TIDMPPG
RNS Number : 7496W
Plutus PowerGen PLC
13 December 2019
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the
publication of this announcement via a Regulatory Information
Service, this inside information is now considered to be in the
public domain.
Plutus PowerGen Plc / Ticker: PPG / Index: AIM
13 December 2019
PLUTUS POWERGEN PLC
("Plutus", the "Group" or the "Company")
Publication of shareholder circular and notice of general
meeting
Notice of annual general meeting
Further to the announcement released by the Company on 21
November 2019, the Board of Plutus announces that the Company has
published a circular and notice of general meeting in relation to
proposed resolutions to remove Charles Tatnall, James Longley and
Tim Cottier as directors of the Company and appoint Nicholas Lee,
David Horner and Dr. Nigel Burton as new directors (the
"Circular").
The Board of Plutus believes that the proposed resolutions are
not in the best interests of the Company and Shareholders as a
whole and is therefore unanimously recommending that you vote
against all of the proposed resolutions.
A general meeting of the Company (the "General Meeting") has
been convened for 12.00 noon on 10 January 2020 at the offices of
DMH Stallard LLP, 6 New Street Square, New Fetter Lane, London EC4A
3BF.
The Circular and a form of proxy for voting at the General
Meeting were posted to shareholders after close of business on 12
December 2019 and the Circular will also be available shortly on
the Company's website at www.plutuspowergen.com.
The Company also announces that its 2019 annual general meeting
will be held at the offices of DMH Stallard LLP, 6 New Street
Square, New Fetter Lane, London EC4A 3BF at 10:30 a.m. on 10
January 2020, prior to the General Meeting. The notice of annual
general meeting was posted to shareholders on 12 December 2019 and
will be available shortly on the Company's website at
www.plutuspowergen.com.
The Board of Plutus PowerGen UNANIMOUSLY recommends that
Shareholders VOTE AGAINST all the Requisitioners'
Resolutions
at the General Meeting
On 21 November 2019, your Board announced that it had received a
notice from JIM Nominees Limited requiring the Company to convene a
general meeting to consider proposed resolutions to remove the
Existing Directors from the Board and to replace them with Nicholas
Lee, David Horner and Dr. Nigel Burton.
The Board unanimously and wholeheartedly recommends that you
continue to back the Existing Directors, as passing the proposed
Requisitioners' Resolutions could:
-- place your company in the hands of directors with limited
experience of the business and a poor track record managing quoted
companies;
-- lead to the appointment of a director who has already caused
significant damage to the company, for which the Company is
expected to shortly commence legal action;
-- remove the directors with the experience of managing the Company; and
-- put at risk the AIM quotation.
WHY YOU SHOULD VOTE AGAINST THE REQUISITIONERS' PROPOSALS:
-- The Requisitioners have provided minimal information and
detail in relation to their strategy for the Company. Following
past meetings with certain of the proposed Alternative Directors,
the Existing Directors have seen no evidence that the proposed
Alternative Directors have a credible or materially different
strategy or an in depth understanding of the Company and flexible
energy generation sector in general.
-- The Requisitioners' actions have caused unnecessary
disruption and uncertainty for the Company's business and its
discussions with potential investors at a critical time and have
caused the Company to incur expense at a time when the Company's
working capital position is highly constrained and when the Board
needs to focus on the future strategy of the Group including the
possible sale of the Company's FlexGen sites and the pipeline of
new gas projects.
-- Replacing all the Existing Directors at this important time
is wholly unnecessary and there is limited evidence that the
candidates proposed by the Requisitioners would add new value to
the Board of the Company as it currently stands.
-- The Requisition process thus far has already caused concern
among key stakeholders involved in the Company's FlexGen sites and
discussions on the funding for the pipeline of gas sites, the
support of whom is vital to a successful outcome for the Company
and for Shareholders.
