Savannah Energy Enters Relationship Agreement as NIPCO Increases Stake to 25%

NIPCO ups its stake as Savannah pivots to a Relationship Agreement

Savannah Energy has torn up its off-market share buyback and instead cleared the way for its largest shareholder, NIPCO Plc, to lift its stake to around 25% immediately, with the potential to reach roughly 26.5%. To balance that extra influence, Savannah plans to enter a formal Relationship Agreement with NIPCO, setting out ground rules that protect minority investors and keep the company operationally independent.

Alongside this, CEO Andrew Knott is set to buy the balance of shares that were previously earmarked for the buyback, taking his holding to about 13.8% of the company. The board says this path preserves approximately £10.05 million of cash, while keeping the option open for on-market buybacks.

What Savannah actually announced

• Termination of the off-market share buyback agreement announced on 22 October 2025 and approved on 28 November 2025.
• NIPCO to acquire 118,083,927 of the 143,565,582 shares that had been subject to the buyback, lifting its stake to approximately 25% of the current issued share capital.
• NIPCO has also indicated interest in acquiring up to a further approximately 1.5% via additional secondary market purchases. If done in full, that would take its stake to around 26.5%. There is no certainty these further acquisitions will occur.
• CEO Andrew Knott proposes to acquire the remaining 25,481,655 shares from the buyback pool, taking his total holding to 292,764,370 shares, approximately 13.8% of the current issued share capital.
• A proposed Relationship Agreement with NIPCO will include minority protections and ensure Savannah can operate independently of its largest shareholder.
• The board says terminating the buyback preserves approximately £10.05 million of cash and maintains flexibility for board-approved on-market buybacks under existing authority.
• These steps are related party transactions under AIM rules. The independent directors, after consulting Strand Hanson (nominated adviser), deem the terms fair and reasonable for shareholders.

Why kill the off-market buyback now?

The board’s rationale has two pillars. First, the Relationship Agreement introduces explicit protections for minorities and codifies Savannah’s independence from its largest shareholder. Second, scrapping the off-market buyback preserves approximately £10.05 million of cash that would otherwise have been spent buying back shares, strengthening financial flexibility.

Importantly, Savannah keeps the ability to return capital via on-market buybacks under the existing authority granted on 28 November 2025. So the company is not ruling out buybacks – it is choosing a cheaper, more flexible route while tying down governance terms with NIPCO.

The Relationship Agreement – protections and guardrails

Relationship agreements are common when a single investor holds a chunky stake. The idea is to lock in behaviours that protect minorities and keep management free to run the business. Savannah highlights the following expected terms:

• NIPCO will vote in favour of board-recommended governance-related resolutions – think re-appointments of directors or auditors, not commercial decisions.
• No right for NIPCO to appoint a director – a clear line between ownership and control.
• No hostile takeover by NIPCO, subject to certain exceptions – reducing the risk of an unwanted bid.
• Orderly market provisions if NIPCO sells – covering on and off-market sales, with Savannah getting time in the off-market case to find an alternative buyer.

The agreement is expected to remain in force while NIPCO and its affiliates hold 12.5% or more of Savannah’s issued share capital. Entry into the agreement is slated to occur shortly following regulatory consultation, and NIPCO is expected to undertake to accept any amendments required by that process.

What this means for minority shareholders

On the positive side, the guardrails matter. No board seat, no hostile bid, and a commitment to back governance items are all classic minority protections. Orderly sale provisions help reduce the risk of an uncontrolled block trade hitting the market.

The flip side is concentration. A 25% to 26.5% anchor shareholder has influence, even without a board seat. Liquidity dynamics can also shift as a larger portion of the register sits with long-term holders. The board’s response is to codify independence and keep cash in the bank – both sensible mitigations.

It is also worth noting that the further 1.5% NIPCO acquisition is not certain. Pricing, timing and counterparties for all these secondary-market purchases are not disclosed.

CEO’s increased stake – alignment and signal

Andrew Knott proposes to buy the remaining 25,481,655 shares from the cancelled buyback pool, bringing his total to 292,764,370 shares, or about 13.8% of the company. That is a sizeable vote of confidence from the chief executive, and it tightens alignment between management and shareholders.

The optics matter. With both the largest shareholder and the CEO increasing positions, the register looks more anchored. That can be reassuring for long-term holders, though it also concentrates ownership further. The independent directors have signed off the related party elements as fair and reasonable after advice from Strand Hanson.

Key numbers at a glance

Shares in cancelled off-market buyback	143,565,582
NIPCO immediate acquisition	118,083,927
NIPCO stake after immediate purchases	Approximately 25% of issued share capital
Potential additional NIPCO purchases	Up to approximately 1.5% of issued share capital
NIPCO potential total stake	Approximately 26.5% of issued share capital
CEO shares to acquire	25,481,655
CEO total holding post purchase	292,764,370 (approximately 13.8%)
Cash preserved by terminating buyback	Approximately £10.05 million
Relationship Agreement duration threshold	Remains in force while NIPCO and affiliates hold 12.5%+ of issued share capital

A quick jargon check

• Relationship Agreement – a contract that sets rules for how a major shareholder behaves, to protect minority shareholders and the company’s independence.
• Orderly market provisions – clauses that prevent a big holder from dumping stock in a way that disrupts the market, often giving the company time to find alternative buyers.
• Related party transaction – a deal involving directors or major shareholders that requires extra scrutiny. Here, the independent directors, advised by the nominated adviser, judged the terms fair and reasonable.

What to watch next

• Completion of the Relationship Agreement after regulatory consultation, including any amendments.
• Disclosures of NIPCO’s stake as purchases complete, and any company updates to reflect changes in ownership.
• Execution of the CEO’s proposed share purchase.
• Any board-approved on-market buybacks now that cash has been preserved.

My take

This looks like a pragmatic reshaping of the shareholder register with clear governance trade-offs. Savannah swaps an off-market buyback for cash preservation and a stronger set of minority protections, while enabling NIPCO to take a quarter of the company – possibly a little more – without creeping control.

The CEO buying more is a strong signal, and the Relationship Agreement should reassure on independence. The negatives are the increased ownership concentration and the uncertainty around any further NIPCO purchases. On balance, this is tidy corporate housekeeping that prioritises governance and liquidity over a one-off buyback – a reasonable call if management executes on the strategy and puts that £10.05 million to work.