Powerhouse Ener Regulatory News (PHE)

POWERHOUSE ENERGY GROUP PLC - Notice of AGM

PR Newswire

London, November 9

10 November 2015

PowerHouse Energy Group plc(“PowerHouse” or the “Company”)

Notice of Annual General Meeting, Proposed Capital Reorganisation& Proposed Grant of Share Options

PowerHouse Energy Group, plc announces that the Annual General Meeting (“AGM”) of the Company for the year to 31 December 2014 will be held at the offices of Allenby Capital Limited, 3 St Helen’s Place, London EC3A 6AB at 10.00 a.m. on 3 December 2015. Notice of the AGM has been sent to all shareholders today, a copy has also been posted on the Company’s website and full details of the resolutions proposed is set out below. Amongst the resolutions is a proposed capital reorganisation and grant of share options to the directors of the Company. 

For additional information please contact:

PowerHouse Energy Group plcKeith Allaun +1 352 226 8644/+44 7887 588 941

Allenby Capital Limited (Nominated Adviser and Broker)Nick Harriss/David Hart +44 (0) 20 3328 5656 

Notice of Annual General Meeting 

1. Introduction

Notice of the 2015 Annual General Meeting of the Company is set out at the end of this document. The audited accounts of the Company for the year ended 31 December 2014 were sent to Shareholders on 30 June 2015 and are also available for download on the Company's website at www.powerhouseenergy.net.

The purpose of this document is to provide you with the background to the Capital Reorganisation and the other resolutions to be proposed at the AGM, and to explain why the Directors consider them to be in the best interests of the Company and the Shareholders as a whole, and why the Directors recommend that Shareholders should vote in favour of the resolutions at the AGM. Further details on the resolutions are set out below.

2. Hillgrove

As announced on 30 June 2015 and as set out in the Chairman’s statement in the audited accounts for the year ended 31 December 2014, the Company agreed on 26 June 2015 to certain changes in the terms of the convertible loan note granted to Hillgrove in July 2012, providing inter alia that the conversion price for the entire convertible loan note be changed from 1p per share to 0.5p per share. This and other changes were required by Hillgrove in consideration for the provision of a letter of comfort to the Company confirming that Hillgrove is willing to continue to provide adequate financial support to ensure that the Company can meet its obligations as they fall due and that it can operate as a going concern for at least 12 months from 30 June 2015, pending any unforeseeable or material changes to the Company’s current circumstances.

If at any time Hillgrove was to withdraw its ongoing support for the Company, it is likely that the Company would have insufficient funds to continue, and the Company would no longer be a going concern. In addition, if Shareholders do not approve resolution 5 at the AGM to effect the Capital Reorganisation, necessary to give effect to the change in conversion price outlined above, this may also lead to HIllgrove withdrawing its financial support. The Directors unanimously strongly recommend that Shareholders vote in favour of resolution 5 at the AGM.

3. Proposed Capital Reorganisation

The CA 2006 prohibits the Company from issuing ordinary shares at a price below their nominal value. As described above, it is necessary to reduce the nominal value of the Ordinary Shares in order to afford Hillgrove the ability to convert its loan into equity in the Company. In addition, as the Company’s current share price is relatively close to the nominal value, the Directors consider that it will facilitate the acquisition of additional funding from Hillgrove and/or other potential investors if the nominal value is reduced.

Accordingly, it is proposed that each of the Existing Ordinary Shares of 1p be sub-divided into one New Ordinary Share of 0.5p and one Deferred Share of 0.5p, such Deferred Shares having the rights and being subject to the restrictions attached to them as set out in the Articles.

The New Ordinary Shares will continue to carry the same rights as are attached to the Existing Ordinary Shares.

The Deferred Shares will not entitle the holders of them to receive notice of or to attend or vote at any general meeting of the Company, or to receive any dividend or other distribution. On a return of capital on a winding up or dissolution of the Company, the holders of the Deferred Shares shall be entitled to receive an amount equal to the nominal amount paid up thereon, but only after the holders of the Ordinary Shares have received the aggregate amount paid upon on them plus £100 per Ordinary Share. The holders of Deferred Shares are not entitled to any further right of participation in the assets of the Company. The Company shall have the right to purchase the Deferred Shares in issue at any time for no consideration. As such, the Deferred Shares effectively have no value. Share certificates will not be issued in respect of the Deferred Shares, and they will not be admitted to trading on AIM.

Under the Capital Reorganisation, if approved, each Shareholder will receive the same number of New Ordinary Shares as they hold in Existing Ordinary Shares, without any diminution in rights. The Capital Reorganisation should not, of itself, affect the market value of a Shareholder’s aggregate holding of shares in the capital of the Company.

Application will be made for the New Ordinary Shares to be admitted to trading on AIM. It is expected that Admission will come effective and that dealings in the New Ordinary Shares will commence on 4 December 2015. The ISIN and SEDOL numbers for the New Ordinary Shares will be the same as for the Existing Ordinary Shares, being GB00B4WQVY43 and B4WQVY4 respectively.

Share certificates and CREST entitlements

If you hold your Existing Ordinary Shares in certificated form, your existing share certificate will remain valid, with reference in any share certificate to a nominal value of 1p being deemed to be a reference to a nominal value of 0.5p. If you hold your Existing Ordinary Shares in uncertificated form, the description of the shares held in your CREST account will be updated accordingly. Shareholders will not be issued with a share certificate in respect of the Deferred Shares.

