16 Jul 2008 11:02
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION
The Greenhouse Fund Limited
("Greenhouse" or "the Company")
Proposed Acquisition of Molectra Australia Pty Ltd
Change of Name to Molectra Group Limited
Admission of Enlarged Share Capital to trading on AIM
Notice of Extraordinary General Meeting
Subject to Existing Shareholder approval Greenhouse is to acquire all of the issued share capital of Molectra Australia that it does not already own.
The consideration for the Acquisition will be satisfied by the issue of 32,000,000 Greenhouse Shares to Molectra Technologies and White Cap, representing 15.74 per cent. of the Enlarged Share Capital of the Company.
Conditional upon completion of the Acquisition, Greenhouse will also acquire the intellectual property, currently owned by Molectra Holdings, which Molectra Australia relies upon for its business.
The consideration for the acquisition of the intellectual property will be satisfied by the issue to Molectra Holdings of 16,000,000 Greenhouse Shares, representing 7.87 per cent. of the Enlarged Share Capital of the Company.
Following the Acquisition and the acquisition of the intellectual property the Company will have 203,225,000 ordinary shares in issue.
Proposed change of name to Molectra Group Limited.
The Company will cease being an externally managed investment company and will become an internally managed company whose principal business will be conducted through its wholly owned subsidiary, Molectra Australia.
Paul Gazzard and Rodger Sargent, the directors and shareholders of the Strategic Adviser, will join the Board and the Strategic Adviser Agreement will be terminated. John Dobozy, the inventor of the technology and process relied upon by Molectra Australia for its business, and David Hassum will also join the Board.
Certain shareholders have irrevocably committed to vote in favour of all Resolutions in respect of their beneficial interests amounting, in aggregate, to 60,342,600 Greenhouse Share representing 38.87 per cent. of the existing issued share capital of Greenhouse.
The Directors have committed to vote in favour of all Resolutions in respect of their beneficial interests amounting, in aggregate, to 6,750,000 Greenhouse Shares, representing 4.35 per cent. of the existing issued share capital of Greenhouse.
The Existing Directors unanimously recommend to Greenhouse Shareholders to vote in favour of the Resolutions to be proposed at the Greenhouse EGM.
Application will be made to the London Stock Exchange for the Existing Greenhouse Shares to be re-admitted and the New Greenhouse Shares to be admitted to trading on AIM.
The Acquisition constitutes a reverse takeover of Greenhouse under the AIM Rules and therefore requires the prior approval of Existing Shareholders at the Greenhouse EGM.
The Acquisition is also conditional, inter alia, on the completion of the IP Assignment Agreement, the consent of the JFSC and Admission.
An Admission Document is being posted to Shareholders today to provide them with background to, and information regarding, the Proposals, to explain why the Board considers that the Proposals are in the best interests of Greenhouse and its Shareholders as a whole, to seek their approval of the Proposals at the Greenhouse EGM and to recommend that Shareholders vote in favour of the Resolutions which are necessary to approve and implement the Proposals.
The Admission Document will be available free of charge during normal business hours on any week day until the date following one month after the date of Admission from the Company's registered office at BNP House, Anley Street, St Helier, Jersey and from the offices of Norton Rose LLP at 3 More London Riverside, London and will be available for download from the Company's website at www.greenhousefund.co.uk.
For further information:
| Greenhouse Advisor Limited |
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| Paul Gazzard | +44 20 7355 7664 |
| Rodger Sargent | +44 20 7355 7662 |
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| Matrix Corporate Capital LLP |
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| Stephen Mischler | +44 20 3206 7203 |
| Tim Graham | +44 20 3206 7206 |
| Threadneedle Communications Ltd. |
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| Graham Herring | +44 20 7936 9605 |
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION
Proposed Acquisition of Molectra Australia Pty Ltd
Change of Name to Molectra Group Limited
Admission of Enlarged Share Capital to trading on AIM
Notice of Extraordinary General Meeting
This summary should be read in conjunction with the full text of the Admission Document which is being posted to Shareholders today and is available from the Company's website www.greenhousefund.co.uk. The Acquisition is subject to certain conditions including the approval of Existing Shareholders at an Extraordinary General Meeting which will be held on 12 August 2008. The following words and expressions have the same meaning as in the Admission Document unless the context otherwise requires.