-- The Existing Directors cannot provide any guarantees that the
Requisitioners' Resolutions, if passed, will not pose a risk to the
continued admission of the Company's Ordinary Shares to trading on
AIM due to the suitability of the Alternative Directors and the new
Board for the purposes of the AIM Rules, although at this time
there is no evidence that the Alternative Directors will be
unsuitable to be Directors of a company with its shares traded on
AIM.
Further details regarding the above points can be found in the
Chairman's letter starting on page 6 of the Circular.
The above summary should be read in conjunction with the full
text of this announcement below and the Circular. Extracts from the
Circular are set out below. Defined terms used in this announcement
have the meaning as set out at the end of this announcement and as
set out in the Circular.
**S**
For further information, please visit www.plutuspowergen.com, or
contact:
+44 (0) 20 8720
Plutus PowerGen Plc 6562
Charles Tatnall, Executive Chairman
Allenby Capital Limited (Nominated Adviser +44 (0)20 3328
and Joint Broker) 5656
Nick Athanas
James Hornigold
Turner Pope Investments (TPI) Limited +44 (0)20 3621
(Joint Broker) 4120
Andy Thacker
St Brides Partners Limited (Financial +44 (0)20 7236
PR) 1177
Isabel de Salis
Extracts from the Circular
(references to pages or paragraphs or appendices below refer to
the relevant pages, paragraphs or appendices of the Circular and
references to "this document" refer to the Circular)
Expected timetable of events
Event Time and date
Latest time and date for receipt 12.00 noon on 8 January 2020
of Forms of Proxy from Shareholders
Voting record time for the General 6 p.m. on 8 January 2020
Meeting
Time, date and location of the 12.00 noon on 10 January 2020
General Meeting at DMH Stallard LLP
6 New Street Square
New Fetter Lane
London EC4A 3BF
All references to time in this document (including the Notice of
the General Meeting) and the accompanying Form of Proxy are to
local time in London.
Dear Shareholders,
Introduction
On 13 November 2019, your Board announced that it had received a
notice from JIM Nominees Limited ("JIM") purporting to require the
Company to convene a general meeting to consider certain
resolutions to remove all the Existing Directors from the Board and
appoint each of Nicholas Lee, David Horner and Dr. Nigel Burton as
directors of the Company. As announced on 13 November 2019, this
purported requisition was deemed invalid. JIM is a holder of in
excess of 5% of the Company's issued share capital.
On 21 November 2019, your Board announced that it had received a
further notice from JIM, purporting to require the Company to
convene a general meeting to consider certain proposed resolutions
to remove all the Existing Directors from the Board and appoint
each of Nicholas Lee, David Horner and Dr. Nigel Burton as
directors of the Company. After consultation with its legal
advisers, the Company determined that this second requisition
notice was valid. Accordingly, I am now writing to Shareholders to
convene the General Meeting to propose the Requisitioners'
Resolutions (1 to 6).
The Existing Directors believe this is a blatant opportunistic
attempt by the Requisitioners to gain control of the company for
their own benefit and not for the benefit of the shareholders of
Plutus.
The purpose of this document is to explain why your Board
unanimously recommends that you VOTE AGAINST the Requisitioners'
Resolutions.
This document contains the notice of the General Meeting, which
is to be held at 12.00 noon on 10 January 2020 at DMH Stallard LLP,
6 New Street Square, New Fetter Lane, London EC4A 3BF, at which the
Requisitioners' Resolutions (1 to 6) will be considered.
This document should be read in full, including the Board's
reasons for why you should vote against the Requisitioners'
Resolutions set out on page 16.
REASONS FOR THE BOARD'S RECOMMATION TO VOTE AGAINST THE
Requisitioners' RESOLUTIONS
Your Board unanimously recommends that you VOTE AGAINST the
Requisitioners' Resolutions (Resolutions 1 to 6) for the reasons
listed below.
