RNS Number:2919Y
Ricmore PLC
13 February 2006
For release at 7.00am on 13 February 2006
Energy Assets Limited to join AIM
via Reverse Takeover of
Ricmore PLC
HIGHLIGHTS
* Energy Assets Limited ("EAL"), a company set up to provide meter asset
management services to industrial and commercial users of gas and electricity
and their suppliers, will join AIM on 13 March 2006 via a reverse takeover of
Ricmore plc ("Ricmore" or the "Company") in conjunction with a placing of new
ordinary shares in Ricmore.
* Ricmore, an AIM listed investment company with cash of approximately
GBP323,000 at 30 June 2005, will acquire EAL for GBP2.123 million in total,
satisfied by the issue of 141,500,000 new ordinary shares to EAL shareholders.
* In addition, a share placing of 83,333,333 new ordinary shares of Ricmore at
1.5p each will raise GBP1.25 million of new money before expenses.
* The market capitalisation of the Enlarged Group, which will be re-named as
Energy Asset Management plc ("EAM"), will be GBP3.7 million based on a 1.5p
placing price.
* The Directors of Ricmore commenced discussions with EAL last year. They
believe that the acquisition presents an opportunity to acquire a company that
has the potential to significantly increase shareholder value.
* The transaction is subject to shareholder approval at an extraordinary
general meeting ("EGM") called for 9 March 2006.
* Subject to the passing of the resolutions at the EGM the Enlarged Group will
be admitted to AIM on 13 March 2006.
* Hichens, Harrison & Co plc has been appointed as broker to the Company for
the purposes of the transaction and will continue to act as broker following
Admission.
Background
EAL was set up to provide meter asset management services, including utilising
new forms of technology, to industrial and commercial users of gas and
electricity and their suppliers. This includes a range of activities from
technical support, operational services, data collection and management of
supply chain. Ricmore was formed to seek to establish, invest in or acquire
assets, businesses or companies in the internet and technology related services
sector in the UK. The Directors believe that the Acquisition presents an
opportunity to acquire a company that has the potential to significantly
increase shareholder value.
EAL - strategy
EAL has developed and established the infrastructure to service its Meter Asset
Manager business and has signed 2 contracts with Independent Gas Suppliers.
EAL's specific target areas of business are industrial and commercial metering,
datalogging (remote meter reading) and the supply of electricity meters. EAL has
focused on these areas to differentiate itself as a key service provider. The
target is to achieve within five years a market share of approximately 50,000
specialist industrial and commercial gas meters, approximately 45,000
dataloggers and approximately 50,000 electricity meters by demonstrating
consistently high levels of service and customer satisfaction to current and
potential customers.
Stephen Barclay, non-executive Chairman of Ricmore plc, said: "We have had
detailed discussions with the management of EAL and we think this deal is an
excellent opportunity for both companies. EAL gains access to fresh capital
and access to the equity market while shareholders in Ricmore will own a stake
in an exciting company."
Alan McKeating, Managing Director of EAL, added: "We look forward to completing
this transaction and developing the company in line with our business plan.
We intend to keep shareholders and the market fully informed of all
developments as we progress".
For further information contact:
Stephen Barclay, non-executive Chairman
Ricmore PLC 020 7743 6370
Alan McKeating, Managing Director
Energy Assets Limited 01506 602674
Brett Miller / Gavin Burnell
Ruegg & Co Limited 020 7584 3663
Ben Simons
Hansard Communications 020 7245 1100
Christian Dennis
Hichens Harrison & Co plc 020 7588 5171
Proposed acquisition of Energy Assets Limited
Approval of waiver of obligations under Rule 9 of the City Code on
Takeovers and Mergers
Placing of 83,333,333 new Ordinary Shares at a price of 1.5p per share
Change of name to Energy Asset Management plc
Application for re-admission to AIM
Notice of Extraordinary General Meeting
Introduction
The Company has entered into an agreement for the acquisition of the whole of
the issued share capital of EAL. In addition, the Company has announced that it
is proposing to raise GBP1,250,000, before expenses, by way of the Placing.
EAL was set up to provide meter asset management services, including utilising
new forms of technology, to industrial and commercial users of gas and
electricity and their suppliers. This includes a range of activities from
technical support, operational services, data collection and management of
supply chain. Ricmore was formed to seek to establish, invest in or acquire
assets, businesses or companies in the internet and technology related services
sector in the UK. The Directors believe that the Acquisition presents an
opportunity to acquire a company that has the potential to significantly
increase shareholder value.
The consideration for the Acquisition will be GBP2.123 million, to be satisfied
by the allotment and issue by the Company to the Vendors of 141,500,000 new
Ordinary Shares credited as paid up at the Placing Price. The Company intends,
by way of a placing of 83,333,333 new Ordinary Shares at a price of 1.5p per
share, to raise GBP1,250,000 before expenses. The expected net proceeds of the
Placing of GBP855,500 will be applied as working capital for the Enlarged Group,
providing resources to allow the Enlarged Group to build its executive and
management team and to implement its business plan.
The Acquisition will constitute a reverse takeover under the AIM Rules and is
therefore conditional (inter alia) upon the approval of Shareholders in general
meeting. In addition, following Completion, and subject to the exercise of
Unapproved Options and EMI Options, the Concert Party will together be the
beneficial owners of a maximum of 176,773,766 Ordinary Shares in the Company,
representing a maximum of 64.1per cent. of the enlarged share capital. The
Independent Shareholders will also therefore be asked to vote on a resolution to
approve a Waiver by the Panel of any obligation on the part of members of the
Concert Party to make a general offer to Shareholders under Rule 9 of the
Takeover Code arising from the issue to members of the Concert Party of the
Consideration Shares pursuant to the Acquisition Agreement, the issue to Alan
McKeating, Philip Bellamy-Lee, Robert Hatton and John Butler (members of the
Concert Party) of 416,534, 416,533, 416,533 and 416,666 Ordinary Shares
respectively pursuant to the Placing or the issue of Ordinary Shares pursuant to
the exercise of the Unapproved Options or EMI Options.
As John Shaw and I are Directors, and hold shares in EAL, the Acquisition
constitutes a related party transaction for the purposes of the AIM Rules and a
substantial property transaction with a director for the purposes of s.320 of
the Act. John Shaw holds 601 ordinary shares and 400 'B' ordinary shares in EAL
and I hold 721 ordinary shares and 1,000 'B' ordinary shares in EAL. We will
receive 7,214,337 Consideration Shares and 12,122,357 Consideration Shares
respectively on Completion. Accordingly, we have not participated in the Board's
consideration of the proposed Acquisition of EAL and we will not vote on any of
the Resolutions to be proposed at the EGM. Lance O'Neill, the Independent
Director, who has been independently so advised by Ruegg, believes that the
terms of the proposed Acquisition of EAL are fair and reasonable so far as the
Shareholders are concerned and that the Shareholders should vote in favour of
the Acquisition of EAL. The full recommendation is set out at the end of this
letter. Lance O'Neill is considered independent as he has no shareholding in EAL
and is not otherwise connected with EAL.