If you are in any doubt with regard to your current holding of Existing Ordinary Shares or the number of New Ordinary Shares or Deferred Shares which you will hold following the implementation of the Capital Reorganisation, you should contact the Company’s Registrars, Neville Registrars Limited on 0121 585 1131 (calls to this number will be charged at your standard network rate) or from overseas on +44 121 585 1131. Calls from outside the UK will be charged at the applicable international rates. Lines are open from 9.00 a.m. to 5.00 p.m. on business days (ie Monday to Friday excluding public holidays). Different charges may apply to calls made from mobile telephones and calls may be recorded and randomly monitored for security and training purposes. Please note that Neville Registrars cannot provide investment advice, nor advise you on how to cast your vote on the Resolutions.

4. Authorities to allot securities

At the Annual General Meeting, Shareholders are being asked to renew the Directors’ authorities to allot shares in the Company. Resolution 6 (an ordinary resolution) at the AGM will, if passed, give the Directors general authority to allot ordinary shares up to a maximum nominal amount of £3,250,000, (representing approximately 167% of the issued ordinary share capital of the Company following the Capital Reorganisation). The authority will expire at the conclusion of the AGM of the Company to be held in 2016 or, if earlier, 15 months from the date of the resolution.

Resolution 7 (a special resolution) at the AGM will, if passed, give the Directors general authority to allot ordinary shares for cash, either by way of a rights issue or offer to existing shareholders or to other persons on a non pre-emptive basis, providing that such authority is limited to a maximum nominal amount £3,250,000 (representing approximately 167% of the issued ordinary share capital of the Company following the Capital Reorganisation).

The authorities given by resolutions 6 and 7 will allow for the conversion of the convertible loan notes held by Hillgrove, for the grant of options to Directors as described below, and will provide additional headroom to enable the Company to take advantage of further fundraising opportunities in due course.

5. Grant of options

It is proposed that options to subscribe for up to 15 million New Ordinary Shares will be granted to the Directors, recognising that Directors’ fees which have not been paid for a number of years. It is proposed that such options would vest immediately and be exercisable for up to 5 years at an exercise price of 0.75p per share, which is 50% above the conversion price for the convertible loan notes held by Hillgrove. It is proposed that the options will be granted as follows:

Keith Allaun 6 million options

Brent Fitzpatrick 5 million options

James Greenstreet 4 million options

The granting of the proposed options constitutes a related party transaction for the purposes of Rule 13 of the AIM Rules for Companies. As all the Directors are being granted options under the proposals, there are no Directors who are independent for the purposes of providing the statement required under Rule 13 of the AIM Rules for Companies. Allenby Capital Limited, the Company’s Nominated Adviser, considers that the terms of the grant of options are fair and reasonable insofar as Shareholders of the Company are concerned. The granting of the options to the Directors is being proposed as resolution 8 at the Annual General Meeting in order for shareholders to approve this, and no option will be granted to the Directors unless Shareholders approve resolution 8. The grant of options will also be conditional upon the passing of resolutions 5, 6 and 7.

6. Annual General Meeting

The Annual General Meeting of the Company will be held at the offices of Allenby Capital Limited at 3 St Helen’s Place, London EC3A 6AB at 10.00 a.m. on 3 December 2015, at which the following resolutions will be proposed:

1. (a) Resolution 1: to approve the annual report and accounts. The Directors are required to lay before the Company at the AGM the accounts of the Company for the financial year ended 31 December 2014, the report of the Directors and the report of the Company's auditors on those accounts.

2. (b) Resolution 2: to approve the re-appointment of Deloitte LLP as auditors of the Company. The Company is required to appoint auditors at each general meeting at which accounts are laid, to hold office until the next such meeting.

3. (c) Resolution 3: to approve the remuneration of the auditors for the next year.

4. (d) Resolution 4: to approve the re-election of Keith Allaun who is retiring by rotation, and is submitting himself for re-election. Under the Articles of Association, Directors must retire and submit themselves for re-election at the annual general meeting once very three years.

5. (e) Resolution 5: to approve the Capital Reorganisation, as described above.

6. (f) Resolutions 6 and 7: to renew authorities to allot shares, as described above.

7. (g) Resolution 8: to approve the grant of options to Directors, as described above.

7. Action to be taken

Shareholders will find enclosed with this document a form of proxy for use at the Annual General Meeting, which should be returned by no later than 10.00 a.m. on 1 December 2015 for the AGM to be held on 3 December 2015.

Whether or not you intend to be present at the meeting, you are requested to complete, sign and return the form of proxy to the Company’s registrars, Neville Registrars Limited, Neville House, 18 Laurel Lane, Halesowen, West Midlands B63 3DA as soon as possible but, in any event, so as to arrive by no later than 48 hours before the time and date of the meeting. The completion and return of a form of proxy will not preclude you from attending the meeting and voting in person should you wish to do so.

8. Recommendation

The Directors consider the resolutions to be proposed at the Annual General Meeting to be in the best interests of the Company and its Shareholders as a whole and accordingly unanimously recommend that Shareholders vote in favour of those resolutions, as Brent Fitzpatrick intends to do in respect of the 103,459 Existing Ordinary Shares (equivalent to approximately 0.026 per cent of the Existing Ordinary Shares) beneficially owned by him.

Yours faithfully 

Robert Keith Allaun

Chairman

DEFINITIONS

The following definitions apply throughout this document, unless the context otherwise requires: