Total Graphite Plc — Proposed Acquisition and £0.41m CLN Fundraise

Total Graphite moves to acquire a cash-generative graphite business with major equity funding.

What the company is saying

Total Graphite Plc has signed heads of terms to acquire 100% of TZC, a cash-generative graphite reprocessing business. The announcement highlights TZC’s operational 12,000 tpa plant, another 12,000 tpa plant under construction, and over 2,000 MT supplied since May 2026. The company emphasizes the acquisition’s structure: £1.88 million upfront via 188 million shares at 1p, and deferred consideration up to £4,698,750 via up to 313,250,000 shares at 1.5p, capped annually at the lower of 50% of TZC cashflows or £1.5 million. TZC is described as debt-free, with a US$1 million working capital facility. Total Graphite concurrently raised £0.41 million through convertible loan notes at 1p, with half-warrants at 1.5p, a 2-year term, and interest at 12% or 15%. The company frames the deal as aligning future payments with cash generation and supporting ongoing operations. The transaction is subject to due diligence and shareholder approval, with a general meeting targeted for December 2026.

What the data suggests

The disclosed figures show TZC operates a 12,000 tpa plant, has another 12,000 tpa plant under construction, and has supplied over 2,000 MT since May 2026. The acquisition involves £1.88 million upfront, paid in 188 million shares at 1p, and up to £4,698,750 deferred, payable in up to 313,250,000 shares at 1.5p, with an annual cap of the lower of 50% of TZC cashflows or £1.5 million. TZC is debt-free and has a US$1 million working capital facility, which reduces immediate financial risk. The concurrent £0.41 million CLN raise is convertible at 1p per share, includes half-warrants at 1.5p, carries a 2-year term, and pays 12% or 15% interest. The deal structure ties deferred consideration to actual cashflows, but no historical or projected revenue, EBITDA, or profit figures are disclosed. The only operational metric is the >2,000 MT supplied since May 2026, which lacks context for profitability or growth. All transaction benefits remain contingent on due diligence and shareholder approval.

Analysis

The announcement is generally positive in tone, highlighting the signing of heads of terms for a 100% acquisition of a cash-generative graphite reprocessing business and a concurrent fundraising. The majority of claims are realised and supported by specific figures (plant capacity, supplied tonnage, consideration structure, and fundraising terms). However, the transaction is still subject to due diligence and shareholder approval, with the next milestone (general meeting) targeted for December 2026, making the execution distance near-term but not immediate. The capital outlay is significant, involving both upfront and deferred equity-based consideration, but the benefits (integration, future cashflows) are not yet realised. No profitability metrics (EBITDA, net income, cashflow magnitude) are disclosed for either company, so the sustainability and value of the acquisition cannot be fully assessed. The language is proportionate, but the absence of financial performance data and the conditional nature of the deal introduce moderate hype relative to the evidence.

Risk flags

• ●The acquisition is subject to due diligence and shareholder approval, so there is no certainty the transaction will complete; failure at either stage would nullify the proposed benefits.
• ●No historical or projected financial performance data for TZC is disclosed, making it impossible to assess the true cash-generative nature or profitability of the business; this opacity increases the risk that future operating cashflows may not support the deferred consideration.
• ●The deferred consideration structure, capped at the lower of 50% of TZC cashflows or £1.5 million annually, means that if cashflows underperform, sellers may not receive the full amount, and Total Graphite may not achieve anticipated scale or returns.
• ●The second 12,000 tpa plant is still under construction, introducing execution risk around completion timing, cost overruns, or operational ramp-up; no timeline or budget for completion is provided.
• ●The £0.41 million CLN raise carries high interest rates (12%/15%), which could pressure cashflows if the business does not quickly become self-funding post-acquisition.

Bottom line

Total Graphite Plc is making a significant move to acquire 100% of TZC, a graphite reprocessing business with existing and expanding capacity, using a mix of upfront and deferred equity-based consideration. The deal structure aligns future payments with actual cash generation, but the absence of historical or projected financials for TZC leaves the true value and sustainability of the acquisition unproven. The concurrent £0.41 million CLN raise provides short-term funding but comes with high interest costs. All benefits are conditional on due diligence and shareholder approval, with the next catalyst being the December 2026 general meeting. Investors should focus on whether due diligence reveals robust cashflows and whether the second plant is completed on time and within budget. The key takeaway is that while the transaction could be transformative, its value hinges entirely on future execution and currently undisclosed financial performance.

Announcement summary

(LSE:TGR) Total Graphite Plc has signed heads of terms to acquire 100% of a cash-generative Tanzanian graphite reprocessing business referred to as TZC. The TZC business currently operates a 12,000 tpa plant and has a further 12,000 tpa plant under construction. Since May 2026, TZC has supplied more than 2,000 MT of product. The upfront consideration for the acquisition is £1.88 million, to be settled by the issuance of 188 million shares at 1p per share. Deferred consideration of up to £4,698,750 is payable via up to 313,250,000 shares at 1.5p per share, contingent on future operating cashflows. The annual cap on deferred consideration is the lower of 50% of TZC cashflows and £1.5 million. TZC is described as debt-free and has a US$1 million working capital facility. The acquisition is subject to due diligence and shareholder approval, with a general meeting targeted for December 2026. Concurrently, Total Graphite raised £0.41 million via convertible loan notes (CLNs) convertible at 1p per share. The CLNs include half-warrants exercisable at 1.5p, have a 2-year life, and carry interest at 12% or 15%. The transaction structure includes both upfront and deferred equity-based consideration. The deal is designed to align future payments with the cash generation of the acquired business. The CLN fundraising provides additional capital to support the transaction and ongoing operations. The company has set clear terms for conversion and warrant exercise prices. The interest rates on the CLNs are specified at 12% and 15%. The acquisition and fundraising are both subject to customary approvals and conditions.

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