Background to and reasons for the Acquisition
The Company has had no trading business since admission to AIM on 30 March 2005.
Since this time the Directors have been reviewing various options in line with
the Company's investment and acquisition strategy. The Directors believe that
the Acquisition will allow Shareholders to participate in an Enlarged Group
which combines the EAL business with the Company's existing cash resources and
its access to the equity market and has the potential for delivering positive
returns to shareholders.
Information on Ricmore
Ricmore was incorporated on 4 March 2005 and admitted to trading on AIM on 30
March 2005. Ricmore is an investment company and has been seeking to establish,
invest in or acquire assets, businesses or companies in the internet and
technology-related services sector in the UK. As at 30 June 2005 Ricmore had
cash at bank of GBP323,923.
Principal Terms of the Acquisition
On 13 February 2006 the Company entered into the Acquisition Agreement with the
Vendors to acquire the entire issued share capital of EAL. Under the terms of
the Acquisition Agreement the Company has agreed to pay a consideration of
GBP2.123 million to be satisfied by the issue and allotment on Completion of the
Consideration Shares by the Company to the Vendors credited as paid up at the
Placing Price. The Company and the Vendors have given each other mutual
warranties and indemnities regarding the Company and EAL and its subsidiaries
respectively. The Acquisition is conditional, inter alia, on the passing of the
Resolutions and Admission. Upon Completion, the Proposed Directors will be
appointed to the board of the Company. The Consideration Shares will represent
57.34 per cent. of the Enlarged Share Capital and will, when issued, rank pari
passu in all respects with the other Ordinary Shares then in issue, including
all rights to all dividends and other distributions declared, made or paid
following Admission.
Options to be granted to EAL management team
The Board intends to adopt the EMI Scheme and the Unapproved Share Option Scheme
prior to Completion. It is intended that the Board will grant, conditional upon
Completion, the following options to the management team of EAL under the EMI
Scheme and the Unapproved Option Scheme:
Name Unapproved Options EMI Options
Alan McKeating 4,790,834 6,666,666
Philip Bellamy-Lee Nil 5,500,000
Robert Hatton Nil 5,500,000
John Butler Nil 5,500,000
Gary Rimmer 1,100,000 Nil
All of the options granted to the management team of EAL under the EMI Scheme
and Unapproved Share Option Scheme are exercisable at the Placing Price subject
to the performance condition that the earnings per share of The Company as
derived from the audited accounts for any accounting period shall exceed 0.5
pence and the earnings per share shall be calculated according to the prevailing
accounting standards adopted by the Company and its Auditors from time to time
but adding back all share-based expenses deducted under FRS20. The method of
calculation may be adjusted by the Board (after taking advice from the Auditors
or such other suitable advisers as they determine to be appropriate) to take
account of variations of share capital other than acquisitions by the Company.
The performance condition will not apply in the event of the exercise of an
option on a takeover or if an option holder dies or leaves the Enlarged Group
due to ill health, injury or disability. For future grants of EMI Options, the
Board may impose performance conditions appropriate at that time.
Current Trading and Prospects
Since admission to AIM in March last year, Ricmore has not traded and has been
seeking an appropriate acquisition target in line with its objectives, whilst
minimising operating expenses. EAL has developed and established the
infrastructure to service its MAM business and has signed 2 contracts with
Independent Gas Suppliers. EAM Assets Limited, a subsidiary of EAL, has entered
into a lease financing agreement with ICON EAM LLC.
Directors and Proposed Directors
Brief biographical details of the Directors and Proposed Directors are set out
below.
Directors
Stephen Barclay, FCA MBA, (aged 63), Non-Executive Chairman
Stephen Barclay qualified as a Chartered Accountant in 1964 with Robson Rhodes
before obtaining an MBA degree from Wharton Business School in 1967. In 1989,
after a career during which he reorganised various companies, he established
Clifton Financial Associates Plc to provide corporate finance advice to small to
medium sized private and public companies. In August 1998, he became group
executive chairman of Seymour Pierce Group Plc. He resigned as a director of
Seymour Pierce Group Plc and various other companies at the end of March 2001 to
form CFA Capital Group Plc, a financial services holding company, from which he
resigned as Chairman on 31 March 2005. He is a director of a number of public
companies and is a governor of the London School of Economics and Political
Science. He is a senior adviser to, and shareholder of, Chatsford Corporate
Finance Limited.
John Shaw, FCA, (aged 56), Non-Executive Director
John Shaw qualified as a Chartered Accountant in 1975 with Touche Ross & Co in
London. Subsequently, he spent two years seconded to the Quotations Department
of the London Stock Exchange returning to Touche Ross & Co to join the Corporate
Finance Group until 1982. After a period as a sole practitioner, he joined Chase
Investment Bank Limited in 1985, was appointed a director and founded the Equity
Investment Group, formed to invest in unquoted companies. In 1990 he joined
Henry Ansbacher & Co Limited. He started working with Clifton Financial
Associates Plc in early 1995 and was appointed a director in December 1996. He
was appointed a director of Seymour Pierce Limited in December 1998 where he was
initially Group Company Secretary and latterly Head of Private Equity. In March
2001, he co-founded CFA Capital Group Plc, whose operating subsidiary, City
Financial Associates Limited became a nominated adviser and sponsor. He left CFA
Capital Group Plc in July 2004 to form Chatsford Corporate Finance Limited.
Lance O'Neill, BSc (Econ) Hons, (aged 48) Non-Executive Director
Lance O'Neill is a London-based director of DFB (Australia) Pty. Ltd, a
Sydney-based investment adviser. He is also chairman of EP&F Capital Plc, Ragusa
Capital Plc and Alba Mineral Resources Plc, all of which are quoted on AIM. He
has worked in international securities and investment markets since 1981. During
this time, he spent over ten years based in London and Sydney and periodic work
in the United States and the Far East, principally with Prudential-Bache
Securities Inc., Societe General (Australia) Securities and Rivkin Securities
Limited, working in institutional equity and fixed income sales and trading as
well as in corporate finance. He is a director of and/or investor in a number of
private and public companies in the UK, USA and Australia. He holds a BSc (Econ)
Hons in Accountancy and Law from the University of Wales and is an affiliate
member of the Securities Institute of Australia.