As the Requisitioners point out, the Company has been subject to
external factors beyond its control, which I set out below. Some of
the factors that have adversely affected our business to date
include:
1. EIS relief was withdrawn in October 2015 for companies involved in our sector;
2. in March 2016, the UK Government consulted on reforms to the
Capacity Market resulting in the investee companies becoming liable
for the EIS tax relief granted to the EIS investors via a reduction
to CM payments in certain circumstances;
3. in March 2017, Ofgem confirmed that from the winter of
2017/2018 TRIADs would be reduced over 3 years for generators such
as PPG to the residual charge;
4. after the June 2017 election the Medium Combustion Plant
Directive (MCPD) was announced which required us to fit selective
catalytic reduction (SCR) or other measures to reduce the NOx from
our FlexGen portfolio at a cost of between GBP300,000 to GBP500,000
per site; and
5. on 15 November 2018, the General Court of the European Union
issued a judgment annulling the Commission's original State aid
decision to approve a Capacity Mechanism scheme. This was
re-introduced in October 2019.
The two biggest adverse factors for Plutus have been: (i) the
loss of TRIAD income making the sites marginal in terms of
profitability from operations which have significantly lowered the
value of the co-owned companies; and (ii) the original suspension
of CM which meant that the Company was neither able to sell the
sites or refinance the co-owned investee companies. These factors
have contributed to the share value of the Company falling because
of factors outside the control of the Company and its directors.
The Existing Directors believe that the recent re-instatement of CM
should help significantly with the cash flow of the co-investee
companies over the next 15 years and add to the value of the sites
although not sufficient to compensate for the loss of TRIAD income.
However, it is the Existing Directors view that the CM
re-instatement will facilitate the sale of the FlexGen assets, the
sale of which is being handled by Rockpool and advised on by Jones
Lang LaSalle.
The Existing Directors believe that between the Requisitioners
and the Alternative Directors there is limited experience of the UK
flexible energy generation sector and in some cases there is a
track record of destruction of shareholder value and significant
dilution for shareholders. For example, two days after the
appointment of Nicholas Lee to the board of RiverFort Global
Opportunities plc ("RiverFort") (formerly called Paternoster
Resources PLC) on 28 April 2011, the share price was 114.5p. As of
10 December 2019, the mid-market share price of RiverFort was
0.075p, a fall of 99.9% in a period of over 8 1/2 years. In
addition, it is recorded at Companies House that there were
32,857,956 shares in issue on 10 May 2011, 13 days after Mr Lee's
appointment. RiverFort had, at the year ended 31 December 2018,
6,789,335,226 (6.789 billion) ordinary shares in issue. This
represents a huge destruction in shareholder value and dilution for
shareholders in RiverFort. It is also worth noting that Miles
Nicholson, who prepares all the accounts of the Plutus co-investee
companies is also the Company Secretary of RiverFort, which has not
been previously disclosed by Riverfort and the Existing Directors
believe this may be a conflict of interest.
The Existing Directors have led the company's achievements since
August 2014 when the takeover of Plutus Energy was completed by
your Company. Charles Tatnall (Executive Chairman) and James
Longley (Interim CEO and Chief Financial Officer) approached the
late Philip Stephens and Paul Lazarevic approximately two years
before the acquisition took place with a view to them teaming up to
develop FlexGen sites in the UK. It had been identified that there
were significant industry and tax advantages to be had by building
out a portfolio of 20MW sites each to be held in a separate company
and to be funded by outside investors. The Existing Directors
structured the "bottom up" investment approach as this minimised
dilution to the holding company shareholders whereby outside
investors invested directly into companies which would ultimately
end up being owned on average 44.5% by Plutus. By this way circa
GBP35 million of equity investment was attracted from investors
managed by Rockpool Investments LLP ("Rockpool") who had been
approached by certain of the Existing Directors who held this
vision and structure. This would have caused significant dilution
in the holding company if this level of funding had been invested
directly into Plutus.
