Eqtec Regulatory News (EQT)

Press Release 27 November 2015

REACT Energy plc

("REACT" or the "Company")

Final Results and Notice of AGM

REACT, the renewable energy developer and operator focusing on the production of clean energy in the UK and Ireland, today announces its audited final results for the year ended 30 June 2015. 

The Annual Report is available for viewing on the Company's website www.reactenergyplc.com.

REACT also announces that the Annual General Meeting of the Company will be held at the Cork International Airport Hotel, Cork, on 18 December 2015 at 11.00 a.m.

The Notice of the AGM is being posted to shareholders today and copies are available on the Company's website www.reactenergyplc.com.

For further information:

About REACT:

REACT Energy plc is committed to operating clean electricity and heat generation plants in the UK and Ireland. The Company seeks to identify, build, own and operate renewable projects and possesses significant knowledge of energy markets, clean technologies, fuel sources, project development, project finance and project delivery. REACT currently has four operational clean energy plants generating revenue from the sale of electricity and heat. The generation of clean electricity and heat from sustainable sources has the potential to address the key energy challenges of energy security and carbon commitment and provide strong returns on capital employed.

The Company is quoted on AIM and trades as REAC. Further information on the Company can be found at www.reactenergyplc.com.

REACT Energy plc

Chairman and Chief Executive's Report

On 27 July 2015, the Group announced the restoration of its shares to trading on AIM following the successful exit of the Company from an examinership process (the procedure under Irish Law introduced to provide a mechanism for the rescue and return to health of ailing, but potentially viable, companies) (the "Examinership"). Part of the successful exit was the raising of £1.0 million (before expenses) by way of a secured loan facility issued to EcoFinance GLI Limited ("EcoFinance") (the "Secured Loan Facility" or "SLF"), details of which were included in an announcement made by the Group on 15 July 2015 and is set out below.

The Company's shares were suspended from trading on AIM from 1 December 2014 at the Company's request pending a clarification of the Group's financial position. On 13 May 2015 the Group announced that it had made a petition pursuant to the Irish Companies Acts to the High Court (the "High Court") in Ireland to appoint an Examiner to the Company. An Examiner was appointed by the Court on 20 May 2015.

The decision to seek Examinership followed the suspension of funding discussions with a strategic investor which resulted from a dispute with the landlord on the Group's Enfield site, related difficulties in financing the repowering of the Group's Newry site and actions taken by certain creditors of REACT and related companies.

An Independent Accountants Report from Grant Thornton on REACT and related companies concluded that it was possible for a sustainable and profitable business to emerge from the Examinership process, based on a restructuring of REACT and related companies. Altair Group Investment Limited ("Altair"), an existing loan note holder at that time, supported REACT throughout the Examinership process, and together with a third party strategic investor, indicated that they would be prepared to invest in REACT to facilitate a scheme of arrangement for the restructured business. REACT also announced that as part of the Examinership process it had issued a loan note to Altair for up to €500,000, the proceeds of which were used to fund the Examinership process. The High Court approved the Scheme of Arrangement on 14 July 2015 which was followed by the exit of the Company from the Examinership process on 25 July 2015. The Company announced on the 15 July 2015 that it had raised £1.0 million (before expenses) by way of the SLF issued to EcoFinance to fund the Company's on-going working capital requirements (further details on which are below). 

Following the approval of the Scheme of Arrangement required as part of the Examinership process, creditors were issued with, in aggregate, 37,470,972 new ordinary shares of €0.01 each in the capital of the Company (the "Ordinary Shares") at a price of £0.11 each (being the closing price of an Ordinary Share on the 1 December 2014, the date of suspension of the Ordinary Shares from AIM), which after issue amounted to approximately 55% of the then enlarged issued share capital. This was as a result of the conversion of €5.7 million of debt into equity. The 37,470,972 new Ordinary Shares were issued to the relevant creditors and are held by a trustee on their behalf. The trustee has entered into a 'lock-in' restriction on behalf of the creditors, whereby they are unable to dispose of the new Ordinary Shares that were received pursuant to the Scheme for a period of one year from the date of admission, being 31 July 2015.