Introduction
The Board of Greenhouse is pleased to announce that it has conditionally agreed, subject to Existing Shareholder approval at the Greenhouse EGM, to acquire from, Molectra Technologies and White Cap, all the issued share capital of Molectra Australia that it does not already own.
Following the Acquisition of the 6,246 Molectra Australia shares (representing 35.7 per cent. of Molectra Australia's issued share capital) which it does not currently own, the Company will own 100 per cent. of Molectra Australia. Molectra Australia is based in Brisbane, Australia and was established to focus on waste tyre recycling. The consideration for the Acquisition will be satisfied entirely by the issue of 32,000,000 Greenhouse Shares to Molectra Technologies and White Cap, representing 15.74 per cent. of the Enlarged Share Capital of the Company.
Conditional upon completion of the Acquisition, Greenhouse will also acquire the intellectual property, currently owned by Molectra Holdings, which Molectra Australia relies upon for its business. The consideration for the acquisition of the intellectual property will be satisfied by the issue to Molectra Holdings of 16,000,000 Greenhouse Shares, representing 7.87 per cent of the Enlarged Share Capital of the Company.
The Acquisition and the ancillary proposals will result in a fundamental change in the business, board and voting control of the Company and therefore constitute a reverse takeover under the AIM Rules, which requires the approval of Existing Shareholders at the Greenhouse EGM.
The nature of the Company's business will be transformed by the Acquisition and in order to reflect its new activities it is proposed that the Company's name be changed to Molectra Group Limited. The Company will cease being an externally managed investment company and will become an internally managed company whose principal business will be conducted through its wholly owned subsidiary, Molectra Australia. As a result, the Company will, at no cost, terminate its contracts with the Investment Manager, the Investment Adviser and the Custodian, who have each agreed to waive the notice periods contained in those contracts. Paul Gazzard and Rodger Sargent, the directors and shareholders of the Strategic Adviser, will join the Board of the Company and the Strategic Adviser Agreement will also be terminated. John Dobozy, the inventor of the technology and process relied upon by Molectra Australia for its business, and David Hassum will also join the Board. Subject to the consent of the JFSC, the Company will cease to be classified as a collective investment fund for Jersey legal and regulatory purposes.
The Acquisition is conditional, inter alia, upon (i) the passing of the Resolutions at the Greenhouse EGM, (ii) Admission and (iii) the consent of the JFSC. The Acquisition is also conditional upon completion of the IP Assignment Agreement.
An Admission Document is being posted to Shareholders today to provide them with background to, and information regarding, the Proposals, to explain why the Board considers that the Proposals are in the best interests of Greenhouse and its Shareholders as a whole, to seek their approval of the Proposals at the Greenhouse EGM and to recommend that Shareholders vote in favour of the Resolutions which are necessary to approve and implement the Proposals.
Certain Shareholders have irrevocably committed to vote in favour of all Resolutions in respect of their beneficial interests amounting, in aggregate, to 60,342,600 Greenhouse Shares, representing 38.87 per cent. of the existing issued share capital of Greenhouse.
In addition, the Directors have committed to vote in favour of all Resolutions in respect of their beneficial interests amounting, in aggregate, to 6,750,000 Greenhouse Shares, representing 4.35 per cent. of the existing issued share capital of Greenhouse.
If the Resolutions are duly passed and all other conditions to the Transactions duly satisfied, trading in the Existing Greenhouse Shares will be cancelled and Greenhouse will apply for re-admission of the Existing Greenhouse Shares and admission of the New Greenhouse Shares to trading on AIM. It is expected that the Enlarged Share Capital will be admitted to trading on AIM on 13 August 2008.
Background to and reasons for the Acquisition
Greenhouse is presently a Jersey domiciled closed-ended investment company that invests in sustainable environmental technologies with the aim of creating a portfolio of investment holdings in the Environmental Sector.
On 5 January 2006, Greenhouse completed a placing to raise £9,800,000 before expenses and was admitted to trading on AIM. Greenhouse had previously raised approximately £270,000 by way of a pre-flotation private placing. Part of the proceeds of these fundraisings has been invested in the Environmental Sector and Greenhouse has, to date, made a number of investments in Molectra Australia and has also acquired five Bauxsol technology sub-licences and the assets of Sterling Environmental Solutions from Virotec.
