Last checked at 13 May 2015 16:00
13 May 2015
REACT Energy plc
("REACT" or the "Company")
Petition for Examinership
REACT Energy plc (AIM: REAC), has today announced that the directors of REACT and its related companies Newry Biomass Limited, Enfield Biomass Limited, Reforce Energy Limited, Grass Door Limited and Plymouth Biomass Limited ("REACT and related companies") have applied to the High Court in Dublin to seek the appointment of an examiner. REACT and related companies are now under the protection of the court under the examinership procedure.
Under Irish Law the examinership process provides court protection to enable the appointed examiner of companies to put together a scheme of arrangement with creditors with a view to allowing the companies to trade as sustainable businesses post the examinership.
REACT and related companies have sought to enter examinership with the objective of restructuring the business to create a sustainable business model which is currently hampered due to funding issues arising from inter alia disputes with landlords and legal actions by certain creditors.
The decision to seek examinership follows the suspension of funding discussions with a strategic investor which resulted from a dispute with the landlord on its Enfield site, related difficulties in financing the repowering of its 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 has concluded that it is 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, an existing loan note holder, is prepared to support REACT throughout the examinership process and together with a third party strategic investor have indicated that they would be prepared to invest in REACT to facilitate a scheme of arrangement for the restructured business.
REACT also announces that as part of the examinership process it has issued a loan note to Altair Group Investment Limited ("Altair") for up to EUR 500,000. The proceeds of the loan note will be used to fund the examinership process. The loan note is repayable 14 business days after the end of the examinership period and carries an annual interest rate of 9%. REACT has also signed a Deed of Amendment and Confirmation with Altair the purpose of which is to confirm that the security attaching to the one year £1.5 million 9% Secured Loan Note issued to Altair announced on 24 June 2014 comprising a first charge held by REACT in its project operating and development companies, also attaches to further monies advanced by Altair to REACT.
- Ends -
For further information:
REACT Energy plc | +353 (0)21 2409 056 |
Gerry Madden/Brendan Halpin | |
Shore Capital - Nomad & Broker | +44 (0)20 7408 4090 |
Pascal Keane / Anita Ghanekar |
About REACT
REACT Energy plc is committed to operating clean electricity and heat generation plants in the UK and Ireland.
The Company identifies, builds owns and operates plants 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 listed on AIM and trades as REAC.www.reactenergyplc.com