The Group had been actively engaged in discussions with potential providers of finance including with EcoFinance, a Group which sources finance for renewable energy projects. As announced on 8 June 2015, the Group signed a conditional facility letter for the Secured Loan Facility with EcoFinance, the drawdown of which was subject to certain conditions precedent being met under the Secured Loan Facility, the Scheme being approved by shareholders and creditors and ultimately the High Court. EcoFinance is a privately owned company registered in England. It was incorporated in May 2015 as a special purpose entity specifically for the purposes of entering into the proposed REACT transaction. It enjoys relationships with a number of co-investment partners both in the UK and globally. The Secured Loan Facility comprises a five-year term loan of £1,000,000 at 15% per annum fixed rate of interest, payable monthly in arrears. The net proceeds of the Secured Loan Facility continue to be utilised for corporate development and general working capital purposes.

REACT Energy plc

Chairman and Chief Executive's Report - continued

The Secured Loan Facility is to be repaid by way of a bullet repayment of capital (and any accrued interest) on before the anniversary of 60 months from July 2015, which was when the Company drew-down the Secured Loan Facility.

35,300,000 Warrants were issued to Alchemy Capital Limited, a company related to EcoFinance on drawdown of the Secured Loan Facility, subject to any necessary shareholder and other regulatory requirements, which have now been obtained. These Warrants entitle the holders to subscribe for new Ordinary Shares at an exercise price of 10p per share. The Warrants are assignable and capable of being exercised for a period of seven years from the date on which the Secured Loan Facility was drawn down.

Altair provided funding to REACT by way of a loan agreement to finance the Examinership process. The existing secured debt held by Altair at that time, comprising the 9% Secured Loan Note of £1.5 million issued in 2014 and the Examinership financing facility of €500,000, was refinanced by way of a new 7.5% £2 million Convertible Secured Loan Note ("CSLN") and is secured by the same security package granted in favour of EcoFinance in respect of the SLF. This is governed by an inter creditor deed under which the SLF security plus interest and costs shall rank in priority to the CSLN security plus interest and costs. Under the terms of the CSLN, Altair has the right to convert up to £1.0 million into new Ordinary Shares at £0.10. The Company also issued 3,150,000 Warrants to Origen Capital Partners LLP, an entity related to Altair, on drawdown of the SLF. These Warrants entitle the holders to subscribe for new Ordinary Shares at an exercise price of £0.10 per share. The Warrants are assignable and capable of being exercised for a period of seven years from the date on which the SLF was drawn down. EcoFinance and Altair have entered into a separate agreement in relation to financing provided to the Company whereby EcoFinance has granted to Altair an option to acquire the benefit and security of the SLF. This is a one-year option and the price of the option is a 5% premium on the capital amount.

An exercisable right in the form of an equity kicker was attached to the Secured Loan Facility whereby 60 dealing days from the drawdown of the Secured Loan Facility, EcoFinance had the right to an amount of fully paid new Ordinary Shares in the Company up to a maximum of 3,529,412 new Ordinary Shares. Altair was also separately granted an exercisable right in the form of an equity kicker of up to 3,529,412 new Ordinary Shares on the same basis as EcoFinance. On 21 October 2015, the Company announced that both EcoFinance and Altair had exercised their rights under the equity kicker agreements and the Company accordingly issued, in aggregate, a total of 7,000,000 Ordinary Shares to EcoFinance and Altair.

The main objective of the fundraising was to facilitate an exit from the Examinership process and the restoration of trading in the Company's shares on AIM. Warrants granted as part of the fundraising have a total maximum subscription value of approximately £4.7 million (if exercised in full).

The net proceeds from the fundraising continue to be used to fund general working capital across the Group. The Directors believe that the fundraising will provide the Group with adequate resources to develop a plan to enhance the value of its principal assets. Development of, and revenue generation from, the principal assets of the Group will require additional financing which the Directors expect to be sourced in due course.

STRATEGY AND PROSPECTS

The Group is a renewable energy project developer and operator. The Group takes projects from "Greenfield" (greenfield land) stage to "Shovel Ready" stage (projects where planning and development is advanced enough that, given sufficient funding, construction can begin within a very short time frame) with turnkey construction contracts and financial packages in place. Debt and equity partners are sought to fund the construction phase in return for a share of the project equity.

REACT Energy plc

Chairman and Chief Executive's Report - continued

Current Portfolio Status

The Group's business is broken down into Biomass Combined Heat and Power (CHP) projects in the UK, Biomass Heat Projects in the UK and Wind Turbine projects in Ireland and the UK.

It is the intention of the Group to retain and, with the help of its new investors, to develop all projects within its pipeline.