Proposed Directors
Alan McKeating, MBA, (aged 44) Managing Director
Alan McKeating joined British Gas Scotland Ltd as an engineering apprentice. He
held a number of technical, design, planning and operational roles before he was
appointed the Engineering Operations Manager for the Edinburgh area, responsible
for safe operation, management of the emergency service, maintenance and
replacement of the distribution pipeline infrastructure. In 1995 he joined the
Almond Valley Partnership Ltd, an independent consultancy and pipeline
contractor where he was a director in charge of design and technical operations.
In 1996 he joined Fusion Group plc initially as technical manager and from 1998
as Sales Director where he was part of the team that won The European Supply
Chain Excellence Award in 2001, as judged by Accenture. He left Fusion Group plc
in 2004 to establish Sitework Support Services Limited and more recently EAL. He
has also been Chairman of the Society of British Gas Industries in the
distribution and transmission section as well as the metering section between
2002 and 2004.
John Butler, ACMA, (aged 54) Finance Director
John Butler worked for Cape Universal Limited and Stal Levin Limited as
assistant accountant before joining UGI Meters Limited, a manufacturer of
domestic and industrial gas meters, part of Hanson plc in 1978, as financial
accountant. In 1979 he qualified as a Chartered Management Accountant. Whilst at
UGI Meters Limited he was promoted to key financial positions, being appointed
Finance Director and Company Secretary in 1997. His responsibilities included
financial responsibility for joint ventures in the Far East. He left UGI Meters
Limited in 2001 to take up various consultancy posts and provide accounting
services to SME's.
Philip Bellamy-Lee, BA, (aged 41) Sales Director
Philip Bellamy-Lee joined Bryan Donkin RMG Limited, an established company in
the design , manufacture and supply of gas pressure control and safety
equipment, in 1980 as an apprentice production engineer moving into the sales
area in 1983 and being appointed the Regional Sales Manager in 1992. In March
1996 he joined UGI Meters Limited, which was a subsidiary of Hanson plc, as UK
Business Development Manager. In 1997 he was appointed Sales and Business
Development director responsible for UK and international sales. Following the
acquisition of UGI Meters Limited by Invensys Metering Systems Limited in 2000
he held several positions in the enlarged business until being appointed
Managing Director (UK business) and Sales Director UK and Middle East.
The Proposed Directors will be appointed on Admission.
On 10 February 2006, Alan McKeating entered into a service contract with the
Company, the terms of which are conditional upon Admission, and are to commence
from Admission. He has agreed to act as the managing director of the Company for
remuneration of #88,200 per annum. In addition, the Company has agreed to
contribute an amount equal to 10% of the Executive's salary and an additional
sum of #4,410, being the salary foregone by the Executive, pursuant to the terms
of his service agreement, into a personal pension arrangement. Alan McKeating is
also entitled to a car allowance of #750 per month, private medical insurance
(for himself, his spouse and any dependents under the age of 18), permanent
health insurance, life assurance cover, a mobile telephone, a laptop computer
and the installation of an additional telephone/data line. The appointment is
terminable by 12 months' notice on either side. The agreement contains customary
restrictive covenants. Upon termination, no benefits (other than those accruing
during the notice period) are due to the director.
On 10 February 2006, John Butler entered into a service contract with the
Company, the terms of which are conditional upon Admission, and are to commence
from Admission. He has agreed to act as the finance director of the Company for
remuneration of #75,600 per annum. In addition, the Company has agreed to
contribute an amount equal to 10% of the Executive's salary and an additional
sum of #3,780, being the salary foregone by the Executive, pursuant to the terms
of his service agreement, into a personal pension arrangement. John Butler is
also entitled to private medical insurance (for himself, his spouse and any
dependents under the age of 18), permanent health insurance, life assurance
cover, a mobile telephone, a laptop computer and the installation of an
additional telephone/data line. The appointment is terminable by 12 months'
notice on either side. The agreement contains customary restrictive covenants.
Upon termination, no benefits (other than those accruing during the notice
period) are due to the director.
On 10 February 2006, Philip Bellamy-Lee entered into a service contract with the
Company, the terms of which are conditional upon Admission, and are to commence
from Admission. He has agreed to act as the finance director of the Company for
remuneration of #81,900 per annum. In addition, the Company has agreed to
contribute an amount equal to 10% of the Executive's salary and an additional
sum of #4,095, being the salary foregone by the Executive, pursuant to the terms
of his service agreement, into a personal pension arrangement. Philip
Bellamy-Lee is also entitled to a car allowance of #750 per month, private
medical insurance (for himself, his spouse and any dependents under the age of
18), permanent health insurance, life assurance cover, a mobile telephone, a
laptop computer and the installation of an additional telephone/data line. The
appointment is terminable by 12 months' notice on either side. The agreement
contains customary restrictive covenants. Upon termination, no benefits (other
than those accruing during the notice period) are due to the director.
Warrants
On 30 March 2005 Ricmore issued warrants to subscribe for 2,000,000 Ordinary
Shares at a price of 1p per Ordinary Share at any time until 30 March 2010.
500,000 Warrants were issued to each of John Shaw, Stephen Barclay, Lance
O'Neill and Chatsford Corporate Finance Limited.
On 29 December 2005 Ricmore executed a warrant instrument pursuant to which it
will grant to ICON EAM LLC, conditional on Shareholder approval, Completion and
Admission, the ICON Warrant to subscribe for such number of Ordinary Shares as
are equal to 3 per cent. of the Enlarged Share Capital at a price equal to the
Placing Price at any time until the fifth anniversary of Admission.
On 8 February 2006 the Board resolved to grant to Ruegg, conditional on
Shareholder approval and Admission, the Ruegg Warrant to subscribe for 2,000,000
Ordinary Shares at a price equal to the Placing Price at any time from the first
anniversary of Admission until the fifth anniversary of Admission.
On 8 February 2006 the Board resolved to grant to Hichens, conditional on
Shareholder approval and Admission, the Hichens Warrant to subscribe for
3,000,000 Ordinary Shares at a price equal to the Placing Price at any time from
the first anniversary of Admission until the fifth anniversary of Admission.
Dealing Restrictions
Immediately following Admission, the Directors and Proposed Directors will be
interested in, in aggregate, 100,372,306 Ordinary Shares, representing
approximately 40.67 per cent. of the Enlarged Share Capital. In addition, Robert
Hatton and Gary Rimmer will, immediately following Admission, be interested in,
in aggregate, 18,718,747 Ordinary Shares, representing approximately 7.59 per
cent. of the Enlarged Share Capital. ICON EAM LLC will hold the ICON Warrant.