Molectra Australia
Molectra Australia operates a waste tyre re-cycling facility in Brisbane, Australia. The business is based on a process that re-cycles and recovers materials including crumb rubber (and, following further processes, oils and carbon) from used vehicle tyres. The technology generates rubber granules known as ''crumb rubber'' from waste tyres which can then be re-bonded into a range of moulded rubber products. The intellectual property which Molectra Australia relies upon for its business is owned by Molectra Holdings, a company not controlled by Greenhouse, and is currently licensed to Molectra Australia.
Greenhouse's initial investment of £750,000 in Molectra Technologies and Molectra Australia was made in early 2006 in exchange for a convertible loan note. It was subsequently agreed that Greenhouse would be issued shares in Molectra Australia upon exercise of this note.
In March 2007, Greenhouse provided additional funding equal to £1,200,000 and Molectra Technologies issued a further convertible note in favour of Greenhouse. This convertible note could be converted into shares in Molectra Technologies or repaid by way of the transfer of certain assets of Molectra Technologies (which at that time included part of its investment in Molectra Australia).
In July 2007, Greenhouse exercised both convertible notes and was issued with shares in Molectra Australia which resulted in Greenhouse's holding in Molectra Australia being 57.5 per cent.
Greenhouse's investments have enabled Molectra Australia's pilot plant to be scaled up so that it now has the capacity to process up to 210,000 tyres per year into crumb rubber (based on an average tyre weight of 9.7 kilograms) as well as providing the infrastructure required to implement the crumb rubber process on a larger scale.
In addition to these initial investments, on 2 August 2007 Greenhouse agreed to provide Molectra Australia with a drawdown facility of up to AUD$4,500,000. On 15 April 2008, Greenhouse announced that the AUD$1,700,000 drawn of this facility (representing the entire outstanding loan) would be repaid by the issue of further shares in Molectra Australia, taking Greenhouse's stake to 64.3 per cent.
Greenhouse has agreed in principle to advance a further loan of £600,000 to Molectra Australia to purchase and assemble an additional value-added product line at the Pilot Plant. The expansion of the production line is expected to provide Molectra Australia with the capacity meet the increased demand generated from the second contract win, details of which are set out below. This is the only outstanding loan (whether drawn, committed or proposed) from Greenhouse to Molectra Australia.
Having examined a number of alternative strategic options, the Existing Directors concluded that the proposed acquisition of the remaining issued share capital of Molectra Australia which Greenhouse does not already own and the acquisition of the intellectual property, currently owned by Molectra Holdings, which Molectra Australia relies upon for its business, is in the best interests of Greenhouse Shareholders.
History and Background of Molectra Australia
Molectra Technologies was established in 2000 by John Dobozy to commercialise a waste tyre resource recovery technology designed to recover and extract certain raw materials embedded in waste tyres.
The technology is capable of generating rubber granules known as ''crumb rubber'' from waste tyres which can then be re-bonded into a range of moulded rubber products. Mr Dobozy also developed a vacuum microwave system which is capable of extracting oils and carbon (the building blocks of rubber) from waste tyres, although the vacuum microwave system is not yet at a commercially viable stage.
The technology has won many awards during its development, including a Eureka Prize for Engineering Innovation sponsored by the Australian Museum and Engineers Australia in 2003, a World Expo ''Global 100 Eco-Tech'' Award in 2005 and in July 2007 Molectra won the DaimlerChrysler Australian Environmental Research Award presented by the Banksia Foundation.
In March 2006, Molectra Australia was established to build and operate the Pilot Plant. The Pilot Plant was completed and has been operating since February 2007. It was built to enable Molectra Australia to improve and streamline the logistics and mechanics of the technology, to demonstrate the effectiveness of the Molectra Process and to analyse capital and operating costs. The Directors believe that the Pilot Plant has been successful in these aims and has demonstrated the commercial potential of the technology. Molectra Australia owns and will continue to operate the Pilot Plant following completion of the Acquisition and the Directors expect that it will become a centre of excellence for tyre recycling and a showcase for the Molectra Process.