Biomass Combined Heat and Power (CHP)

Newry

Newry Biomass is a 4MW Biomass advanced gasification project located in Newry, Co. Down, Northern Ireland. The project is a joint venture with Farmer Business Development plc ("FBD") the Company's main shareholder. Newry Biomass Limited is a 50.01% subsidiary company of REACT.

Planning permission for waste to energy plant converting 25,000 tonnes per annum of virgin wood was received in May 2009. The project cost £11.7 million to construct and was funded through shareholder equity and loans. REACT invested £5.75 million and currently retains 49.11% of the economic benefit of the project, whilst FBD has 50.89%. Due to underperformance of the original gasification technology, a decision has been made to repower the project with a new technology. Accordingly, the project is currently on a 'care and maintenance' programme, pending additional funding required to engage a new technology provider, which the Company is currently in negotiations over.

Enfield, London

The Enfield Biomass project is a 12MW Biomass gasification project located in Enfield, London. The project has secured full planning and permitting approval and is ready to construct. The Group obtained an updated planning permission for converting 66,000 tonnes per annum of Grade C wood waste in January 2014. An environmental permit was received in April 2012. As part of the Scheme of Arrangement, the Group has ceased to pursue the legal action, which was announced on the 3 June 2015, in relation to the Enfield Biomass Limited property lease agreement and has agreed to the revocation of the existing lease on that site. New discussions in relation to the future of this site will be commenced shortly and further updates will be made as required.

Clay Cross

In Derbyshire, the Group, together with its partner Larkfleet Energy, is seeking approval to construct and operate a 12MW biomass conversion power plant. The planning application has been made. A decision on planning is expected to be announced in due course.

Biomass Heat

The Group is also the project developer and operator of three existing cash generating Biomass Heat power plants in the UK and has five projects in development to be built over the near term.

Equitix ESI Finance Limited ("Equitix") through a special purpose vehicle ("SPV"), which is 70% owned by Equitix and 30% by the Group, provides REACT with access of up to £5 million of committed project finance from the Green Investment Bank and a number of institutional investors. The Group sold the Culford and Kimbolten projects into the SPV for an agreed consideration. The Group also receives development and on-going management fees from the SPV.

The Culford School Biomass Heat plant in Suffolk, which has a 15-year Heat Supply Agreement, has been in operation for over two years. The Kimbolten School Biomass Heat plant in Cambridgeshire, which also has a 15 year Heat Supply Agreement, was recently brought into operation. In November 2013 the Group also signed a 20-year Heat Supply Agreement with Old Buckenham Hall School in Suffolk and the Biomass Heat plant was recently brought into operation.

REACT Energy plc

Chairman and Chief Executive's Report - continued

Wind Electricity Generation

In Ireland, the Group is currently operating a cash generating 800kW wind turbine in Pluckanes, County Cork. This plant was part financed by AIB Bank plc and has a 15 year Power Purchase Agreement with Viridian Energy Limited. The Group has also received planning permission to construct seven additional single wind turbine projects in Ireland.

REACT is in on-going discussion with a select number of landowners in the UK and Ireland regarding sites for the future development of renewable energy infrastructure projects.

FINANCIAL POSITION

Outlook

The Group's objectives during the year ended 30 June 2015 were very clear:

· Obtain creditor and shareholder approval for the Scheme;

· Complete the financing facility with EcoFinance;

· Obtain Court approval for the Scheme and complete the Examinership process; and

· Restore trading in the Company's shares on AIM

Having achieved these objectives the Group's business strategy remains one of focusing the Group's resources on delivering projects to financial closure and managing the implementation and operation of those projects. The intention is to retain a long-term income stream linked to profits generated by projects in addition to receiving a development fee from third parties in exchange for project equity. The Group has projects at various stages of development, and, subject to funding, will look to bring them into operation.

Dermot O'Connell Gerry Madden

Chairman Chief Executive

REACT Energy plc

Consolidated statement of profit or loss

for the year ended 30 June 2015

REACT Energy plc

Consolidated statement of other comprehensive income

for the year ended 30 June 2015

REACT Energy plc

Consolidated statement of financial position

At 30 June 2015

REACT Energy plc

Consolidated statement of cash flows

for the year ended 30 June 2015

REACT Energy plc

Extract from the notes to the consolidated financial statements

for the year ended 30 June 2015

1. Basis of Preparation and Going Concern

The Group's consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) effective at 30 June 2015 for all periods presented as issued by the International Accounting Standards Board. The consolidated financial statements are also prepared in accordance with IFRS as adopted by the European Union ('EU').

The consolidated financial statements are prepared under the historical cost convention except for certain financial assets and financial liabilities which are measured at fair value. The principal accounting policies set out below have been applied consistently by the parent company and by all of the Company's subsidiaries to all periods presented in these consolidated financial statements.

The financial statements of the parent company, REACT Energy plc have been prepared in accordance with International Financial Reporting Standards (IFRS) effective at 30 June 2015 for all periods presented as issued by the International Accounting Standards Board and Irish Statute comprising the Companies Act, 2014.

The Group incurred a profit of €5,319,419 (2014: loss of €15,222,338) during the year, but it had net current liabilities of €9,837,940 (2014: €11,852,174) and net liabilities of €2,636,096 (2014: €9,684,572) at 30 June 2015. 

On 27 July 2015, the Company announced the restoration of its shares to trading on AIM following the successful exit of the Company from an Examinership process. Part of the successful exit was the raising of £1 million (before expenses) by way of a Secured Loan Facility. The net proceeds from the fundraising continue to be used to fund general working capital across the Group. The Directors believe that the fundraising will provide the Company with adequate resources to develop a plan to enhance the value of its principal assets. Development of, and revenue generation from, the principal assets of the Company will require additional financing which is expected to be sourced in due course.

The Directors have given careful consideration to the appropriateness of the going concern basis in the preparation of the financial statements. The validity of the going concern basis is dependent upon additional financing being obtained for the development of, and revenue generation from, the principal assets of the Company and to provide general working capital. As no definite funding has been received on a number of developments of the Group, a material uncertainty exists in relation to the Company and the Group's ability to continue as a going concern.

The Directors believe that progress towards securing finance has been made. The Directors have a reasonable expectation that the Company will source this financing and the Group will have adequate resources to continue in operational existence for the foreseeable future. For these reasons the Directors continue to adopt the going concern basis of accounting in preparing the financial statements. The financial statements do not include any adjustments that would result if the Group was unable to continue as a going concern.

The Group continues to invest capital in developing and expanding its portfolio of renewable energy projects. The nature of the Group's development programme means that the timing of funds generated from developments is difficult to predict. Management have prepared financial forecasts to estimate the likely cash requirements of the Group over the next 12 months. The forecasts include certain assumptions with regard to the costs of ongoing development projects, overheads and the timing and amount of any funds generated from developments. The forecasts indicate that during this period the Group will require additional funds to continue with its activities and its planned development program.

REACT Energy plc

Extract from the notes to the consolidated financial statements

for the year ended 30 June 2015

1. Basis of Preparation and Going Concern - continued

Whilst the strategy is to build, own and operate plants, once a site has been secured and planning and permitting obtained the Group would be in a position, if it so chose, to monetise the value of the project.

The loss and weighted average number of ordinary shares used in the calculation of the basic and diluted loss per share are as follows:

Dilutive and anti-dilutive potential ordinary shares

The following potential ordinary shares were included in the 2015 diluted earnings per share calculation but were excluded in 2014 as they were anti-dilutive.

REACT Energy plc

Extract from the notes to the consolidated financial statements

for the year ended 30 June 2015

Events after the year end

As disclosed in Note 3, 37,470,972 New Ordinary Shares were issued on 24 July 2015 as part of the Scheme of Arrangement to enable the Company to exit the Examinership process. If these shares were in issue prior to 30 June 2015, they would have affected the calculation of the weighted average number of shares in issue for the purposes of calculating both the basic earnings/(loss) per share and diluted earnings/(loss) per share by 3,021,143 (assuming the shares were issued in June 2015).

As disclosed in Note 3, 7,000,000 New Ordinary Shares were issued on 21 October 2015 as part of the Equity Kicker disclosed in further detail in Note 35. If these shares were in issue prior to 30 June 2015, they would have affected the calculation of the weighted average number of shares in issue for the purposes of calculating both the basic earnings/(loss) per share and diluted earnings/(loss) per share by 583,333 (assuming the shares were issued in June 2015).