The Directors, Proposed Directors, Mr Hatton and Mr Rimmer have undertaken to
the Company and Hichens, and ICON EAM LLC has undertaken to the Company and
Ruegg, subject to certain exceptions in accordance with the AIM Rules (including
the ability to accept a take-over offer for the Company and to give an
irrevocable undertaking to accept a take-over offer for the Company), not to
dispose of or transfer any Ordinary Shares in which they are interested for a
period of 12 months from Admission.
In addition, those members of the Concert Party who have not entered into
dealing restrictions as specified above have each undertaken to the Company and
Hichens they will not dispose of any interest in the Ordinary Shares held by
them immediately following Admission for a period of six months from the date of
Admission except with the consent of Hichens or the Company's broker from time
to time (which can be withheld at the absolute discretion of Hichens or the
broker) and in certain other limited circumstances (including the ability to
accept a take-over offer for the Company or give an irrevocable undertaking to
accept the same).
Dividend Policy
The Directors and Proposed Directors intend to commence the payment of dividends
when it becomes commercially prudent to do so, subject to the availability of
sufficient distributable profits.
The City Code on Takeovers and Mergers
The issue of Consideration Shares to the Concert Party and the possible exercise
after Completion of Unapproved Options and/or EMI Options by certain members of
the Concert Party, gives rise to certain considerations under the Takeover Code.
Brief details of the Takeover Code and the protections this affords Shareholders
are described below.
The Takeover Code has not, and does not seek to have, the force of law. It has,
however, been acknowledged by both the UK government and other UK regulatory
authorities that those who seek to take advantage of the facilities of the
securities markets in the UK should conduct themselves in matters relating to
takeovers in accordance with high business standards and so according to the
Takeover Code.
The Takeover Code is issued and administered by the Panel. The Takeover Code
applies to all takeovers and merger transactions, however effected, where the
offeree company is, inter alia, a listed or unlisted public company resident in
the UK, the Channel Islands or the Isle of Man or falls within certain
categories of private limited companies. Ricmore is such a company and its
Shareholders are entitled to the protection afforded by the Takeover Code.
Under Rule 9 of the Takeover Code ("Rule 9"), where any person acquires, whether
by a series of transactions over a period of time or by one specific
transaction, shares which (taken together with shares held or acquired by
persons acting in concert with him) carry 30 per cent. or more of the voting
rights of a company that is subject to the Takeover Code, that person is
normally required by the Panel to make a general offer in cash to the
shareholders of that company to acquire the balance of the equity share capital
of the company at the highest price paid by him or any person acting in concert
with him in the previous 12 months. Similarly, where any person or persons
acting in concert already hold more than 30 per cent., but not more than 50 per
cent., of the voting rights of such a company, a general offer will normally be
required if any further shares are acquired.
Under the Takeover Code, "acting in concert" is defined as follows:
Persons acting in concert comprise persons who, pursuant to an agreement or
understanding (whether formal or informal), actively co-operate, through the
acquisition by any of them of shares in a company, to obtain or consolidate
control (as defined below) of that company.
Under the Takeover Code, "Control" is defined as follows:
Control means a holding, or aggregate holdings, of shares carrying 30% or more
of the voting rights (as defined below) of a company, irrespective of whether
the holding or holdings gives de facto control.
The Concert Party consists of the Vendors of EAL and Chatsford Corporate Finance
Limited, a company in which John Shaw, Stephen Barclay, and Martin Perrin are
shareholders and of which John Shaw and Martin Perrin are directors.
The Concert Party currently hold in aggregate 4,550,000 Ordinary Shares,
representing 20.74 per cent. of the issued ordinary share capital of the
Company. Pursuant to the Acquisition Agreement, the Concert Party will, upon
Completion, be issued in aggregate 141,500,000 Consideration Shares. In addition
to the issue of Consideration Shares to the Concert Party, upon Admission, Alan
McKeating will be granted Unapproved Options over 4,790,834 Ordinary Shares and
EMI Options over 6,666,666 Ordinary Shares, Phillip Bellamy-Lee will be granted
EMI Options over 5,500,000 Ordinary Shares, Robert Hatton will be granted EMI
Options over 5,500,000 Ordinary Shares, John Butler will be granted EMI Options
over 5,500,000 Ordinary Shares and Gary Rimmer will be granted Unapproved
Options over 1,100,000 Ordinary Shares.
In addition, as part of the Placing, Alan McKeating will subscribe for 416,534
Ordinary Shares, Philip Bellamy-Lee will subscribe for 416,533 Ordinary Shares,
Robert Hatton will subscribe for 416,533 Ordinary Shares and John Butler will
subscribe for 416,666 Ordinary Shares.
Set out below is the current interest of each member of the Concert Party in the
Company's share capital as at the date of this document, as it will be
immediately after the issue of the Consideration Shares and shares issued
pursuant to the Placing and as it would be (subject to the assumptions noted
below) immediately after the issue of Ordinary Shares on exercise in full of the
Unapproved Options and the EMI Options held by members of the Concert Party:
Maximum
Shareholding following
Shareholding exercise of all
immediately after Unapproved Options
Current Shareholding Admission and EMI Options*
% of % of % of
No. of Ordinary No. of Ordinary No. of Ordinary
Ordinary Share Ordinary Share Ordinary Share
Shareholder Shares Capital Shares Capital Shares Capital*
Alan McKeating Nil Nil 42,760,561 17.3 54,218,061 19.7
Philip Bellamy-Lee Nil Nil 30,024,965 12.2 35,524,965 12.9
Robert Hatton Nil Nil 11,295,679 4.6 16,795,679 6.1
Gary Rimmer Nil Nil 7,423,068 3.0 8,523,068 3.1
John Butler Nil Nil 4,200,086 1.7 9,700,086 3.5
Stephen Barclay(1)1,600,000 7.3 13,722,357 5.6 13,722,357 5.0
John Shaw(2) 1,000,000 4.6 8,214,337 3.3 8,214,337 3.0
Martin Perrin(3) Nil Nil 1,891,710 0.8 1,891,710 0.7
Arthur Tait Nil Nil 2,724,062 1.1 2,724,062 1.0
Jonathan Feingold Nil Nil 2,724,062 1.1 2,724,062 1.0
Simon Slater Nil Nil 2,118,715 0.9 2,118,715 0.8
Ross Perrin Nil Nil 1,333,333 0.5 1,333,333 0.5
Kirsty Perrin Nil Nil 1,333,333 0.5 1,333,333 0.5
Geoffrey Smith(4) 725,000 3.3 3,391,666 1.4 3,391,666 1.2
Alan Chamberlain 225,000 1.0 1,558,333 0.6 1,558,333 0.6
Peter Kellner Nil Nil 2,666,666 1.1 2,666,666 1.0
Paul Milsom Nil Nil 1,333,333 0.5 1,333,333 0.5
Timothy Hyett Nil Nil 1,333,333 0.5 1,333,333 0.5
Mark Sheppard(5) 1,000,000 4.6 5,000,000 2.0 5,000,000 1.8
William Weller Nil Nil 893,333 0.4 893,333 0.3
Leo Knifton Nil Nil 886,667 0.4 886,667 0.3
Stephen Oakes Nil Nil 886,667 0.4 886,667 0.3
Chatsford Corporate
Finance Limited Nil Nil Nil Nil Nil Nil
Total 4,550,000 20.7 147,716,266 59.9% 176,773,766 64.1%
* On the assumption that the members of the Concert Party who hold Unapproved
Options and EMI Options exercise all of the Unapproved Options and EMI Options
held by them in full at the earliest opportunity (being the date of publication
of the audited accounts of the Company to 31 December 2007), that none of the
Warrants, EMI Options held by parties other than the Concert Party or the ICON
Warrant, Ruegg Warrant or Hichens Warrant are exercised and that there have been
no intervening issues of Ordinary Shares prior to the date of exercise. The
Unapproved Options and the EMI Options granted to members of the Concert Party
have identical performance conditions.