On 10 March 2008, Greenhouse announced that Molectra Australia had entered into its first contract to supply anti-cast products made from its recycled re-bonded crumb rubber to the equine market. Anti-cast products are used to help horses get to their feet after spending time lying on the ground. The contract will be supplied out of the Pilot Plant and marks a key turning point for the technology as it moves from the research and development phase towards a commercially viable process. Molectra Australia has since shipped its first batch of anti-cast strips made from its recycled rebounded crumb rubber to an individual trading as HorseFabulous Products & Equipment, for distribution across Australasia.
On 10 June 2008, a second contract was awarded to Molectra Australia. This contract relates to the supply of automotive accessory products, manufactured from Molectra Australia's recycled, re-bonded crumb rubber, to an Australian distributor.
Financial Information
Financial Information on Molectra Australia covering the nine month periods ended 31 December 2006 and 31 December 2007 and the period from 6 March 2006 to 31 March 2007 is included in the Admission Document being posted to Shareholders today.
For the nine month period ended 31 December 2007, Molectra Australia reported revenue of £127,609 (2006: £2,056) and recorded a loss after tax of £444,447 (2006: £376,052). As at 31 December 2007, Molectra Australia had net assets of £50,476 (2006: (£382,174)).
Non-Core Assets
On 29 June 2006, Greenhouse acquired five Bauxsol technology sub-licences and the assets of Sterling Environmental Solutions from Virotec for an aggregate consideration of £5,000,000. The consideration was satisfied by the issue of 30,000,000 Greenhouse Shares and a further £500,000 in cash. At the share price at the time, the share element was valued at £4,500,000. As a result of the issue of the Greenhouse Shares, Virotec acquired a 19 per cent. holding in the issued share capital of Greenhouse. On 25 June 2008, Hydrodec Group plc acquired Virotec pursuant to a scheme of arrangement and as a result Hydrodec Group plc now controls this stake in the Company.
Bauxsol technology sub-licences
The five technologies sub-licensed to Greenhouse were for Bauxsol technology developed by Virotec.
The sub-licences included:
(a) ViroConcrete Technology - speciality cement products with applications in shotcreteing, grouting, high density concrete, acid exposed concrete or concretes that are exposed to water or wet environments, particularly salt water environments;
(b) ViroAirFilter Technology - designed to remove mercury, CO² and other polluting metals from industrial flue gasses by 'gas scrubbing' such environmentally hazardous compounds from waste gases prior to their release into the atmosphere;
(c) ViroFertiliser Technology - this aims to control the level of phosphate pollution and increase crop yields via the slow release of phosphate from super phosphate fertilisers;
(d) Gastric animal applications - these aim to relieve chronic and potentially life threatening gastric problems within animals; and
(e) any further new commercial applications developed from the Bauxsol technology.
Following the implementation of the Proposals, the Board intends to focus on the development of Molectra Australia's business. The Bauxsol sub-licenses will be treated as non-core assets and Greenhouse is currently considering the strategic options available to maximise Shareholder value including their possible disposal.
Sterling Environmental Solutions
Through its wholly owned subsidiary, Greenhouse Organic Solutions Limited, Greenhouse purchased the assets of Sterling Environmental Solutions, a UK non-trading company. The assets acquired include all intellectual property rights owned or used by Sterling Environmental Solutions, including all rights relating to the concept for the treatment of industrial waste at a regional treatment centre. Following the implementation of the Proposals, these assets will also be treated as non-core assets and subjected to a strategic review to maximise Shareholder value.
Prospects
The Company's short term prospects involve securing additional contracts for the production and supply of the higher margin re-bonded crumb rubber products. To date, two value-added product contracts have been awarded and the proposed investment by Greenhouse will Molectra Australia to begin to enhance the production facility and increase capacity to accommodate the increasing production demand. The Company is in discussions with a number of parties both in Australia and overseas and, if additional contracts can be secured and demand is sufficient, the Company will consider the construction of a second facility.
In addition to owned and operated plants, the Company is exploring opportunities to establish tyre recycling plants, which utilise the Molectra Process, for third parties. The Directors consider this to be a potentially exciting and significant area of expansion for Molectra Australia. Target industries for such plants include the mining and waste management industries, where there are restrictions and regulations on the disposal of waste tyres.
