquisition of STATS UK and has terminated the agreed share purchase agreement.
The announcement comes after the company released a statement delaying capital raise and in succession, the acquisition.
The company said underlying market conditions since the start of this year had made raising the necessary capital “extremely challenging.”
However, SRJ and STATS will continue to collaborate at an operational level and partner in multiple regional markets including across the UK, Canada, USA, Middle East and Asia Pacific.
CEO Alexander Wood said that even though it was a disappointing outcome, the company will now refocus on executing its core strategy of creating a “leading global player in asset integrity for the energy sector” whilst continuing to build on the successful and collaborative relationship with STATS.
“I continue to believe in the merits of a combination of the two businesses but ultimately the transaction fell victim to the current levels of market uncertainty,” Mr Wood said.
“SRJ has many exciting organic opportunities in its pipeline and we will now focus on executing on these opportunities and building value for our shareholders.”
To provide working capital for SRJ moving forward, the company will conduct capital raisings, with one being currently ongoing to provide interim funding for the company.
It is also further proposed that the company will launch another capital raising to raise sufficient working capital to lift the suspension in the securities of SRJ and to pay costs of
approximately £610,000 (A$1.06 million) associated with engagement of advisers including legal counsel and accounting services.
This capital raising is anticipated to be concluded mid-June.
In the meantime, SRJ has signed an agreement with an existing investor for a facility for $2 million of convertible securities which has not been drawn yet.
If drawn, the value is repayable in 18 monthly instalments of A$111,111 payable in cash, shares or a combination of both.
There is a break fee of $100,000 if the facility it not drawn down within three months.
The company expects it would draw down this facility only if required and an equity
capital raise is not finalised.
SRJ shares remain suspended at 43 cents each.
