Zuuse Investment and Greatland Gold Update
Primorus Investments plc
("Primorus" or the "Company")
Zuuse Investment and Greatland Gold PLC Holdings Update
Primorus Investments plc (AIM: PRIM, NEX: PRIM) is pleased to announce that it has made an investment in Zuuse Limited ("Zuuse") by way of A$2.0 million (approximately £1.1 million) participation in a placement of primary stock as part of a proposed circa A$40 million (approximately £22.2 million) investment round ("Transaction"). The Company is subscribing for 2,000,000 shares at A$1 per share in primary stock but is seeking to take a portion of this in secondary stock at a slightly lower price should it become available. This may result in a slightly lower overall investment cost to the Company.
Zuuse is a Melbourne-based construction payments software company with operations in the UK, US and Australia. This investment has been made in conjunction with other shareholders to support a major strategic transaction that is intended to be announced in the coming weeks.
Prior to the Transaction, Primorus held 57,205 fully paid shares in Zuuse and 1,000,000 options exercisable any time at A$0.50 per share. The Company earned these shares and options as the return on its 2018 investment in an A$500,000 convertible loan note that was fully repaid by Zuuse in 2019 as announced by the Company on 25 September 2019.
If the full proposed A$40m investment round proceeds, Primorus will hold 2,057,205 fully paid shares in Zuuse and 1,000,000 options exercisable at A$0.50, representing circa 1.7% per cent. of Zuuse's fully diluted enlarged share capital.
To part fund its participation in the Transaction, the Company has sold 6,000,000 Greatland Gold PLC ("Greatland") shares at an average realised price of £0.148 per share through a structured series of sales in the weeks leading up to the Transaction.
Primorus retains 20,000,000 shares in Greatland with a mark-to-market value of approximately £4 million at the date of this announcement.
Background to Zuuse
Zuuse is an international software provider in the construction payments and contracts management space. Under its Payapps brands in the UK and Australia and the GCPay brand in the US, Zuuse platforms currently process over US$2 billion per month in payment invoices worldwide. The value of global payment invoices processed grew by 52% in 2019 to A$18.5 billion of approved payments from A$12.2 billion in 2018.
Zuuse's core business enjoys Annual Run Rate ("ARR") revenues of approximately A$17.5 million and is EBITDA and cashflow positive.
The main purpose of the fundraise in which Primorus and others are participating is to accelerate its ProgressPay early invoice global payment platform via the provision of a balance sheet against which the product can trade. It will also allow for the acquisition of a complementary business in Australia.
Upon closing of the Transaction (expected in the next few weeks), the Company will provide a more detailed summary of the investment and parties involved. As previous guidance when investing in the Zuuse Loan Notes in 2018, Alastair Clayton is a long term shareholder in Zuuse and post Transaction would have a shareholding of circa 1.4% of the fully diluted enlarged issued capital of Zuuse.
Jeremy Taylor-Firth, Non-Executive Chairman commented:
"Shareholders will recall Primorus has invested in Zuuse before, via a Convertible Loan Note which was fully repaid in 2019 and returned some zero cost fully paid shares and 1,000,000 options exercisable at A$0.50 per share to our balance sheet. Having observed the very impressive and robust financial performance of Zuuse during the COVID-19 global shock, we have taken this opportunity to take a direct share investment as part of a larger fundraising, the details and participants to which can be revealed upon financial close in a few weeks' time.
As part of the Transaction and also as part of our commitment to realising some profits, we have sold 6,000,000 Greatland Gold shares over recent weeks. Thus far, we have recovered our entire original investment in Greatland, approximately £625,000, grossed a further circa £1,200,000 in cash and retain 20,000,000 shares (54% of our original stake of 37,000,000 shares) at a zero net cost with a mark to market value of about £4 million. This is by any measure an outstanding result."
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
Forward Looking Statements
This announcement contains forward-looking statements relating to expected or anticipated future events and anticipated results that are forward-looking in nature and, as a result, are subject to certain risks and uncertainties, such as general economic, market and business conditions, competition for qualified staff, the regulatory process and actions, technical issues, new legislation, uncertainties resulting from potential delays or changes in plans, uncertainties resulting from working in a new political jurisdiction, uncertainties regarding the results of exploration, uncertainties regarding the timing and granting of prospecting rights, uncertainties regarding the Company's ability to execute and implement future plans, and the occurrence of unexpected events. Actual results achieved may vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors.
For further information, please contact:
Primorus Investments plc:
+44 (0) 20 7440 0640
+44 (0) 20 7213 0880
Cairn Financial Advisers LLP
James Caithie / Sandy Jamieson
+44 (0) 20 3657 0050
Turner Pope Investments (TPI)
Zoe Alexander / Andy Thacker