(1) 600,000 of the Ordinary Shares in which Stephen Barclay is currently
beneficially interested are registered in the name of Hargreave Hale Nominees
Limited.
(2) 900,000 of the Ordinary Shares in which John Shaw is currently beneficially
interested are registered in the name of Rock (Nominees) Limited on behalf of
his pension fund.
(3) All of the Ordinary Shares in which Martin Perrin is beneficially interested
following Admission will be registered in the name of Fiske Nominees Limited.
(4) 725,000 of the Ordinary Shares in which Geoffrey Smith is currently
beneficially interested are registered in the name of Pershing Keen Nominees
Limited on behalf of CGGS Pension Fund.
(5) 1,000,000 of the Ordinary Shares in which Mark Sheppard is beneficially
interested are registered in the name of Pershing Keen Nominees Limited on
behalf of Midas Nominees Limited.
Immediately following Completion, the Concert Party will hold in aggregate
147,716,266 Ordinary Shares, representing 59.9 per cent. of the issued ordinary
share capital of the Company.
If the Unapproved Options and EMI Options are exercised by the members of the
Concert Party in accordance with their terms (and subject to the assumptions set
out in the notes above), the Concert Party will hold a maximum of 176,773,766
Ordinary Shares, representing a maximum of 64.1 per cent. of the issued ordinary
share capital of the Company.
Shareholders should note that John Shaw, Stephen Barclay and Chatsford Corporate
Finance Limited each currently holds 500,000 Warrants, with each Warrant
convertible into one Ordinary Share.
Shareholders should be aware that members of the Concert Party may, for so long
as they between them hold over 50 per cent. of the voting rights of the Company
and for so long as they continue to be treated as acting in concert, increase
their aggregate shareholding at a later date (including by the exercise of
Warrants described above) without incurring any further obligation under Rule 9
to make a general offer, although individual members of the Concert Party will
not be able to increase their percentage shareholding through a Rule 9 threshold
without Panel consent.
Unless the Waiver is approved by Independent Shareholders, the issue to members
of the Concert Party of Consideration Shares would give rise to an obligation on
the Concert Party to make a general offer to all Shareholders under Rule 9 of
the Takeover Code.
The Independent Director believes that it is appropriate for the Company to
carry out the Acquisition and the Placing, to issue Consideration Shares to
members of the Concert Party and to grant the Unapproved Options and EMI Options
to members of the Concert Party. However, the Independent Director would not be
prepared to approve the Acquisition or the Placing in circumstances which would
lead to the Concert Party or any member of it becoming obliged to make a general
offer to acquire all of the Ordinary Shares not held by the Concert Party or
such member. The members of the Concert Party are only prepared to enter into
the Acquisition Agreement as Vendors on the basis that they will not be obliged
to make such an offer on issue of the Consideration Shares, the issue to Alan
McKeating, Philip Bellamy-Lee, Robert Hatton and John Butler (members of the
Concert Party) of 416,534, 416,533, 416,533 and 416,666 Ordinary Shares
respectively pursuant to the Placing or on the exercise by them of the
Unapproved Options and EMI Options to be granted to them on Admission. It is for
this reason that the Independent Director has decided to seek the Waiver from
the Panel from the obligation on the Concert Party (or any member of it) to make
a general offer under Rule 9 as a result of the issue to them of Consideration
Shares, the issue to Alan McKeating, Philip Bellamy-Lee, Robert Hatton and John
Butler (members of the Concert Party) of 416,534, 416,533, 416,533 and 416,666
Ordinary Shares respectively pursuant to the Placing or the exercise by them of
the Unapproved Options and EMI Options to be granted to them on Admission.
The Panel has agreed, subject to the Waiver Resolution being passed on a poll by
the Independent Shareholders, to grant the Waiver. For the avoidance of doubt,
the Waiver applies only in respect of increases in the holding of Ordinary
Shares of the Concert Party and members of the Concert Party resulting solely
from the issue to them of Consideration Shares, the issue to Alan McKeating,
Philip Bellamy-Lee, Robert Hatton and John Butler (members of the Concert Party)
of 416,534, 416,533, 416,533 and 416,666 Ordinary Shares respectively pursuant
to the Placing or the exercise by them of the Unapproved Options and EMI Options
to be granted to them on Admission.
The Waiver is conditional upon the Waiver Resolution being approved by the
Independent Shareholders voting on a poll at the EGM.
Intentions of the Concert Party
Save for the appointment of the Proposed Directors on Admission, no member of
the Concert Party is proposing any changes to the board of directors of the
Company and the members of the Concert Party have confirmed their intention
that, following any percentage increase in their holdings of Ordinary Shares as
a result of the issue to them of the Consideration Shares, the issue to Alan
McKeating, Philip Bellamy-Lee, Robert Hatton and John Butler (members of the
Concert Party) of 416,534, 416,533, 416,533 and 416,666 Ordinary Shares
respectively pursuant to the Placing or any Ordinary Shares on exercise of the
Unapproved Options and EMI Options held by them, the business of the Company
would be allowed to continue in substantially the same manner, with no major
changes. The members of the Concert Party have also confirmed that the existing
employment rights, including pension rights (where relevant), of all employees
of the Enlarged Group would be maintained.
