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IPSA - IPSA Group Plc - Correction re Warrants

Release Date: 28/02/2011 09:58
Code(s): IPS
Wrap Text

IPSA - IPSA Group Plc - Correction re Warrants IPSA GROUP PLC (Incorporated and registered in England and Wales) (Registration Number 5496202) AIM Share Code IPSA ISIN GB00B0CJ3F01 JSE Share Code IPS ISIN GB00B0CJ3F01 ("IPSA" or "the company") Correction re Warrants Further to the announcement released on 25th February in respect of the placing to raise GBP1 million, the reference to warrants which were previously issued to certain loan note holders should have referred to warrants over 6,500,000 ordinary shares rather than warrants over 8,125,000 ordinary shares. All of the other information remains unchanged. The correct announcement should read as follows: Placing of 12.5 million new Ordinary Shares at 8 pence to raise GBP1 million to fund the start-up of the Newcastle Cogeneration Plant and working capital IPSA GROUP PLC (AIM:IPSA), the developer, owner and operator of power generation capacity in Southern Africa, announces that it has today placed a total of 12.5 million new ordinary shares of 2 pence each ("the Placing Shares") at a price of 8 pence per share to raise GBP1 million before expenses ("the Placing"). The Placing The Placing Shares have been allotted subject only to admission to trading on AIM ("Admission"). Application will be made for the Placing shares to be admitted to trading on AIM, with Admission expected to take place on 3rd March 2011. The Placing Shares will in aggregate represent just over 11.6 percent of the enlarged share capital of IPSA. The total enlarged issued share capital of IPSA following Admission will be 107,504,081 ordinary Shares (the "Enlarged Issued Share Capital"). The above figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Disclosure and Transparency Rules. The Placing Shares have been placed with certain existing shareholders. Subscribers to the Placing include Sterling Trust Limited, which will subscribe for 10 million Placing shares at the Placing price. As a result, under the AIM Rules for Companies, the Placing is deemed to be a related party transaction. The independent directors of the Company consider, having consulted with the Company`s Nominated Adviser, Execution Noble & Company Limited, that the terms of Placing are fair and reasonable insofar as shareholders of the Company are concerned. The net proceeds of the fundraising will not provide the Company with sufficient working capital to satisfy its total medium and long term requirements, without the refinancing of the Company`s loans to its subsidiary, Newcastle Cogeneration Pty. Limited ("NewCogen"), the sale of the four Turbines to repay the Standard Bank loan and other trade creditors or the extension of the repayment period in respect of the loan notes, therefore as previously announced working capital remains extremely tight. An announcement will be made at the appropriate time if there is any further change in the financial condition of the Group. Plan to commence operations at NewCogen With the funding raised in the Placing, IPSA is planning on restarting the Newcastle cogeneration plant in March following final agreement on a gas supply contract with Spring Lights Gas (Pty.) Limited. Funds from the Placing will be used to provide the required security and deal with certain trade creditors of NewCogen and provide NewCogen with working capital over the start- up period. With the gas agreement in place, NewCogen will be in a position to commence sales of electricity to Eskom under the medium term power purchase agreement dated 26th August 2010. Working Capital The bulk of the funds will be used to provide the group with working capital to re-commence operations at the cogeneration plant at Newcastle KwaZuluNatal, South Africa. On 6th December 2010, the Company announced that Sasol Gas Limited ("Sasol Gas"), which is the monopoly gas-producer and primary supplier of gas in South Africa, has commenced legal action against NewCogen, for sums claimed under the gas supply agreement terminated in August 2009 amounting to approximately GBP4 million. To date no further action has been taken. Outstanding debt, accrued interest and other creditors of the Group currently amount to approximately GBP37 million, with the bulk of funds owed by the Company. Approximately GBP31 million of the total outstanding debt was subject to a standstill agreement with Standard Bank PLC and Turbocare SpA following execution of an agreement on 5th March 2010, which expired on 21st February 2011. The Company is in discussions with the bank and Turbocare regarding repayment timescales for these amounts. Change to terms of IPSA Warrants Further to the announcement on 9th March 2010 in connection with warrants issued to certain loan note holders (the "Warrants"), as a result of the Placing any shares issued under the Warrants will now be issued at 8p per share. Accordingly, Warrants for the issue of a total of 6,500,000 ordinary shares are outstanding and are exercisable at any time until 31st October 2013. Richard Linnell, Chairman comments: "We were very pleased indeed to have reached terms with our new gas provider Spring Lights, and now as a result of this support of our shareholders we expect to be in a position to commence operations within the coming weeks." For further information contact: Peter Earl, CEO, IPSA Group PLC +44 (0)20 7793 5615 John Llewellyn-Lloyd / Harry Stockdale, Execution Noble & Company Ltd +44 (0)20 7456 9191 Riaan van Heerden,PSG Capital (Pty) Ltd +27 (0)21 887 9602 London 28 February 2011 Date: 28/02/2011 09:58:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. 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