25 Jun 2018 07:00
This announcement contains inside information defined in Article 7 of the EU Market Abuse Regulation No 596/2014 and has been announced in accordance with the Company's obligations under Article 17 of that Regulation.
25 June 2018
LEAF CLEAN ENERGY COMPANY
REDEMPTION ANNOUNCEMENT
In accordance with the Special Resolution passed by the requisite majority at the Extraordinary General Meeting held on 1 July 2014 and the powers therein granted to the Board, the Company will return approximately £19.497 million to Shareholders, equivalent to 16.50 pence per Share by way of a compulsory redemption of a proportion of all Shareholders' holdings of Shares (the "Redemption").
Words and expressions defined in the Circular posted to shareholders on 11 June 2014 (the "Circular") shall, save where the context requires otherwise, have the same meaning where they are used in this announcement.
The Redemption Price per Share shall be 29.72 pence (by reference to the Leaf Board's estimate of the NAV per Share as at 31 May 2018). The Redemption will be effected pro rata to holdings of Shares on the register at the close of business on the Redemption Record Date being 4 July 2018. Approximately 55.51% of the Company's issued share capital will be redeemed on the Redemption Date (that is 55.51 Shares for every 100 Shares held (the "Relevant Percentage"). Fractions of Shares will not be redeemed and so the number of Shares to be redeemed for each Shareholder will be rounded down to the nearest whole number of Shares.
As a result of the Company's receipt of US$36.4 million (approximately 23.2 pence per share) from Invenergy in relation to the court-ordered redemption by Invenergy of Leaf's stake in Invenergy, as previously announced on 15 June 2018, the Company currently has approximately £28.2 million in uncommitted cash. The Company plans to use £5.6 million of this cash to pay off the shareholders loan, the deferred fees of Company counsel in relation to the Invenergy lawsuit, a contingent fee owed to Company's financial advisor in relation to the previously announced redemption of Leaf's Invenergy stake, and incentives plans payments in relation to this Redemption. Following the Redemption, and the aforementioned payments, the Company will have £3.1 million in uncommitted cash, The Board intends to maintain sufficient cash balance to meet its costs throughout the previously announced appeal of the Delaware Chancery Court's (the "Court") ruling on Leaf's claim against Invenergy and the completion of the realisation programme and will consider further returns of capital in the event of further receipts from the Invenergy lawsuit or from further disposals.
The Company currently has 118,162,853 Shares in issue of which none are held in treasury. All of the Shares redeemed on the Redemption Date will be cancelled. A further announcement will be released following the Redemption Date to confirm the new number of Shares in issue.
The Shares will be disabled in CREST on the Redemption Date and the existing ISIN, KYG541351196 (the "Old ISIN"), will expire. A new ISIN, KYG541351279, in respect of the remaining Shares which have not been redeemed (the "New ISIN") will be enabled and available for transactions from and including the first Business Day following the Redemption Date. Up to and including the Redemption Date, Shares will be traded under the Old ISIN and as such, a purchaser of such Shares will have a market claim for a proportion of the redemption proceeds. CREST will automatically transfer any open transactions as at the Redemption Date (which is the record date for the purposes of the Redemption) to the New ISIN.
Payments of redemption proceeds are expected to be effected either through CREST (in the case of Shares held in uncertificated form) or by cheque (in the case of Shares held in certificated form) by 10 July 2018. Shareholders will be paid their redemption proceeds in Sterling.
EXPECTED TIMETABLE
Redemption Announcement date 25 June 2018
Redemption Date 04 July 2018
Redemption Record Date 04 July 2018
expiry of Old ISIN 04 July 2018
New ISIN enabled, CREST Accounts credited 05 July 2018
Payment of proceeds date 10 July 2018
CERTAIN POST-REDEMPTION ACTIVITIES OF THE COMPANY
As previously announced the Company has appealed the Court's award of nominal damages on its affirmative claims against Invenergy. The Company continues to believe it is entitled to damages of US$122.2 million plus pre-judgment interest. Taking into account the amount already received from Invenergy, this would represent at least an additional US$85.8 million or 54.6 pence per pre-Redemption share.
Whilst the Company believes it is entitled to the damages noted above it is the case that if the Company was unsuccessful in its appeal then the Company would receive additional amounts due under the put/call process previously described in Chairman's statements. The Company believes it would be due US$50.7 million less the amount already received from Invenergy of US$36.4 million being 12.1 pence per pre-Redemption share.
Invenergy has indicated that it is likely to contest the US$50.7 million amount and the trial court has ordered Invenergy to place US$15.3 million, representing the disputed amount plus one year of interest, in a court-controlled account pending resolution of these matters.