LEAF.L Regulatory News (LEAF)

27 November 2019

Leaf Clean Energy Company

(the "Company")

Proposed Cancellation of Admission of the Shares to trading on AIM

(the "Cancellation") and

 Notice of Extraordinary General Meeting

As announced by the Company on 7 November, following the recent return of £21.5 million to Shareholders by way of compulsory redemption of Shares (the "Redemption"), the Board of Leaf Clean Energy Company has concluded that it is unlikely any further significant funds will be returned to Shareholders.

Upon completion of the Redemption the Company became a cash shell for the purposes of AIM Rule 15 and as such must make an acquisition or acquisitions, which constitute a reverse takeover (for the purposes of the AIM Rules) within six months in order to maintain its quoted status.

Given the above circumstances, noting that the Company's investment objective (to realise its investments and return the proceeds to Shareholders) has been substantially achieved and also noting that the Company has no desire to make a relevant acquisition or acquisitions the Board has concluded that it is no longer necessary for the Shares to be admitted to trading on AIM and is therefore proposing the Cancellation.

Pursuant to Rule 41 of the AIM Rules, the Cancellation is conditional on the approval of not less than 75 per cent. of the votes cast by Shareholders (whether present in person or by proxy) at the Extraordinary General Meeting ("EGM").

If the Resolution is approved at the EGM, it is expected that the Cancellation will become effective at 7.00 a.m. on 30 December 2019.

EXPECTED TIMETABLE OF EVENTS

Announcement, posting of Circular and Notice of EGM 7.00 a.m. on 27 November 2019

Latest time and date for receipt of Form of Instruction 3.00 p.m. on 12 December 2019

Latest time and date for receipt of Form of Proxy 3.00 p.m. on 13 December 2019

Time and date of EGM 3:00 p.m. on 17 December 2019

Latest time and date for dealings in Ordinary Shares

prior to Cancellation 4.30 p.m. on 27 December 2019

Cancellation of trading to AIM effective 7.00 a.m. on 30 December 2019

Extraordinary General Meeting

The EGM will be held on 17 December 2019 at the offices of Maples and Calder, Ugland House, George Town, Grand Cayman, KY1-1104.

The Resolution will be an extraordinary resolution requiring at least 75 per cent. of the voting rights cast at the EGM to be in favour of the Resolution that the admission of the Shares to trading on AIM be cancelled.

REASONS FOR THE CANCELLATION

The Directors believe that Cancellation is in the best interests of the Company and its Shareholders as a whole. In reaching this conclusion, the Directors have considered the following key factors:

·; The Company is now considered to be a cash shell for the purposes of the AIM Rules and, in order to maintain the trading of its shares on AIM, the Company is required to acquire a new business or businesses. The Board has concluded, particularly given the Company has, in accordance with its investment policy, returned all available funds to Shareholders, that such a course of action is neither feasible or desirable.

·; The current investment objective and policy of the Company (to realise its investments in an orderly fashion and return the net proceeds to Shareholders) has been substantially achieved.

·; The considerable cost, management time and the legal and regulatory burden associated with maintaining the admission of the Shares to trading on AIM are now, in the Boards opinion, disproportionate to the benefits to the Company. In addition to seeking the Cancellation, which will deliver direct cost reductions for the Company from ceasing the obligation to pay London Stock Exchange and related fees, additional reductions in operating costs are expected, which are set out in paragraph 5. The Board estimates that the reduction in operating costs following the Cancellation and the other changes will amount to, in aggregate, approximately USD 250,000 annually.

THE COMPANY AND ITS REMAINING ASSETS AND LIABILITIES

The Company's assets currently consist of cash and two investments which the Company has valued at USD nil.

Vital Renewable Energy Company ("VREC") is the owner of a sugar-cane based facility in Brazil, which produces ethanol and refined sugar. The Company has a minority interest. The Company's interest is very illiquid in a depressed market for similar situated plants. There has been very limited merger activity. Additionally, the Company's interest is subject to several restrictions on transfer.

The Company also has an investment in Energia Escalona, a hydroelectric project development company based in Mexico City. Development activities are substantially complete but the market for electricity in Mexico has dramatically decreased over the past two years.

The Company's biggest uncertainty is its tax position. The Company needs information from third parties which should be forthcoming in the first quarter of 2020. After that information is received, the Company will file its final US federal tax return and seek expedited review from the Internal Revenue Service of the United States. Additionally the Company may purchase an insurance product to limit the Company's exposure to further tax liability.

The Company's current cash position is £3.8 million. The Company's best estimate of further costs and liabilities is £1.9 million for additional tax liability in respect of the gain on the court-ordered redemption of Leaf's stake in Invenergy, £0.6 million for running costs through completion of the wind down, and £1.3 million for costs relating to preparing for and completing the liquidation of the Company including the purchase of a tax related insurance product.

Once the tax situation has been resolved, the Board intends to seek Shareholder approval to the liquidation of the Company and remit any surplus funds to shareholders.

REDUCTION IN OPERATING COSTS FOLLOWING CANCELLATION

As the Company's net assets have declined, the Board has gradually reduced the Group's operating costs. As of the date hereof, the Company held cash net of liabilities of USD4.86 million and investments with an estimated net asset value of USD nil.

Conditional on the Cancellation becoming effective, the Company will benefit from direct cost reductions as there will be no further obligation to pay London Stock Exchange and related fees, including nominated adviser and broker fees.

Conditional on the Cancellation becoming effective, additional operating cost reductions are expected from:

·; Reduction in service provider fees. Conditional on the Cancellation becoming effective, the fees payable to the Administrator and other third party service providers will reduce.