The Placing
The Company has conditionally placed a total of 83,333,333 Placing Shares at the
Placing Price, to raise GBP1,250,000, before expenses of approximately
GBP394,500, for the Company. The Placing is conditional, inter alia, upon:
(a) the passing of the Resolutions;
(b) the Placing Agreement becoming unconditional (save for Admission) and not
having been terminated in accordance with its terms prior to Admission; and
(c) Admission having become effective on or before 8.00 a.m. on 13 March 2006
(or such later date as Ruegg, Hichens and the Company may agree, not being later
than 28 April 2006).
The Placing is not being underwritten in whole or in part by Hichens or any
other party.
The Placing Shares will represent 33.77 per cent. of the Enlarged Share Capital
and will, when issued, rank pari passu in all respects with the other Ordinary
Shares then in issue, including all rights to all dividends and other
distributions declared, made or paid following Admission.
The Company has received provisional confirmation from HMRC that the Placing
Shares may be included in a VCT's 'qualifying holdings' and will be regarded as
eligible shares in a qualifying company for EIS purposes.
Application will be made for the Enlarged Share Capital to be admitted to
trading on AIM. It is expected that trading in the Enlarged Share Capital will
commence on 13 March 2006.
Corporate Governance
The Directors and Proposed Directors recognise the importance of sound corporate
governance and intend to observe the requirements of the Code of Best Practice,
as published by the Committee on Corporate Governance (commonly known as the
"Combined Code") to the extent they consider appropriate in light of the
Company's size, stage of development and financial resources.
The Company has established, with effect from Admission, an audit committee and
a remuneration committee. The members of the audit committee and the
remuneration committee will be the non-executive directors of the Company from
time to time. On Admission, the members of each of the audit committee and
remuneration committee will be Lance O'Neill, John Shaw and Stephen Barclay,
with Stephen Barclay chairing the remuneration committee and John Shaw chairing
the audit committee.
CREST
CREST is a paperless settlement procedure enabling securities to be evidenced
otherwise than by a certificate and transferred otherwise than by written
instrument. The Company's Articles of Association contain certain provisions
concerning the transfer of shares which are consistent with the transfer of
shares in dematerialised form in CREST under the CREST Regulations. The existing
Ordinary Shares are currently enabled for settlement through CREST. Accordingly,
settlement of transactions in the Ordinary Shares following Admission may take
place within the CREST system if relevant Shareholders so wish. CREST is a
voluntary system and holders of Ordinary Shares who wish to receive and retain
share certificates will be able to do so.
Extraordinary General Meeting
Set out at the end of this document is a notice convening the Extraordinary
General Meeting of the Company to be held at the offices of Memery Crystal, 44
Southampton Buildings, London WC2A 1AP at 3.00 p.m. on 9March 2006 at which the
following resolutions will be proposed:
* Resolution 1 is an ordinary resolution to approve the Acquisition for the
purposes of the AIM Rules;
* Resolution 2 is an ordinary resolution to approve the Acquisition for the
purposes of s.320 of the Act;
* Resolution 3 is an ordinary resolution to approve the waiver of the obligation
under Rule 9 of the Takeover Code by the Panel in respect of the issue of the
Consideration Shares to members of the Concert Party, the issue to Alan
McKeating, Philip Bellamy-Lee, Robert Hatton and John Butler (members of the
Concert Party) of 416,534, 416,533, 416,533 and 416,666 Ordinary Shares
respectively pursuant to the Placing or the exercise of Unapproved Options and
EMI Options held by certain members of the Concert Party;
* Resolution 4 is an ordinary resolution to authorise the Directors under
section 80 of the Act to issue Ordinary Shares up to a limit of the authorised
but unissued share capital of the Company;
* Resolution 5 is a special resolution to authorise the Directors to issue the
Placing Shares, the Unapproved Options, the Ruegg Warrant, the ICON Warrant, the
Hichens Warrant and Ordinary Shares up to a maximum nominal value of GBP1
million (representing approximately 40.52% of the Enlarged Share Capital),
otherwise than on a pre-emptive basis; and
* Resolution 6 is a special resolution to change the name of the Company to
"Energy Asset Management Plc".
Resolution 3 will be voted on by a poll of Independent Shareholders.
The attention of Shareholders is also drawn to the voting intentions of the
Independent Director set out below.
Recommendation
John Shaw and Stephen Barclay are Directors and hold shares in EAL and are
members of the Concert Party and will not be voting on any of the Resolutions.
In addition, they have not taken any part in the consideration by the Board of
the Acquisition.
Lance O'Neill, the Independent Director, having been so advised by Ruegg,
believes that the proposed Acquisition is in the best interests of the Company
and its Shareholders. In addition, in his opinion, having consulted with Ruegg,
the Company's nominated adviser, the terms of the Acquisition Agreement are fair
and reasonable so far as Shareholders are concerned. Consequently the
Independent Director recommends that Shareholders vote in favour of Resolution 1
to be proposed at the EGM. In providing advice to the Independent Director,
Ruegg has taken into account the Independent Director's commercial assessments.
In addition, Lance O'Neill, who has been so advised by Ruegg, considers that
Resolution 3, which approves the Waiver by the Panel of the requirement under
Rule 9 of the City Code for any member of the Concert Party to make a general
offer for all of the issued Ordinary Shares following receipt of Consideration
Shares, the issue to Alan McKeating, Philip Bellamy-Lee, Robert Hatton and John
Butler (members of the Concert Party) of 416,534, 416,533, 416,533 and 416,666
Ordinary Shares respectively pursuant to the Placing or any Ordinary Shares
issued on exercise of Unapproved Options or EMI Options held by them is in the
best interests of Independent Shareholders and is fair and reasonable so far as
the Independent Shareholders are concerned. Consequently, the Independent
Director recommends that Independent Shareholders vote in favour of Resolution 3
to be proposed at the EGM.
None of the members of the Concert Party will vote at the EGM on any of the
Resolutions. In providing advice to the Independent Director, Ruegg has taken
into account the Independent Director's commercial assessments.
Lance O'Neill has irrevocably undertaken to vote in favour of all of the
Resolutions in respect of his beneficial shareholding in 1,450,000 Ordinary
Shares representing 6.6 per cent. of the Existing Ordinary Shares.
INFORMATION ON EAL
Introduction
EAL was formed to take advantage of regulatory changes made by OFGEM within the
gas and electricity industry, particularly with regard to industrial and
commercial gas meter asset management. The Directors and Proposed Directors
believe that these regulatory changes provide the basis and opportunity to
establish a new long term sustainable business.
As at the date of this announcement EAL has incurred historic losses and is
currently loss-making.