As most of the asset finance has also been provided by Rockpool
and their investors, other than a GBP3million tranche provided by
Lombard, it is the case that the Existing Directors have introduced
the funding for the nine sites co-owned with Rockpool. This
achievement would not have happened without your existing board.
The Late Mr Stephens and Mr Lazarevic joined the board as the
"operations" side of the Company whilst Charles Tatnall and James
Longley were to concentrate on the financial, funding, shareholder
and corporate side of the Company. This arrangement worked quite
successfully for some time but contemporaneously the power industry
became the subject of a number of reviews by various regulatory and
government bodies, including BEIS, Ofgem and Defra detailed
above.
In letters dated 19 August 2019, Plutus was given notice that
our management contracts were to be terminated in eight out of the
nine companies with six months' notice because the co-owned
companies needed to reduce costs further than the already reduced
fees we were receiving as agreed under the letters of variation
with the co-owned investee companies. The Company has been accruing
the balance of the fees which are due to Plutus when the
co-investee companies are sold or the debt is refinanced under the
terms of the letters of variation.
On 18 October 2019, Paul Lazarevic informed Rockpool that he had
left the company, which was in breach of his contract with Plutus.
The directors of the co-investee companies notified Plutus on 21
October 2019 that we had breached our management contracts with
them as they didn't believe the Company had any employees remaining
with sufficient expertise who could fulfil the terms of the
Company's management agreement. We attempted to sub-contract the
management of the sites but the contractors concluded that the
notice period remaining was too short for them and they ultimately
declined.
The requisitioners state in the their letter, ".......and to
reinstate Paul Lazarevic as a director of the Company.....".
Following the breach of contract by Mr Lazarevic the company has
taken legal advice as to what steps it may take against Mr
Lazarevic to protect the interests of the Company and its
shareholders and the Company anticipates shortly commencing legal
proceedings against Mr Lazarevic. As such the Existing Directors
feel that such a move to re-appoint Mr Lazarevic to the board of
Plutus would be totally inappropriate. We believe that Mr Lazarevic
has been conspiring against the best interests of your company for
some time.
We are in advanced discussions to appoint a highly experienced
executive director to the Board who is an industry leader within
our sector and he will spearhead the negotiations for funding the
proposed gas portfolio. We are also seeking to appoint a further
independent non-executive director to the Board who we are also in
advanced discussions with and who will bring valuable experience,
especially in finance, to the Board. There can be no guarantee that
these appointments will come to fruition and both appointments
remain subject to completion of satisfactory due diligence.
It is the view of the Existing Directors that, during their
period of office, they have fulfilled their duties as directors to
the full and they have done all that is possible to maintain the
value of our investments and the co-owned investee companies but
have been highly constrained due to the external factors adversely
affecting the business of Plutus as detailed above and in recent
announcements. It is the view of the Existing Directors that no
other director or the appointment of the Requisitioners would have
made a difference to these circumstances. The Existing Directors
are no longer drawing or accruing fees or salaries from Plutus.
The requisitioners also state, ".........The proposed new
directors have the relevant experience and access to capital in
order to stabilise, refocus and grow the Company......". We have
previously asked them to assist us with financing the gas site
portfolio going forward but they have refused to help us unless
they were appointed to the board, a further demonstration of their
self-interest rather than the interests of the shareholders as a
whole. The track record of certain of the Requisitioners of
significant dilution to shareholders in other public companies and
destruction of shareholder value speaks for itself. Indeed, they
have given no detailed plans as to how they would take the Company
forward other than the foregoing.
The Existing Directors strongly refute the likelihood that the
requisitioners ".........may even enable the Company to persuade
Rockpool to reinstate its management contracts". The directors of
the Company have met with the directors of the co-investee
companies together with Rockpool and they said that there were no
circumstances whereby Plutus would have the management contracts
re-instated. The co-owned FlexGen sites are in a sales process and
the loss of the management contracts took place when Mr Lazarevic
was a director and the whole basis for the loss of the contracts is
to save costs and enhance the value of the sites pending their
sale. Indeed, the Existing Directors were informed that the three
directors of the co-investee companies have set up their own
management company, Crest Energy Limited, to manage the co-owned
sites in place of Plutus.