3. EVENTS AFTER THE BALANCE SHEET DATE

 On 3 July 2015, the Examiner appointed to REACT Energy plc ("REACT") and to a number of its subsidiaries (Newry Biomass Limited, Enfield Biomass Limited, Plymouth Biomass Limited, Grass Door Limited and Reforce Energy Limited) presented proposals for a scheme of arrangement (the "Scheme") to reconvened meetings of the Company's shareholders and creditors, which was approved unanimously by shareholders present and by a significant majority of creditors present. Following this, the Examiner presented to the High Court in Dublin on 6 July the Scheme for its consideration.

On 14 July 2015, the High Court approved the Scheme as presented by the Examiner appointed to REACT and its related companies. The Scheme becomes effective in accordance with its terms on 24 July 2015 at 5.00 pm (the "Effective Date"). Details of the terms of the Scheme were as follows:

· REACT will issue 37,470,972 new Ordinary Shares to creditors of the Company and its related companies to the value of €5,724,732 (giving an effective price per share of £0.11) through a debt for equity exchange.

· Altair Group Investment Limited ("Altair" or "the Secured Creditor") provided funding to REACT by way of a loan agreement to finance the Examinership process, which was announced on 13 May 2015. The existing secured debt held by Altair, comprising the 9% Secured Loan Note of £1.5 million issued in 2014 and the Examinership financing facility of €500,000, is refinanced by way of a new two-year 7.5% £2 million Convertible Secured Loan Note ("CSLN"), repayable in July 2017, and is secured by the same security package granted in favour of EcoFinance. This will be governed by an inter-creditor deed under which the SLN security plus interest and costs shall rank in priority to the CSLN security plus interest and costs. Under the terms of the CSLN, the Secured Creditor has the right to convert up to £1 million into new Ordinary Shares at £0.10p. It has also been granted an exercisable right in the form of an equity kicker of up to 3,529,412 new Ordinary Shares on the same basis as EcoFinance as outlined below.

· The Company has granted 3,150,000 Warrants to Origen Capital Partners LLP, an entity related to Altair, on drawdown of the SLN. These Warrants entitle the holders to subscribe for new Ordinary Shares in the capital of REACT at an exercise price of £0.10 per share. These Warrants are assignable and capable of being exercised for a period of seven years from the date on which the SLN is drawn down.

REACT Energy plc

Extract from the notes to the consolidated financial statements

for the year ended 30 June 2015

3. EVENTS AFTER THE BALANCE SHEET DATE - continued

· The Unsecured Convertible Loan Note Holder, FBD, will convert €1,742,027 to new Ordinary Shares at £0.11p per share, in line with the closing price on 1 December 2014, the date on which the Company's shares were suspended from trading on AIM. FBD will be issued 11,402,360 new Ordinary Shares.

· The Revenue Commissioners will be paid amounts owing to them of €4,350 within the Effective Date.

· The Preferential Creditors, which include Revenue Commissioners and current employees, will receive a cash dividend on the 12 month anniversary of the Effective Date equivalent to the sale of that number of shares which would have equated to their debt converted at £0.11p per share in line with the closing price when the Company's shares were suspended from trading. New Ordinary Shares of 1,217,254 equivalent to the total preferential debt of €185,969 will be issued to the Trustee at a share price of £0.11p per share. On the 12 month anniversary of the Effective Date, the Trustee will dispose of the shares in the market and distribute the proceeds to the Preferential Creditors having accounted for any and all taxes then falling due.

· The liability due to Unsecured Creditors and Rent Creditors of €3,796,736 shall be converted to 24,851,358 shares at £0.11p per share in line with the closing price when shares were suspended.

· Contingent Guarantee Creditors will have past agreed liabilities, payable from the relevant companies where the liability arose, converted to shares at £0.11p per share. As a result the Company will be released from any guarantees that it has entered into.

· As part of the Scheme, the Company has ceased to pursue the legal action, which was announced on the 3 June 2015, in relation to the Enfield Biomass Limited property lease agreement and has agreed to the revocation of the existing lease on that site. New discussions in relation to the future of this site will be commenced shortly and further updates will be made as required.

· Scheme protocol agreed for disputed Creditors amounting of approximately €164,000. The Company has sought claims from the disputed Creditors which have in the majority been agreed. Some remain to be resolved. An unagreed Creditor of any company in the Group may forward to the Company Secretary, within 21 days of the Effective Date, a proof of claim setting out the amount which it believes should be included as its claim for the purposes of the Proposals and the basis for the claim including supporting documents as applicable. The Company may issue additional new ordinary shares to settle the outstanding disputed Creditors' claims.