Participants in the energy metering sector must gain formal accreditation by the
industry regulator, OFGEM. This accreditation is designed to ensure a consistent
approach with regards to health and safety, operative skills, use of
industry-approved products and the adoption of a common IT infrastructure to
communicate with industry participants. EAL has been successful in gaining
formal accreditation by OFGEM as a registered Meter Asset Manager. This
accreditation has allowed EAL to further develop its business prospects and
secure debt funding to develop the business.
EAL's specific target areas of business are industrial and commercial metering,
datalogging (remote meter reading) and the supply of electricity meters. EAL has
focused on these areas to differentiate itself as a key service provider. The
target is to achieve within five years a market share of approximately 50,000
specialist industrial and commercial gas meters, approximately 45,000
dataloggers and approximately 50,000 electricity meters by demonstrating
consistently high levels of service and customer satisfaction to current and
potential customers.
Background and Perceived Opportunity
The Directors and Proposed Directors believe that the introduction of
competition and liberalisation of the energy metering industry offers an
opportunity for suitably skilled and qualified new entrants to progress in this
market. OFGEM has been actively involved during the last 10 years in encouraging
competition and customer value in the energy sector. OFGEM's focus in the early
stages was in the gas transportation (underground pipelines) sector of the
industry. The introduction of competition in this area is expected to result in
a financial benefit to the consumer and to lead to the creation of several new
entrants in the market.
This same process is now being applied by OFGEM to the metering sector of the
industry and the Directors and Proposed Directors anticipate that the results
will follow a similar pattern as those achieved by the liberalization of the gas
transportation sector. They anticipate that there will be a benefit to consumers
and that several new innovative companies will seek to build long-term
sustainable asset businesses provided that they can differentiate themselves and
provide a customer focussed service. Already, approximately 30% of the UK
domestic metering business has been divested to two large Meter Asset Managers
(Siemens Metering and United Utilities).
Prior to the recent deregulation, Independent Gas Suppliers had no choice as to
the provider of MAM services. The Directors and Proposed Directors believe that
medium-sized and smaller suppliers, supported by OFGEM, want to see more
effective competition in the industrial and commercial MAM sector, and this
should enable companies such as EAL to enter this sector.
An Independent Gas Suppliers' criteria for selecting a MAM would include
ensuring that its MAM will provide an efficient service for its gas users from
the moment a new enquiry is taken through to installation and thereafter to
include all planned maintenance.
Gas Meter Asset Management - Existing and Proposed Contracts
Current industry structure is that an independent energy supplier will contract
(exclusively or non-exclusively) with a MAM to provide industrial and commercial
metering services on behalf of its consumers. However, this does not preclude a
consumer from appointing a MAM of their choice.
EAL intends to enter into contracts with independent energy suppliers for the
provision and management of meters provided to their consumers. The fee to EAL
payable by the independent energy supplier for managing a meter does not vary
with usage, as even if a consumer fails to pay the supplier for their supply,
the supplier is still obliged to pay the fee to the MAM for as long as the
supply is made.
EAL has entered into 10-year contracts with two Independent Gas Suppliers for
the management of their meters, establishing EAL as a supplier of MAM services
for current installed meters (circa 3,000 meters) and potentially for future new
clients, and as data collection provider over the same 10-year period.EAL is
also currently targeting a number of additional Independent Gas Suppliers and
customer groups including certain local authorities and large commercial chains.
Under the terms of these contracts EAL provides its clients with:
* technical support, planning, design and operations;
* implementation and management of dedicated supply chain;
* customer relationship management;
* regulatory and legislative support; and
* IT and back office infrastructure as required by OFGEM of an approved MAM
company. This area of information technology and back office infrastructure has
been a key part of EAL successfully gaining full approval by OFGEM as a MAM
company.
EAL's operational structure has been designed to be implemented in a format that
will support an Independent Gas Supplier's acquisition of new consumers. EAL
will be advised of the consumers' energy requirements (along with any specialist
process requirements) by the independent gas supplier. EAL will then design the
metering installation to accommodate these requirements. EALwill arrange to
purchase the required materials from its approved suppliers and organise for one
of its approved sub-contractors to install the meter at the consumer's premises.
On completion of the metering installation all critical component details will
be entered into EAL's RGMA IT system. The system subsequently manages the
critical data and ensures that all interested parties are made aware of the new
installation and that the appropriate maintenance schedules are recorded and
implemented for future reference.
EAL has in place purchasing arrangements with several of the industry's material
and component manufacturers. These manufacturers provide products in line with
current industry specifications. Typically the supply contracts are fixed for a
period of 12 months, although EAL expects to enter into longer term contracts as
its business develops.
EAL's identified sub-contractors are all approved to OFGEM's standard of
accreditation for approved meter installers.EAL can choose from any one of these
contractors to suit its business requirements and level of expertise required.
The funding required to purchase and install the metering equipment has been
secured. The rental charged to the independent gas supplier by EAL for providing
this equipment will fund the financing repayments and also contribute towards
ongoing maintenance and repairs. The rental charges are fixed for the duration
of the contract save for the application of an annual index linked review.
Electricity meters
EAL has also been appointed as meter supplier to an established independent
electricity supplier to implement a service that will enable UK companies to
address one of the energy industry's main customer service complaints -
"estimated billing". Many consumers, regardless of size or industry, do not know
how much energy they are using and when they are using it. These uncertainties
are caused by inaccurate, infrequent meter readings, often based on poor
estimated information. The "estimated billing" service will offer an advanced
metering package for SME electricity consumers at a price which the Directors
and proposed Directors believe will be attractive. The Carbon Trust estimates
that businesses which take full advantage of a service like this could
effectively manage energy consumption and reduce their total utility costs by as
much as 25%.
This offer to SMEs is an effective alternative to fixed communications-line
metering. Previously this was more expensive and therefore not economic for
small to medium sized businesses. This new service utilises GSM technology to
send readings to a central call centre where they will be collated and processed
and offering the benefits of fixed communications-line metering at a reduced
cost. Companies switching to the new service will receive a new 'Smart Meter'
provided by EAL, in place of their current electricity meter. The Smart Meter is
programmed to read 'real time' consumption data using GSM enabled data retrieval
software thereby ensuring highly accurate energy consumption monitoring.
Dataloggers
Rising energy costs should provide businesses with an incentive to have accurate
data on how much gas is being consumed and when. Currently there are
uncertainties caused by inaccurate, infrequent meter readings, often based on
poor estimated information.
EAL intends to offer a one stop solution for the provision of energy metering
equipment and meter reading services and the provision of real time gas
consumption information with the use of dataloggers. EAL also intends to offer a
fully managed end-to-end service from a single point of contact removing the
issues and complexities of the energy market ultimately providing additional
consumer value.