The primary assets of the Company, being the interests in the
FlexGen sites, are now in a sale process and the appointment of new
directors would make no difference to that process or any of the
operations of the Company as it is already in care and maintenance
pending sale of the Flexible Generation assets and we have plans in
place to appoint an industry leader as director to spearhead the
funding talks for gas sites with DWPF and the infrastructure fund
they have introduced to us.
Risk of suspension and cancellation from the AIM market
Shareholders should be aware that the Requisitioners'
Resolutions, if passed, could potentially pose a risk to the
admission of the Ordinary Shares to trading on AIM. If the
Requisitioners' Resolutions are passed, the Company's nominated
adviser will need to consider the proposed Alternative Directors
and Board composition in connection with the overall suitability of
the Company to be a company with shares admitted to a public market
in the UK. In order to comply with the AIM Rules, information has
been requested from the Alternative Directors to enable the
Company's nominated adviser to undertake customary due diligence
and satisfy itself as to Board composition and suitability.
Information has been provided by the Alternative Directors and the
due diligence process is ongoing. To date the nominated adviser has
not indicated to the Existing Directors that they are, or have
become, aware of anything which would lead them to conclude that
the Alternative Directors would be unsuitable to be directors of a
company with its shares traded on AIM. The Nominated Adviser is
confident that the due diligence process will be completed by the
time of the General Meeting. In the event that the Company's
nominated adviser cannot reach a satisfactory conclusion in this
respect and as to Board suitability for the purposes of the AIM
Rules, then should all the Requisitioners' Resolutions be passed,
the nominated adviser may be compelled by the AIM Rules and AIM
Rules for Nominated Advisers to resign. Following the resignation
of the Company's nominated adviser taking effect, in the absence of
the appointment of a new nominated adviser, trading in the
Company's Ordinary Shares on AIM will be suspended. If the Company
cannot appoint a replacement nominated adviser within one month of
such suspension, the admission of the Company's Ordinary Shares to
trading on AIM will be cancelled. The Existing Directors are of the
view that, in the circumstances, there can be no guarantee that a
replacement nominated adviser can be appointed within the
appropriate timescale.
REQUISITIONERS' STATEMENT
The Requisitioners' Statement accompanied the Requisitioners'
letter of 19 November 2019, which the Requisitioners require the
Company to circulate to those members receiving notice of the
requisitioned General Meeting, in accordance with section 314 of
the Companies Act 2006. The Requisitioners' Statement in its
entirety is set out in Appendix 1 to this document.
The Existing Directors would emphasise that the Company is
required by law to circulate to Shareholders the Requisitioners'
Statement, as set out in Appendix 1 of this document, and the
Existing Directors cannot therefore take any responsibility for the
accuracy of the statement nor the claims made within the statement,
including the biographies of the Alternative Directors. The
Existing Directors cannot take any responsibility for whether any
forward-looking statements within the Requisitioners' Statement can
be successfully achieved or implemented.
The Existing Directors are of the view that the Requisitioners
have provided very little information and detail in relation to
their strategy for the Company. Following previous meetings with
the Alternative Directors, the Existing Directors have not seen
sufficient evidence that the proposed Alternative Directors have a
credible strategy or an in depth understanding of the Company and
the flexible energy generation sector.
Given the above, and other potential concerns regarding the
Requisitioners' Statement, the Existing Directors believe that
Shareholders should consider exercising an appropriate level of
caution when evaluating the Requisitioners' Statement in forming a
view regarding voting decisions for the General Meeting. In
addition, the contents of this Chairman's Letter should be borne in
mind.