Over the medium to long term the Company will continue to improve the MolectraVac technology and seek to produce a carbon based product stream that is commercially viable.
Directors and Proposed Directors
Currently, the Board of Greenhouse consists of the following Directors:
Roger Charles Maddock, Non-Executive Director, Age 57
Mr Maddock has worked in the finance industry in Jersey since 1981, specialising in fund administration. He was a partner in a local chartered accountancy practice and a director of Worthy Trust Company Limited (WTC), a trust company owned by the accountancy practice. He was the Managing Director of Equitilink International Management Limited, the manager of the First Australia Group of Funds and a director of various of the underlying funds of that group between 1984 and 1998. Following the sale of WTC to AIB Banks (CI) Limited in 1999, he became a director of that bank's trust and fund administration companies until 2001. Between 2002 and 2005 he was a non-executive director of AIB Banks (CI) Limited and Chairman of AIB Fund Administration Limited. He also holds a number of other directorships of fund management and investment companies.
William Roger King, Non-Executive Director, Age 54
Mr King is a chartered accountant, having initially trained at Coopers & Lybrand in Jersey and London. He was a partner with Jackson Fox Chartered Accountants, Jersey between 1982 and 2000 and a director of AIB Worthytrust Limited (formerly Worthy Trust Company Limited) from 1982 to 2001 and of Equitilink International Management Limited from 1985 to 1998, in Jersey. Mr King is a consultant to both AIB Worthytrust and to HLB Jackson Fox, Chartered Accountants and a director or trustee of various corporate and private client entities. He is currently the managing director of Anglo Saxon Trust Limited and a non-executive director of Off-Plan Fund Limited and Ottoman Fund Limited.
It is proposed that on Completion of the Acquisition, Roger Maddock and Roger King will remain on the Board as Non-Executive Directors and the Proposed Directors will be appointed.
The Proposed Directors are:
Paul Terence Gazzard, Chief Executive Officer, Age 36
Mr Gazzard graduated from London University in 1993 with a degree in Biochemistry and Human Physiology. He then trained and worked within various City financial institutions, including Panmure Gordon, as a fund manager and investment analyst specialising in small cap. technology stocks. He left the City in 2002 to join Virotec International plc and has worked in the green/sustainable sector ever since. Mr Gazzard was involved in the launch of Greenhouse in January 2006 and, as a principal of the Strategic Adviser, has been involved in advising Greenhouse on its portfolio of investments.
Rodger David Sargent, Chief Financial Officer, Age 36
Mr Sargent is currently a non-executive director of Hydrodec Group plc, an AIM listed environmental solutions company whose business relates to an oil refining process designed to remove contaminates such as PCBs. He was also a founder and the finance director of Sports Resource Group Limited, Sports Internet Group plc, InTechnology plc and Sports Cafe Holdings plc. He was a non-executive director of I Feel Good (Holdings) plc, Healthcare Enterprise Group plc and Catalyst Media Group plc. He qualified as a chartered accountant with PricewaterhouseCoopers, London in 1996 before working with Merrill Lynch, London as a debt analyst. Mr Sargent was involved in the launch of Greenhouse in January 2006 and, as a principal of the Strategic Adviser, has been involved in advising Greenhouse on its portfolio of investments.
John Geza Dobozy, Chief Technical Officer, Age 63
Mr Dobozy is the inventor of the tyre recycling technology that is currently being commercialised by Molectra Australia, beginning this development in 1977. He has extensive experience in several industries including construction, fabrication, building and engineering. During the 1970s and 1980s he designed and developed several waste management and environment-related technologies and later focused his attention on developing technology for waste tyres. He is a founding committee member of the Gold Coast & Region Environment Industry Association (GREIA).
David Stanley Hassum, Non-Executive Director, Age 49
David began his career in 1979 with KPMG as a computer audit specialist. In 1994 David joined BDO Kendalls, Queensland's fifth largest Chartered Accounting and Business Advisory firm, where he founded and managed the technology division. David retired as a Partner in 2001. More recently David has been an Associate Director of InterFinancial Limited, Investment Bankers and Corporate Advisors. David has a Bachelor of Business with majors in Accounting and Data Processing and a Master of Commerce (Information Systems). David is a member of the Institute of Chartered Accountants in Australia (ICAA), with IT Specialist designation, and the Australian Institute of Company Directors (AICD).
