For over a year, we have been writing in Business Insider about Niewiadow's plans, mainly regarding ammunition production. On Friday, January 16, information came that indicates the sources of financing for one of the branches of weapons production, specifically 40 mm ammunition.
According to data from the European Defense Agency and the report of the NATO Industrial Advisory Group, the European 40 mm ammunition market already exceeds the value of EUR 2 billion per year, with growing demand from the armies of NATO countries and industrial partners in the Central and Eastern European region.
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The Management Board of Niewiadów Polska Grupa Military announced that on January 16 it concluded an investment agreement with Forum 119 Fundusz Inwestycyjny Zamkyjny – an entity from the Fidera Group, Proguns Group, Zakłady Sprzętu Precyzyjnego Niewiadów sp. z o. o. and Fabryka Amunicji Pocisk. The agreement sets out key assumptions planned investment worth PLN 60 millionaimed at financing the launch of a factory in Poland producing medium-caliber 40 mm ammunition. Ammunition production will be carried out by the Pocisk Ammunition Factory.
The information resulted in an increase in the price of Niewiadow's shares on NewConnect by almost 14%. up to PLN 14.88.
The implementation of the investment will enable the Issuer's Capital Group to create an integrated segment production of medium caliber ammunition within the structures of a holding company covering design, licensed production and sale of ammunition and components. “This is another step in the implementation of the strategy that assumes the development of national competences in the field of defense technologies and the construction of a private arms industry holding company,” we read in the press release.
Details of the Niewiadowa project
The project will be implemented based on cooperation with ST Engineering Advanced Material Engineering Pte. Ltd. based in Singapore. Pursuant to the provisions of the agreement, the investor, the Fidera Group, acquired 4.5 million Proguns shares in exchange for a cash contribution of PLN 20 millioni.e. PLN 4.43 for each individual new share. After registering the above increase, Niewiadów will hold Proguns shares representing 57.61%. share capital, and Fidera Group – Proguns shares representing 20 percent. share capital.
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Later, Proguns will take over for PLN 19 million shares of the Pocisk Ammunition Factoryobtaining 49 percent. share, and the Fidera Group will provide financing for the project in the amount of PLN 40 million, including participation bonds giving the right to 20 to 50 percent. FAP profit.
After the transaction, Zakłady Sprzętu Precyzyjnego Niewiadów will have over 51%. capital of the Pocisk Ammunition Factory, and Proguns almost 49 percent. From Niewiady PGM's point of view, this means an effective share of 79%. in investment.
As the financing is completed, the Fidera Group will obtain the right to acquire 2.2 million series D Proguns subscription warrants, entitling it to acquire series H Proguns bearer shares in exchange for an issue price of PLN 1 for each share. “ZSP will take steps to transfer to FAP all rights and obligations arising from the contract with ST Engineering Advanced Material Engineering Pte. Ltd. based in Singapore and the ownership rights to the real estate where the production of 40 mm ammunition will be launched,” the release said.