37,470,972 new Ordinary Shares was issued to the relevant Creditors and held by the Trustee on their behalf. The Trustee entered into a 'Lock-in' restriction on behalf of the Creditors, whereby they are unable to dispose of the new Ordinary Shares that they will receive pursuant to the Scheme for a period of one year from the date of Admission.

If the Scheme had taken place at 30 June 2015, the total liabilities of the Group would have been reduced by €5,818,030.

On 15 July 2015, the Board of REACT announces that it has raised £1,000,000 (before expenses) through a Secured Loan Facility ("SLF"). EcoFinance, a group which sources finance for renewable energy projects, has provided the SLF.

REACT Energy plc

Extract from the notes to the consolidated financial statements

for the year ended 30 June 2015

3. EVENTS AFTER THE BALANCE SHEET DATE - continued

The SLF is at a fixed rate of 15% per annum, the interest on which will be paid monthly in arrears. The SLF is for a five-year term and the principal together with any accrued interest will be repayable by a bullet repayment at the end of the term. The SLF is secured by mortgage debentures, cross guarantees and share pledges over REACT and its subsidiary companies.

An exercisable right in the form of an equity kicker is attached to the SLF whereby 60 days from the drawdown under the SLF, EcoFinance has the right to an amount of fully paid new ordinary shares in the Company. The monetary value of the exercisable right will be determined by the following formula:

· 9 million x (Average Share Price minus £0.10), where the Average Share Price is the arithmetic average of the Company's closing share price on each of the 60 days following re-commencement of trading in the Company's shares. The value of this right has a cap of £600,000 and a floor of £200,000. The maximum number of shares issuable under this mechanism is 3,529,412 Ordinary Shares in the Company.

35,300,000 Warrants are to be granted to Nirvana Capital Limited ("Nirvana") (or such company as Nirvana may direct), a company related to EcoFinance, on drawdown of the SLF, subject to any necessary shareholder and other regulatory requirements. These Warrants will entitle the holders to subscribe for new ordinary shares in the capital of REACT at an exercise price of £0.10 per share.

These Warrants are assignable and capable of being exercised for a period of seven years from the date on which the Loan Facility is drawn down.

On 15 July 2015, EcoFinance, Nirvana and Altair have entered into separate agreements in relation to financing provided to the Company. These agreements include the following:

· Nirvana has granted to Altair an option to acquire the full economic benefit of up to 8,825,000 of the Warrants to be granted to Nirvana at a price of £0.08. This option may be exercised by Altair for a period of 120 days from the Effective Date; and

· EcoFinance has granted to Altair an option to acquire the benefit and security of the £1,000,000 SLF. This is a one-year option and the price of the option increases from £1,006,250 to £1,100,000 depending on the time of exercise.

As a result of the above agreements, EcoFinance, Nirvana and Altair (including their respective related parties) are deemed as being parties acting together or in concert (the "Concert Party"). The combination of equity kickers, warrants and conversion rights that could be exercised by these parties could mean that their combined future shareholdings could exceed 30%. The Company has obtained a waiver of Rule 9.1(a) from the Irish Takeover Panel in respect of the obligation to make a mandatory offer for the entire issued and to be issued share capital of the Company not already held by EcoFinance, Nirvana and Altair (including their respective related parties), conditional upon the approval by a majority of the independent shareholders of REACT in a poll.

On 27 July 2015, it was announced that the suspension of trading on AIM in the Company's shares will be lifted, with trading in the Company's shares being effective at 8.00 am on 27 July 2015.

On 16 October 2015, an Extraordinary General Meeting was held to approve the Whitewash Waiver detailed above and was passed by the meeting. Following on from that, the Concert Party notified the Company of its intention to exercise its rights under the Equity Kicker noted above and 7,000,000 Ordinary Shares were issued to the Concert Party on 21 October 2015.

REACT Energy plc

Extract from the notes to the consolidated financial statements

for the year ended 30 June 2015

3. EVENTS AFTER THE BALANCE SHEET DATE - continued

 On 26 November 2015, Newry Biomass Limited converted its issued loan note instruments into ordinary shares of Newry Biomass Limited.

REACT Energy plc

Supplementary information in relation to the Examinership

for the year ended 30 June 2015

Note: The following page does not form part of the statutory financial statements which are the subject of the independent auditor's report.

If the Scheme had taken place at 30 June 2015, the following would have been the Balance Sheet of the Group at 30 June 2015, having taken into account the Scheme of Arrangement noted above.