Pennpetro Energy has entered into Heads of Agreement with Indigenous Canadian Energy Holdings Inc. ('ICENERGY') in relation to the proposed acquisition by Pennpetro of the entire issued share capital of ICENERGY. The Heads of Agreement are non-binding, save for certain provisions described below.
The Proposed Transaction follows the Company’s previous announcement on 15 September 2026 confirming ICENERGY as its reverse takeover target and that the Heads of Agreement would be finalised after the Company’s annual general meeting on 30 September 2026.
ICENERGY is a Canadian transition energy business focused on the steam-enhanced treatment of lignocellulosic fibre. As previously announced, its business includes the proposed conversion of low-quality waste wood fibre into high-value pelletised biofuel for use as a replacement for coal in residential and industrial heat and power generation markets, initially in the European Union, starting with Poland, where first deliveries are scheduled for December 2026.
Proposed Transaction
Under the Heads of Agreement, Pennpetro would acquire the entire issued share capital of ICENERGY from its shareholders. The consideration would be satisfied wholly through the allotment and issue of new ordinary shares in Pennpetro to ICENERGY’s shareholders. No cash consideration would be payable.
ICENERGY’s shareholders would own not less than 90 per cent. of Pennpetro’s issued share capital immediately following completion, before the proposed placing described below and on the basis that Pennpetro has no material assets or liabilities at completion. The percentage remains subject to the agreed treatment of Pennpetro’s existing obligations and outstanding options, warrants, convertible securities and other equity interests, and to the definitive transaction documentation.
As previously announced, the Proposed Transaction is expected to constitute a reverse takeover for the purposes of the UK Listing Rules. On completion, the Company’s existing listing in the Equity Shares (Transition) Category would be cancelled and a fresh application made for the enlarged group’s ordinary shares to be admitted to the Equity Shares (Commercial Companies) Category of the Official List and to trading on the Main Market of the London Stock Exchange.
The proposed Acquisition will be subject to the provisions of the Takeover Code, including, where applicable, obtaining a waiver from the Panel on Takeovers and Mergers of any obligation to make a mandatory offer under Rule 9 of the Takeover Code, together with any necessary approval of independent shareholders.
Proposed Placing
In connection with the Proposed Transaction, Pennpetro, with the cooperation of ICENERGY, has agreed to use reasonable endeavours to raise £20 million before expenses through a placing of new ordinary shares, conditional upon re-admission. No placing commitments have yet been obtained.
Under the Heads of Agreement, the placing shares would represent a maximum of 20 per cent. of the enlarged issued share capital immediately following completion of the Proposed Transaction and the placing, based on a pre-money valuation of the enlarged group of at least £80 million.
The net proceeds are expected to be applied towards ICENERGY’s retail business, including the construction of a wholly owned retail production plant (current supply comes from a contracted third-party facility), retail sales and marketing in Europe, working capital and the costs associated with the Proposed Transaction and placing.
Completion of the Proposed Transaction will be conditional upon the placing raising not less than £20 million before expenses. ICENERGY will also have the right to terminate the Heads of Agreement if firm written indications of interest for at least £15 million have not been obtained by 31 January 2027.
Board of the Enlarged Group
The board of the enlarged group would be constituted so as to comply with the UK Corporate Governance Code 2024 to the extent applicable, including through the appointment of independent non-executive directors.
Related-party considerations
Directors Richard Spinks and Grand Chief Ronald Derrickson are both directors and shareholders in ICENERGY.
Accordingly, the Proposed Transaction will be a related party transaction for the purposes of the Disclosure Guidance and Transparency Rules.
The Proposed Transaction will also require the approval of Pennpetro’s shareholders under section 190 of the Companies Act 2006.
In order to support the independent directors assessment of the Proposed Transaction, the Heads of Agreement provide for an independent valuation of ICENERGY to be obtained from an appropriately qualified independent valuer.
Source: Pennpetro Energy
