REG - Tirupati Graphite - Response to Campaign by Requisition Group

Tirupati GraphiteAnnouncement

05/06/2024 07:00

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RNS Number : 1175R  Tirupati Graphite PLC  05 June 2024

The information communicated within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulations (EU) No.
596/2014, which is part of UK law by virtue of the European Union (Withdrawal)
Act 2018. Upon the publication of this announcement, this information is
considered to be in the public domain.

 

5 June 2024

Tirupati Graphite plc

('Tirupati', 'TG' or the 'Company')

 

Response to Campaign by Requisition Group

 

Tirupati Graphite plc (TGR.L), the specialist flake graphite company and
supplier of the critical mineral for the global energy transition, provides
the following information in response to an ongoing campaign by a group of
underlying shareholders holding, in aggregate, c. 5.8% of the issued ordinary
share capital of the Company (the 'Requisitioners') who have obliged the
Company to convene a general meeting which is scheduled for 11 June, 2024.

 

The Requisitioners appear to have the support of the proposed Directors,
Optiva Securities Limited, TG's corporate broker up until 15 May 2024, and Mr.
Hemant Kumar Poddar (the "Requisitioning Group").

 

The Requisitioning Group has made a number of accusations against the Company
both in its Requisition Letter and in a subsequent social media campaign, all
of which the Company refutes.

 

In response to these allegations, the Company, further to its official RNS
Response dated 13 May 2024, is disclosing the following clarification
including around Director nominations, appointments, and resignations. The
Company further notes the connections between the proposed directors and their
motivations with reference to their history with the Company.

 

Mark Rollins, Murat Erden, Leo Koot, and Isabel de Salis (the Requisitioners
proposed directors)

·    Mr. Mark Rollins was referred to the Company by Optiva Securities
Limited as a potential NED candidate in July 2022. Following due diligence and
consideration of Mr. Rollins' track record as a public company director, Mr
Rollins' candidacy was unsuccessful. However, he continued, with Optiva's
support, to pursue this role until early 2023.

o  In June 2023, Mr Rollins, claiming to represent a "Tirupati Graphite
Shareholder Action Group", of which he declined to provide any details, wrote
to the Company to demand changes to the Board.

o  Since Mr Rollins first contacted the Board with his demands, he has
continued to send various letters to the Board and an online social media
campaign against the Company surfaced in August 2023 - as was threatened in
one of these communications.

·    Optiva Securities also referred Mr. Murat Erden as a potential
Executive Director responsible for Finance.

o  Mr. Erden was instead appointed as an NED as his expectation on
remuneration and warrants in respect of an executive role far exceeded the
Company's pay structures, especially at a time when the Company had limited
working capital availability.

o  Mr Erden's progression to a formal executive role was therefore made
subject to his securing financing. Mr Erden brought only a single offer from a
lender of last resort which in the opinion of the current directors would have
placed significantly onerous terms on the Company.

o  In addition to an annual fixed return of greater than 50% to the lender,
the terms sought to securitise all of the Company's assets in Madagascar,
built at an investment of more than £17 million, against a loan of less than
£1 million, which was insufficient to meet the Company's working capital
needs.

o  The Company could not accept these terms and the resulting disagreement
led to the resignation of Mr Erden and Ms de Salis.

·    Mr. Leo Koot has held and currently holds Board positions in various
companies alongside Mr. Rollins.

 

Hemant Kumar Poddar

·    Mr. Hemant Poddar, who served on the Board from the Company's
founding until 5 February 2024, has launched a parallel campaign against the
Company's Executive Chairman. The Company notes that:

o  Mr. Hemant controls Tirupati Carbons & Chemicals Private Limited
('TCCPL') and, as such, was a part of "the shareholder group" under the 2020
"Supplementary Relationship Agreement" between the Company, Optiva Securities
Limited and the Founders; the shareholder group being constituted of the
concert party identified by the takeover panel, their immediate family and
entities under their control.