RECOMMATION of the BOARD
For the reasons set out above, the Plutus Board considers that
the Requisitioners' Resolutions to:
-- remove the Existing Directors, being Charles Tatnall, James Longley and Tim Cottier; and
-- replace them with the Alternative Directors, being Nicholas
Lee, David Horner and Dr. Nigel Burton,
are, in each case, not in the best interests of the Company or
Shareholders as a whole and the Board therefore unanimously
recommends that all Shareholders VOTE AGAINST the Requisitioners'
Resolutions, as all the Existing Directors have irrevocably
undertaken to do in respect of their aggregate beneficial holdings
of 171,333,334 Ordinary Shares (representing approximately 19.6 per
cent. of the issued share capital of the Company).
ACTION TO BE TAKEN
You will find, set out at the end of this document, a Notice
convening the General Meeting, to be held at 12.00 noon on 10
January 2020 at the offices of DMH Stallard LLP, 6 New Street
Square, New Fetter Lane, London EC4A 3BF, at which the Resolutions
will be considered. The full text of the Resolutions is set out in
the Notice. Voting at the General Meeting will be by poll and not
on a show of hands and each Shareholder entitled to attend and who
is present in person or by proxy will be entitled to one vote for
each Ordinary Share held.
You will find enclosed with this document a Form of Proxy for
use at the General Meeting or any adjournment thereof. Whether or
not you intend to be present at the General Meeting, you are
requested to complete, sign and return the Form of Proxy in
accordance with the instructions printed on it so as to be received
by the Company's registrars, Share Registrars Limited, The
Courtyard, 17 West Street, Farnham, Surrey, GU9 7DR, as soon as
possible, and in any event, no later than 12.00 noon on 8 January
2020 (or, in the case of an adjournment, not later than 48 hours
(excluding non-working days) before the time fixed for the holding
of the adjourned meeting).
Shareholders wishing to complete their paper Form of Proxy in
line with the Board's recommendations should place an "X" in the
boxes under the heading "Against" for the Requisitioners'
Resolutions.
If you have any questions relating to this document, the General
Meeting and/or the completion and return of the Form of Proxy,
please contact Share Registrars Limited on 01252 821390 if calling
within the United Kingdom or +44 1252 821390 if calling from
outside the United Kingdom. Lines are open 9:00am - 5:30pm Mon-Fri.
Calls to the helpline from within the United Kingdom are charged at
your network providers standard rates. Call to the helpline from
outside the United Kingdom will be charged at applicable
international rates. Please note that cannot provide any financial,
legal or tax advice and calls may be recorded and monitored for
security and training purposes.
The completion and return of a Form of Proxy will not preclude
you from attending and voting in person at the General Meeting (or
any adjournment thereof) if you wish to do so and are so
entitled.
The Board of Plutus UNANIMOUSLY recommends that
Shareholders VOTE AGAINST the Requisitioners' Resolutions
at the General Meeting
Yours faithfully,
Charles Tatnall
Executive Chairman
Definitions
The following definitions apply throughout this document unless
the context otherwise requires:
AIM Rules: the AIM Rules for Companies published
by London Stock Exchange Group plc,
which govern the admission and trading
of a company's securities on AIM,
a stock market operated by London
Stock Exchange Group plc
Alternative Directors: Nicholas Lee, David Horner and Dr
Nigel Burton
Board: the current board of directors of
the Company, being the Existing Directors
CM Capacity Mechanism
Company or Plutus: Plutus PowerGen plc, registered in
England and Wales with registered
number 05859612
CREST: the relevant system (as defined in
the Regulations) in respect of which
Euroclear UK & Ireland Limited is
the operator (as defined in the Regulations)
EU: European Union
Existing Directors: Charles Tatnall, James Longley and
Tim Cottier, the current directors
of the Company
Form of Proxy: the Form of Proxy enclosed with this
document for use by Shareholders
in connection with the General Meeting
General Meeting: the general meeting of the Company
to be held at 12.00 noon on 10 January
2020 (and any adjournment thereof)
for the purposes of considering and,
if thought fit, passing the Resolutions
Ordinary Shares: the ordinary shares of 0.1 pence
each in the capital of the Company,
having the rights set out in the
Company's Articles of Association
Notice: the notice of the General Meeting
set out on pages 16 to 19 (inclusive)
of this document.
