17 Jun 2019 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.
17 June 2019
Leaf Clean Energy Company Final Delaware Chancery Court Judgement in Invenergy Lawsuit
This announcement provides an update to the Company's 3 May 2019 announcement.
As previously announced, the Delaware Supreme Court ("Supreme Court") issued its opinion in Leaf Invenergy Company, LLC v. Invenergy Wind LLC, C.A. No. 308, 2018 (the "Invenergy Lawsuit"), reversing the Delaware Court of Chancery's ("Chancery Court") prior award of US$1 in nominal damages to Leaf as a result of Invenergy Renewables LLC's (formerly known as Invenergy Wind LLC) ("Invenergy") breach of the parties' limited liability company agreement. The Supreme Court held that Leaf was entitled to damages in the full amount of its contractually defined Target Multiple and, therefore, remanded the matter back to the Chancery Court to enter judgement consistent with its decision.
On June 14, 2019, the Chancery Court entered its final order and judgement, ordering Invenergy to pay Leaf US$114.5 million, consisting of: a) the contractually defined US$126.1 million Target Multiple Invenergy should have paid Leaf on 15 December 2015 to redeem Leaf's ownership interest in Invenergy, less b) the previously announced US$3.9 million tax distribution Invenergy made to Leaf in January 2016, less c) the previously announced US$36.4 million partial redemption payment Invenergy made to Leaf pursuant to the Chancery Court's final order of 14 June 2018, plus d) $28.8 million of statutory pre- and post-judgement interest, within 10 calendar days of the order. This amount will continue to accrue statutory interest from 3 May 2019 at a rate of 8.0%, compounded quarterly until the award has been paid by Invenergy.
Taking into account the above award, the Leaf Board's unaudited estimate of Net Asset Value per share at 31 May 2019 using US$115.7 million as the value of the receivable due from Invenergy in respect of the redemption of Leaf ownership interest in Invenergy plus interest thereon through 14 June 2019 (and adjusting for certain related liabilities) is equal to US 191.99 cents (152.10 pence per share at the current exchange rate). While the board understands Leaf's tax provision to be sensible, based on advice from its tax counsel, given the inherent uncertainties in the positions that might be taken by the US tax authorities, especially in light of current unresolved regulations in relation to the recently enacted Tax Cuts and Jobs Act, and the timing of the resolution of these uncertainties, net amounts realised may differ materially from the board's estimate. The NAV does not take into account an estimate of the remaining costs to get the Company to the point where the board would choose to place it into liquidation nor liquidation costs. The timing for this is uncertain as it is largely dependent on resolving tax matters, but the board hopes this is achieved by the end of 2019.
The Leaf Board will revert to the shareholders on the redemption process and timing when the amounts have been received from Invenergy.
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