Dataloggers are designed to enable customers to promptly receive accurate energy
usage data. Energy consumption records should allow consumers to improve
forecasting and control of their energy budget and the costs of reconciliations
should be removed because bills will be actual and not estimated.
It is intended that customers will be able to view site-specific energy profiles
through a dedicated web portal and use the information to identify whether there
are opportunities for tariff switching to reduce costs. This should also allow
customers to benchmark energy consumption across their estate and identify
exceptional usage patterns. The Directors and Proposed Directors believe that
the energy supplier should also benefit from a faster billing cycle because
meter reading is real-time, with fewer customer disputes arising from inaccurate
or estimated readings, and that this should deliver cash-flow and cost-to-serve
benefits. The data should also improve their ability to forecast demand.
Industrial and commercial meters require greater expertise in relation to their
installation and maintenance in comparison to domestic meters, and the Directors
and Proposed Directors consider that this is an area of the market that is not
yet being adequately served. Users of industrial and commercial meters can only
deal with MAMs with the appropriate levels of accreditation specifically
covering industrial and commercial meters. The Directors and Proposed Directors
consider that the management of EAL are able to demonstrate the technical,
operational, commercial, contract management and financial skills required to
develop the business within the industrial and commercial sector.
Management
The management team of EAL have long-standing and specialised experience
complementing EAL's proposed areas of business. Each of the Proposed Directors,
Robert Hatton and Russell Gibson have been actively involved in this business
sector for a minimum of 20 years, with a range of skill sets from design and
implementation of many supply chain solutions for the multi-utility sector,
through to installation and operation.
As well as the Proposed Directors senior staff of EAL include:
Gary Rimmer, (aged 46) Commercial Director of EAL
Gary Rimmer joined Lloyds Bank Plc in 1976 and was appointed a manager in 1986
as part of a London-based team specialising in lending to major corporates in
the insurance sector and subsequently in the property and motor sectors where he
marketed structured loan facilities and worked on merger and acquisition
transactions. He subsequently held several managerial appointments mainly
advising and marketing to middle market corporates, until 1996 when he was
appointed Senior Group Manager, Southend Group where he was responsible for ten
retail banking branches. He left Lloyds TSB Bank Plc in May 1998 to become
Commercial Director of Proton Textiles Group Limited where he helped to grow,
reorganise and relocate the group before leaving in March 2000 to undertake
consultancy work before joining The Business Exchange plc in May 2001, where he
was in charge of fundraising services. In April 2004 he formed Active Corporate
Finance Limited to undertake corporate finance related consultancy work. Gary's
role will be part time on the basis of one day per week.
Robert Hatton, (aged 51) - Business Development Director of EAL
Robert Hatton has over 30 years experience in the UK Utility Sector. He started
his career in the electricity supply industry as a contracts engineer in 1975
with Midlands Electricity Board and became an Electrical Contracts Manager with
Eastern Electricity Board in 1984. He was appointed Contracts Manager for
Guernsey Electricity in 1990 responsible for some fifty members of staff engaged
on large electricity distribution projects both in the main power station
complex and on the local electricity supply networks. He progressed into energy
sales and marketing in 1993 and was responsible for maintaining and developing
relationships with major accounts as a national account manager with Scottish
Power. In 1996 he joined Independent Energy, again as a national account manager
and since leaving the company in 2001 he has undertaken a number of business
development roles mainly within the utilities sector and has specialised in
utility metering and the introduction of new meter reading technologies.
Russell Gibson, (aged 41) - National Operations Manager
Russell Gibson has 20 years operational experience, and was most recently a
Contracts Solutions Manager with Advantica responsible for delivering Gas
Training for National Grid Transco Employees. Before joining Advantica he was
General Manager with Utilise a training solutions company, again designing and
delivering training solutions for utility sector contractors in order that they
comply with new standards and accreditation requirements. He was also
responsible for developing and implementing new UK training standards for meter
installations. Prior to that he oversaw customer training needs for Fusion
Provida, the sales, marketing and distribution arm of the gas specialist Fusion
Group. Between 1983 and 1996 Russell held a number of operational positions
within British Gas on Specialist Pipeline and Metering activities.
Environmental impact
Energywatch, the gas and electricity watchdog, is backing a move by the European
Parliament to force energy companies to provide accurate and detailed bills and
give consumers the information they need to regulate and monitor their energy
consumption. They believe that, as governments across Europe promote
sustainability in the generation and use of energy, it is essential that
consumers are provided with the information they need to act in their own
interests and to play their part in reducing their energy consumption, and that
the ability of consumers to assess their consumption patterns and the impact
these have, both on the environment and the price they pay for energy, is
fundamental in encouraging change in patterns of use and in investment in energy
efficiency measures.
Competition
At present in the industrial and commercial meter market Transco is being
actively encouraged by OFGEM to support the introduction of competition. EAL's
strategy is to approach Independent Gas Suppliers and key customer groups that
wish to appoint a new MAM and are willing to provide a long-term contractual
commitment. The perceived benefit to gas suppliers is that EAL intends to be in
a position to facilitate the early installation of dataloggers. These should
provide suppliers and their customers with regular and accurate meter readings
to allow suppliers and users to better manage energy supply and spend.
Appointment of Hichens Harrison & Co. plc
Hichens Harrison & Co plc have today been appointed as the Company's broker for
the purposes of the transaction and will continue to act as broker following
Admission.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Publication date of the admission document 13 February 2006
Latest time and date for receipt of completed Forms of Proxy
for the EGM 3.00p.m. on 7 March 2006
Extraordinary General Meeting 3.00p.m. on 9 March 2006
Completion of the Acquisition 13 March 2006
Admission effective and expected commencement of dealings on AIM 13 March 2006
Delivery into CREST of the New Ordinary Shares to be held
in uncertificated form 13 March 2006
Despatch of definitive share certificates in respect
of the New Ordinary Shares to be held in certificated form 20 March 2006
ACQUISITION AND PLACING STATISTICS
Consideration Shares to be issued 141,500,000
Placing Shares to be issued 83,333,333
Total Number of New Ordinary Shares to be issued 224,833,333
Placing Price 1.5p
Number of Ordinary Shares in issue immediately following
completion of the Acquisition and the Placing 246,768,383
Percentage of Enlarged Share Capital represented by
the Consideration Shares 57.34%
Percentage of Enlarged Share Capital represented by
the Placing Shares 33.77%
Market capitalisation of the Company at the Placing Price
on Admission GBP3,701,526
Existing Ordinary Shares as a percentage of the Enlarged Share Capital 8.9%
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCGGGMZRZFGVZM
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