Regulations: the Uncertificated Securities Regulations
2001 of the United Kingdom
Resolutions: the proposed resolutions set out
in the Notice
Requisition: the notice received on 20 November
2019 from the Requisitioners to call
a general meeting to propose Resolutions
1 to 6
Requisitioners: Chelverton Asset Management Limited
and RiverFort Global Opportunities
plc
Requisitioners' Resolutions: Resolutions 1 to 6 set out in the
Notice
Requisitioners' Statement: the statement of the Requisitioners
set out in Appendix 1
RiverFort RiverFort Global Opportunities plc,
an existing shareholder in the Company
and one of the Requisitioners
Shareholders: holders of Ordinary Shares
UK or United Kingdom: the United Kingdom of Great Britain
and Northern Ireland
pence, GBP or p the lawful currency of the United
Kingdom
All times referred to are local time in London time.
All references to legislation in this document are to the
legislation of England and Wales unless the contrary is indicated.
Any reference to any provision of any legislation shall include any
amendment, modification, re-enactment or extension thereof.
Words importing the singular shall include the plural and vice
versa, and words importing the masculine gender shall include the
feminine or neutral gender.
Appendix 1 Requisitioners' Statement
Dear Shareholders
Introduction
We are the two largest institutional shareholders in Plutus
PowerGen plc ("PPG" or the "Company"), with a combined holding of
in excess of 9%. We are highlighting here our concerns about the
Company and explaining the background to the requisition that we
have recently served.
As institutional shareholders, we consider that it is only right
and responsible for us to take an activist approach where we
consider that circumstances are such that drastic action is
necessary. We have done this because we believe that there are now
limited options to preserve shareholder value in a situation where
the Board is unwilling to accede to, and/or dismissive of, wholly
reasonable shareholder demands.
In summary:
-- the Board has rejected numerous approaches by us over several
months aimed at providing improved financial performance,
governance and expertise to PPG;
-- the Company's shares have fallen by over 93% since early 2018; and
-- the replacement of the Board is the only way that the Company
will be able to raise sufficient funds to survive and have a viable
chance to thrive.
We therefore believe that the only way forward now is for us to
seek to remove the existing board in its entirety, appoint David
Horner, Nicholas Lee and Nigel Burton (each of whom have consented
to act as directors of the Company) to the board, and to reinstate
Paul Lazarevic as a director. Paul being the only recent board
member with the relevant sector experience. Whilst we regret the
need to deal with this matter in the public arena, we have made no
progress dealing privately with the Board and therefore cannot see
any alternative but to approach shareholders directly to support
us.
We are aware that the sector in which the Company operates has
recently been difficult given the issues with the capacity
mechanism ("CM)") and the phasing out of the triad payments. Whilst
we were pleased to learn that CM is to be reinstated, in the short
term, we do not believe that this does anything to help the
Company's current financial position. We remain very concerned
about the complete lack of any progress by the Company over the
last two years and the serious weakening of its financial
position.
Our concerns
We list below a selection of our concerns that have come to
light over recent months:
-- PPG has lost its management contracts with Rockpool
Investments LLP ("Rockpool"), which were the Company's only source
of income, amounting, we believe, to over GBP500,000 per annum.