Corporate Structure
On Admission the Enlarged Group will comprise Molectra Australia, Greenhouse IP Development Limited and Greenhouse Organic Solutions Limited, all of which will be wholly owned subsidiaries of Molectra Group Limited.
Principal Terms of the Acquisition
Greenhouse has agreed to purchase the 6,246 Molectra Australia shares which it does not currently own in consideration of the issue of 30,493,760 Greenhouse Shares to Molectra Technologies and the issue of 1,506,240 Greenhouse Shares to White Cap.
Completion of the Acquisition Agreement and the White Cap Acquisition Agreement are conditional on, among other things:
the passing of the Resolutions at the Greenhouse EGM;
Admission;
the completion of the IP Assignment Agreement; and
the consent of the JFSC.
Greenhouse has entered into the IP Assignment Agreement under which Greenhouse will acquire the intellectual property developed by John Dobozy and owned by Molectra Holdings, which Molectra Australia relies upon for its business for a consideration of 16,000,000 Greenhouse Shares to Molectra Holdings. The IP Assignment Agreement is conditional upon simultaneous completion of the Acquisition Agreement and the White Cap Acquisition Agreement. It is expected that Completion and Admission will take place on 13 August 2008. The Greenhouse Shares issued in respect of the Acquisition and the IP Assignment Agreement will, upon their allotment, rank pari passu in all respects with the Existing Greenhouse Shares.
Lock-In Arrangements
The Directors, Molectra Technologies, White Cap and Molectra Holdings (the ''Locked-in Parties'') will, following Admission, in aggregate, have an interest in 54,750,000 Greenhouse Shares, representing 26.94 per cent. of the Enlarged Share Capital and have given undertakings to Greenhouse and Matrix not to sell, charge or grant any interests over any Greenhouse Shares held by them (subject to certain exemptions) during the 12 month period commencing on Admission. In addition, the Locked-in Parties have undertaken not to dispose of their Greenhouse Shares unless they have the consent of Matrix prior to any disposal and to make any disposal through Matrix for a 12 month period thereafter in order to maintain an orderly market in the Greenhouse Shares.
Proposed Directors' Remuneration and Service Contracts
Proposed Executive Directors
It is intended that the following Proposed Directors will, prior to Admission, enter into service agreements, the terms of which are set out below:
Name Date Notice Period Salary
Paul Gazzard 16 July 2008 6 months £120,000
Rodger Sargent 16 July 2008 6 months £100,000
John Dobozy 16 July 2008 see below AUD$150,000
The service agreements for Paul Gazzard, Rodger Sargent and John Dobozy are conditional upon and shall take effect on Admission. The service agreement for John Dobozy is stated to continue for a minimum period of 5 years, unless terminated earlier at any time by Molectra Australia upon giving 12 months' notice (or 6 months' notice after the expiry of the initial 5 year term), or by Mr Dobozy at any time from two years after Admission upon giving 6 months' notice. The service agreements for Paul Gazzard and Rodger Sargent are terminable by either party at any time upon 6 months' notice. During any period of notice there is an express contractual right to place the executives on garden leave. Any payment in lieu of the executives' notice period shall consist of basic salary only. The service agreements shall also be subject to termination by summary notice in writing if the executive shall have, inter alia, committed an act of gross misconduct or become bankrupt.
The service agreements of Rodger Sargent and Paul Gazzard provide that the Company may, at its sole discretion both as to whether to pay a bonus and, if so, how much, pay the executive a bonus of such amount as the board of Greenhouse may determine in respect of each complete financial year of Greenhouse during which the employment subsists. The service agreement for John Dobozy provides that his annual salary may be increased to up to AUD$240,000 upon the achievement of specified performance-related milestones. In addition to his salary, Molectra Australia will make contributions to a complying superannuation fund of John Dobozy's choice at a rate no less than the minimum rate to avoid a charge under the Superannuation Guarantee (Charge) Act 1992. Other benefits provided to Paul Gazzard and Rodger Sargent are contractual sick pay at a rate equivalent to the basic salary for 26 weeks of sickness absence in any 12 month period and 25 days' holiday per annum.