·; Simplified oversight and out-of-pocket expenses. It is the intention that the Company will no longer produce and publish a quarterly NAV, quarterly newsletters, half-yearly reports and financial statement. Annual financial statements and information on significant events and developments relating to the Company will be available to all Shareholders solely through the Company's website. Corporate documents will no longer be available to Shareholders in printed form. The Directors will be paid reduced annual fees but will also be paid an hourly fee for services rendered to the Company. The Company will cease to have any employees and will not lease any real estate.

The Board estimates that the aggregate reduction in operating costs following the Cancellation will amount to approximately USD 250,000 annually.

Following the Cancellation, the Company will continue to maintain its website http://www.leafcleanenergy.com through which it will make annual financial statements available to all Shareholders and provide information on significant events and developments relating to the Company. However, there will be no obligation on the Company to include all of the information required by AIM Rule 26 or to update the website as required by the AIM Rules.

Following the Cancellation becoming effective, the Company will maintain appropriate corporate governance and oversight. The Company will also remain subject to the provisions of the Articles, pursuant to which Shareholder approval is required for certain matters.

PRINCIPAL EFFECTS OF THE CANCELLATION

The principal effects of the Cancellation include:

• There will be no formal market mechanism enabling the Shareholders to trade Shares and no other recognised market or trading facility is intended to be put in place to facilitate the trading of the Shares.

• While the Shares will remain freely transferrable, it is likely that the liquidity and marketability of the Shares will, in the future, be significantly reduced and the secondary market value of the Shares may be adversely affected as a consequence. If Shareholders wish to transact in their Shares following Cancellation, they may contact the Company to explore the possibility of off-market transactions, although given the lack of a trading platform following Cancellation, the Company may not be in a position to facilitate any such transactions.

• In the absence of a formal market and quote, it will be more difficult for Shareholders to determine the market value of their investment in the Company at any given time. There is no guarantee i) that Shareholders will be able to realise their investment prior to the winding-up of the Company; or ii) of the future value of the Company's remaining investments; or iii) of the price at which Shares may be bought or sold.

• The regulatory and financial reporting regime applicable to companies whose shares are admitted to trading on AIM will no longer apply to the Company. Shareholders will no longer be afforded the protections provided by the AIM Rules and the Market Abuse Regulation, such as the requirement to be notified of certain events, or to vote on certain substantial transactions. In particular, the Company will not be bound to make any public announcements of material events, or to announce financial results, although, following the Cancellation, the Company will continue to maintain its website, through which it will make available certain information, as set out in paragraph 4 above.

• In order to reduce the operating costs as a private company, following the Cancellation, the Company will no longer produce and publish quarterly newsletters or half-yearly reports and financial statements. Shareholders should be aware that in voting in favour of the Resolution they will also, in effect, be voting in favour of this policy.

• The levels of transparency and corporate governance will not be equivalent to those for a company quoted on AIM.

• The Company will cease to have an independent nominated adviser and broker.

• Whilst the Company's CREST facility will remain in place immediately following the Cancellation, the Company's CREST facility may, if the Board so determines, be cancelled in the future in order to save the associated costs. Although under such circumstances the Shares will remain transferable, they will cease to be transferable through CREST. In this instance, Shareholders who hold Shares in CREST will receive share certificates.

• The Cancellation may have taxation consequences for Shareholders. Shareholders who are in any doubt about their tax position should consult their own professional independent tax adviser.

The Directors are aware that certain Shareholders may be unable or unwilling to hold Shares following the Cancellation. Such Shareholders should consider selling their Shares in the market prior to the Cancellation.

If Shareholders wish to buy or sell Shares on AIM they must do so prior to the Cancellation. If Shareholders approve the Cancellation, it is expected that the last day of dealings in the Shares on AIM will be 27 December 2019 and that the effective date of the Cancellation will be 30 December 2019. The Board is not making any recommendation as to whether or not Shareholders should buy or sell Shares.

Effect on the Company should the Cancellation not be approved

If the Resolution is not approved at the EGM and the Cancellation is not approved, the admission of the Shares to trading on AIM will be maintained. However, unless the Company makes an acquisition or acquisitions within six months that constitute a reverse takeover for the purposes of the AIM Rules, it is likely that AIM will suspend trading in the Shares.

Process for Cancellation

Under the AIM Rules, it is a requirement that the Cancellation must be approved by not less than 75 per cent. of votes cast by Shareholders at an extraordinary general meeting. Accordingly, the Notice of Extraordinary General Meeting set out in Part 2 of the Circular contains an extraordinary resolution to approve the Cancellation.

Furthermore, Rule 41 of the AIM Rules requires any AIM company that wishes the London Stock Exchange to cancel the admission of its shares to trading on AIM to notify shareholders and to separately inform the London Stock Exchange of its preferred cancellation date at least 20 business days prior to such date. Additionally, Cancellation will not take effect until at least 5 clear business days have passed following the approval of the Resolution.

In accordance with AIM Rule 41, the Company (via its Nominated Adviser) has notified the London Stock Exchange of the Company's intention, conditional on the Resolution being approved at the EGM, to cancel the Company's admission of the Shares to trading on AIM on 30 December 2019. If the Resolution is approved, the Cancellation will become effective at 7.00 a.m. on 30 December 2019. After the Cancellation becomes effective, the appointment of the Nominated Adviser will cease and the Company will no longer be required to comply with the AIM Rules.

For further information please contact:

Mark Lerdal +1 (415) 264-5096

Leaf Clean Energy Company

Nicholas Wells/Callum Davidson +44 (0) 207 397 8980

Cenkos Securities plc