Also, this apparent breakdown in the Rockpool relationship does not
bode well for the proposed development of the Company's first gas
site with Rockpool;
-- there is a lack of cost control with administration costs
appearing to be very high given the scope and scale of the
Company's operations. The GBP500,000 raised from the placing in
November 2018 has been spent when financial prudence should have
been observed and administration costs reduced;
-- the Company failed to get planning approval on the site in
Devon which is a blow given the excitement and expectation when it
was first announced;
-- the potential funding for the gas sites does not seem to be any further forward;
-- Paul Lazarevic, the only board member with any relevant
sector experience and important relationships within the sector and
the person responsible for operations has now left the Company so,
in our view, the current board is no longer fit for purpose;
-- PPG's share price has fallen significantly since early 2018,
at one stage reaching 0.11 pence, valuing the Company at around
GBP960,000;
-- the Company appears to be very short of cash - on 30 May
2019, it announced that, as at 30 April 2019, it only had a cash
balance of GBP64,000 even after the GBP500,000 placing in November
2018. Now it would appear that the figure at that date was in fact
lower still at GBP45,177 - the current cash balance must now be
almost zero. Given the Company's recent share price performance we
believe that the current team will struggle to raise new
funding;
-- the recent publication of the Company's results for the year
to 30 April 2019, moments before the deadline to avoid suspension
in trading of the Company's shares, has done more to heighten our
concerns as opposed to allaying our fears; and
-- the Company's financial situation and prospects have now
clearly deteriorated further since its year end as a result of the
loss of the Rockpool contracts. The Company's auditors appear to
agree with this analysis, stating that the Company will need to
raise new working capital and including a material uncertainly
paragraph within their audit report.
The way forward
We are confident that PPG does have the potential to do well in
what will ultimately be an attractive sector, however, we believe
that there is an urgent need to change the board in order to secure
the Company's survival. The proposed new directors have the
relevant experience and access to capital in order to stabilise,
refocus and grow the Company. Furthermore, we believe that a new
board will provide all stakeholders with renewed confidence in the
Company which may even enable the Company to encourage Rockpool to
consider the reinstatement of the management contracts.
Interestingly, once our requisition to effect change was
announced by the Company, the share price rebounded from a low of
0.11 pence to 0.165 pence, an increase of some 50%, thereby
confirming investors' appetite for change at the Company.
Action to be taken
In summary, we strongly urge shareholders to vote in favour of
the resolutions that will be proposed by us at the forthcoming
general meeting of the Company as we believe that this is the only
way for shareholders to take affirmative action with a view to
protecting our investment in the Company.
Yours sincerely
David Horner Nicholas Lee
Managing Director Investment Director
Chelverton Asset Management RiverFort Global Opportunities plc
Notice of General Meeting
PLUTUS POWERGEN PLC
NOTICE OF GENERAL MEETING
NOTICE IS HEREBY GIVEN that a general meeting of the
shareholders of Plutus PowerGen plc (the Company) (the General
Meeting) will be held at 12.00 noon on 10 January 2020 at the
offices of DHM Stallard LLP, New Street Square, New Fetter Lane,
London, EC4A 3BF, for the purpose of considering and, if thought
fit, passing the following proposed resolutions, all of which shall
be proposed as ordinary resolutions, special notice having been
given to the Company pursuant to sections 168 and 312 of the
Companies Act 2006:
RequisitIoners' Resolutions
ORDINARY RESOLUTIONS
1 THAT Charles Tatnall be and is hereby removed as a director of the Company.
2 THAT James Longley be and is hereby removed as a director of the Company.
3 THAT Tim Cottier be and is hereby removed as a director of the Company.
4 THAT Nicholas Lee be and is hereby appointed as a director of
the Company (with such appointment taking immediate and
simultaneous effect).
5 THAT David Horner be and is hereby appointed as a director of
the Company (with such appointment taking immediate and
simultaneous effect).
6 THAT Dr. Nigel Burton be and is hereby appointed as a director
of the Company (with such appointment taking immediate and
simultaneous effect).
-ENDS-
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
NOAGGGGUPUPBPWP
(END) Dow Jones Newswires
December 13, 2019 02:00 ET (07:00 GMT)
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