The service agreements for Paul Gazzard and Rodger Sargent contain post termination restrictive covenants which remain in force for a period of 6 or 12 months following the termination of employment depending on the nature of the restriction. For a period of six months after termination of employment Paul Gazzard and Rodger Sargent are prohibited from being engaged in a competing undertaking, from dealing with the Group's customers, from employing key employees of the Group, from interfering with the supply of goods and services from the Group's suppliers, and from soliciting goods from the Group's suppliers. For a period of 12 months following termination of employment Paul Gazzard and Rodger Sargent are prohibited from soliciting business from the Group's customers and from soliciting senior employees to cease working for the Group. The service agreement for John Dobozy contains post termination restrictive covenants which remain in force for up to two years following the termination of employment and which prohibit Mr Dobozy from being engaged in a competing undertaking, from soliciting senior employees to cease working for the Group, from soliciting business from or dealing with the Group's customers or suppliers and from interfering with the relationship between the Group and its customers or suppliers. The service agreements for the executives include provisions preventing the disclosure of confidential information in relation to the Group. Save as detailed above, there are no provisions in the service agreements for the executives providing for compensation on termination of employment. The service agreements for Paul Gazzard and Rodger Sargent are governed by English law and the service agreement for John Dobozy is governed by the laws of Queensland, Australia.
David Hassum has been appointed as a non-executive director of the Company on an annual salary of AUD$70,000 pursuant to a letter of appointment which takes effect on Admission and is for an initial period of three years subject to earlier termination by either party on three months' notice.
Extraordinary General Meeting
Set out at in the Admission Document is a notice convening the Extraordinary General Meeting to be held at Liberte House, 19-23 La Motte Street, St Helier, Jersey JE2 4SY, on 12 August 2008 at 10:30 a.m. (or as soon thereafter as the annual general meeting of the Company, convened for the same place and date, shall have concluded or been adjourned). The terms of the Resolutions are set out in that notice.
Resolution No. 1
As the Acquisition will constitute a ''reverse takeover'' for the Company then, in accordance with the AIM Rules for Companies, it cannot be completed until the Company's Existing Shareholders have approved it. Accordingly, Resolution No. 1, which is an ordinary resolution, seeks Existing Shareholders' approval of the Transactions.
Resolution No. 2
As a result of the Transactions the Company intends to change its name to Molectra Group Limited. Resolution No. 2, which is a special resolution and is conditional on Resolution No. 1 being passed, seeks Existing Shareholders' approval to this change of name. As a special resolution, Resolution No. 2 will require a majority of not less than two thirds voting in person or, on a poll, by proxy in favour of it.
Resolution No. 3
As a result of the Transactions and the change in the Company's business from an investment company to a trading company, Resolution No. 3, which is a special resolution and is conditional on Resolution No.1 being passed, seeks Existing Shareholders' approval of the adoption of the New Articles of Association. As a special resolution, Resolution No. 3 will require a majority of not less than two thirds voting in person or, on a poll, by proxy in favour of it.
Admission and Dealings
Application will be made to the London Stock Exchange for the Existing Greenhouse Shares to be readmitted to trading on AIM and for the New Greenhouse Shares, to be admitted to trading on AIM conditional upon, inter alia, the approval of the Transactions at the Greenhouse EGM.
It is expected that Admission will become effective and dealings will commence in the Enlarged Share Capital on 13 August 2008. No application has or will be made for the Enlarged Share Capital to be admitted to trading or to be listed on any other stock exchange.
Recommendation
The Directors have committed to vote in favour of the resolutions to be put to the Greenhouse EGM, which include, inter alia, a resolution to approve the Acquisition, in respect of their beneficial holdings totalling 6,750,000 Greenhouse Shares representing in aggregate approximately 4.35 per cent. of Greenhouse's existing issued share capital. The Existing Directors unanimously recommend to Greenhouse Shareholders to vote in favour of the Resolutions to be proposed at the Greenhouse EGM.
Further Information
Potential investors should read the whole of the Admission Document which provides additional information on the Company, Molectra Australia and the Proposals and should not rely on summaries included in this announcement. Investors' attention is drawn, in particular, to the Risk Factors set out in Part III of the Admission Document and the Additional Information set out in Part VI of the Admission Document.