IPSA Group plc - Update re Loan Notes and Turbine Sale Process

      
IPSA GROUP PLC
(Incorporated and registered in England and Wales)
(Registration Number 5496202)
AIM Share Code IPSA   ISIN GB00BOCJ3F01
JSE Share Code IPS    ISIN GB00BOCJ3F01
("IPSA" or "the company")

Update re Loan Notes and Turbine Sale Process

Loan Notes

IPSA Group PLC has been notified that Sterling Trust Limited (Sterling Trust) has acquired GBP350,000 of the loan notes which IPSA issued on 5 March 2010 (the Loan Notes).  In addition, Sterling Trust has acquired warrants to subscribe for 2,500,000 new shares of the Company, which were issued on the same date as the Loan Notes. 


The exercise price of the warrants is now 5p per share, in accordance with terms agreed at the time of issue in 2010.


IPSA is not a party to this Loan Note transfer as the Loan Notes were freely transferable in accordance with their terms of issue.  However, as the Loan Notes were due for redemption in 2011, the Company expects to enter into discussions with Sterling Trust and the other Loan Note holders in relation to extending the Loan Notes on new terms.


At the same time, the Company hopes to agree terms with Sterling Trust with a view to providing Newcastle Cogeneration Pty. Limited, IPSA's wholly-owned operation in Newcastle, KwaZulu Natal, with further interim financing for working capital purposes.  The primary use of these new funds will be to satisfy a proposed settlement with Sasol Gas Limited in relation to the gas supply agreement which was terminated in August 2009.

Turbine Sale Process

Further to the announcement on 2 May 2012, IPSA announces a further delay in completion of the sale contract with Lezayre Holdings Limited ("Lezayre"), the prospective purchaser of the Companys remaining two turbines.A  A  Lezayre has re-iterated its intention to complete the purchase as soon as possible.  Notwithstanding this, the Company is also in discussions with alternative buyers with a view to completing the sale of the turbines during July. 


Working Capital

The Company confirms that its working capital position remains extremely tight.  Further to the announcement on 2 May 2012, the Companys principal creditors, Standard Bank plc and TurboCare SpA, continue to withhold their approval of a formal extension of the turbine sale and purchase contract with Lezayre.  Without the continued support of all its creditors, additional working capital would be required by the Company in order to settle overdue indebtedness prior to completion of the sale of the remaining two turbines.

London
9 July 2012

For further information contact: 
A 
Phil Metcalf, CEO, 
IPSA Group PLC

+44 (0)20 7793 5615
A 
A 
John Llewellyn-Lloyd / Harry Stockdale, 
Execution Noble & Company Ltd

James Joyce / Harry Ansell 

+44 (0)20 7456 9191
A 

+44(0)20 7220 1666
W H Ireland Ltd

Riaan van Heerden,
PSG Capital (Pty) Ltd


+27 (0)21 887 9602



Date: 09/07/2012 04:30:00 Supplied by www.sharenet.co.za                     
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