·    TCCPL was a flake graphite business and was contracted to provide
plant machinery and equipment to TG, at TG's choice.

o  In 2022, after TCCPL was understood to have sought to acquire and develop
competing flake graphite projects in Tanzania, TG opted to cease procurement
of propriety plant machinery and equipment from TCCPL, doing so instead from
another entity of the shareholders' group not controlled by Mr Hemant.

o  TG also developed relationships with Indian flake graphite intermediaries
and reprocessors other than TCCPL, and secured more attractive terms and
regular orders by doing so.

o  It is important to note that the intermediary / reprocessors served market
segment is an important part of the flake graphite global market and the
Company has business with such entities in the USA, Europe, and other Asian
countries.

o  Given the apparent conflict of interest, the Company questions whether Mr.
Hemant Poddar's actions have been and continue to be in the best interests of
the Company.

 

Critical relationships with Pranagraf and Haritmay

The Company reiterates that its relationships with Pranagraf Materials &
Technologies Private Limited ("Pranagraf") and Haritmay Ventures LLP
("Haritmay") are complementary and have been of material importance and
benefit to the Company as they have:

·    Supported TG in direct sales to large users in India and in the
intermediary and reprocessors served market, despite TCCPL competing with TG's
products in the Indian market by procuring from cheaper sources in Vietnam,
China, Mozambique, and Madagascar. The Company has to date sold to twelve
customers in India of which five are intermediaries and/or reprocessors.

·    Supported the Company to build two projects simultaneously at speed
and lowest quartile cost structure by providing proprietary plant and
machinery, and other inputs at competitive costs.

·    Supported the protection of critical IP, that the Company has access
to, and is not available to the Company's competitors.

·    Supported the Company to manage its costs with extensive back-office
support and provision of training at costs that would otherwise likely be far
higher.

 

Notwithstanding the above, the Company intends to undertake a review of
related party arrangements after the appointment of the Non-Executive
Chairman.

 

The Board reiterates its recommendation to VOTE AGAINST ALL RESOLUTIONS under
consideration at the requisitioned general meeting.

·    As previously announced, the Board is actively working to address the
composition of the board and financial constraints, starting with and evident
from the proposed appointment of Mr. Michael Lynch-Bell as independent,
Non-Executive Chairman.

·    The Board believes that the resolutions proposed at the requisitioned
general meeting are materially detrimental to the future of the Company.

·    The Board's significant experience, detailed knowledge and insights
into the global graphite market are critical for the growth of TG and for
generating value for shareholders.

 

 

ENDS

 

For further information, please visit https://www.tirupatigraphite.co.uk/
(https://www.tirupatigraphite.co.uk/)  or contact:

 

 Tirupati Graphite Plc                          

 Puruvi Poddar - Joint Managing Director       admin@tirupatigraphite.co.uk

                                               +44 (0) 20 39849894
 CMC Markets UK Plc (Joint Broker)

 Douglas Crippen                               +44 (0)20 3003 8632
 FTI Consulting (Financial PR)                 +44 (0) 20 3727 1000

 Ben Brewerton / Nick Hennis / Lucy Wigney     tirupati@fticonsulting.com

 

About Tirupati Graphite

 

Tirupati Graphite Plc is a specialist Graphite producer and a supplier of the
critical mineral for a decarbonised economy and the energy transition. The
Company places a special emphasis on green applications including renewable
energy, e-mobility, energy storage and thermal management, and is committed to
ensuring its operations are sustainable.

 

The Company's operations include primary mining and processing in Madagascar
where the Company operates two key projects, Sahamamy and Vatomina with a
combined 30,000 tpa of currently installed capacity, producing high-quality
flake graphite concentrate with up to 97% purity and selling to customers
globally.

 

The Company also holds two advanced stage, world class, natural graphite
projects in Mozambique. Work has already commenced to optimise the economics
for development of the Montepuez graphite project, which is permitted for
100,000tpa production and where substantial construction work has already been
undertaken by the predecessor. A table of the Company's projects is provided
below:

 

 Country       Project           Stage
 Madagascar    Sahamamy          In production: 18,000tpa capacity
 Madagascar    Vatomina          In production: 12,000tpa capacity
 Mozambique    Montepuez         100,000tpa permitted, development-initiated
 Mozambique    Balama Central    58,000tpa permitted, development-ready

 

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