PPG.L Regulatory News (PPG)

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

Plutus PowerGen Plc / Ticker: PPG / Index: AIM

1 April 2020

PLUTUS POWERGEN PLC

("Plutus" or the "Company")

Corporate Update

Plutus PowerGen PLC (AIM: PPG), the AIM quoted power company focused on the development and operation of flexible energy generation ("FlexGen") projects and gas-powered generation sites ("peakers") in the UK, today provides an update for shareholders.

Corporate update

Since the shareholder meetings held on 12 January 2020 the Company, together with industry-expert consultants, has been remodelling the economics of numerous potential gas sites with a view to establishing a supportable attractive IRR, which Plutus could then take to potential equity and debt funders of shovel ready gas sites.

Unfortunately, the Company has been unable to project or model satisfactory returns from or source funding with those returns. As such, the Directors have concluded that seeking funding for new gas sites and appointing a new operations team, including an operations director to the board of the Company, are now untenable and the Board have decided to no longer pursue a strategy of developing gas sites.

Consequently, the Company has no ongoing operations or revenue generation but continues to hold interests in the existing FlexGen sites which comprise of a 44.5% carried interest in each of the nine 20MW co-owned FlexGen companies. These are being marketed for sale by Jones Lang Lasalle and continue to operate independently of the Company.

Update on funding position

As previously announced on the 22nd January 2020 (the "January Announcement"), the Company entered into a loan agreement with Charles Tatnall (Executive Chairman) and James Longley (Interim Chief Executive Officer and Chief Financial Officer) (together the "Lenders") for an unsecured loan facility (the "Loan") of up to £150,000 (the "Loan Agreement"). The Loan was put in place to alleviate the Company's working capital position and the Loan was to be provided in equal amounts from each of the Lenders. The Loan was to be drawn down in four equal tranches on a monthly basis with the first draw down occurring by 31 January 2020. As outlined in the January Announcement the loan agreement stated that the arrangement could be terminated at any time by either the Company or the Lenders without obligation. Following the entering into of the Loan Agreement the Company announced that it expected to be able to meet its liabilities as they fell due until mid-May 2020.

As of today's date the Company has received £75,000 of the Loan in accordance with the terms of the Loan Agreement, being the first two loan tranches of £18,750 from each lender. As previously announced the Loan has been used to meet the Company's short-term working capital requirements.

The Company was informed on 31 March 2020 that the Lenders are suspending the provision of further funds to the Company under the Loan Agreement due to the foregoing change of circumstances as detailed in the corporate update above.

As outlined in the January Announcement in the absence of the funds due pursuant to the Loan, the Company would be required to raise further funds from other sources to address the Company's working capital position and at the time of the January Announcement the Board was confident that the Company would be able to raise further funds in addition to the Loan to enable the Company's debts to be paid as they fall due.

Given the absence of funds due under the Loan Agreement and the lack of immediate prospects for further funding for the Company in its current form, for the reasons outlined in this announcement, there is now significant uncertainty regarding the Company's working capital position. The amounts received pursuant to the Loan have been utilised for short-term working capital requirement and to settle outstanding trade creditors.

As at the date of this announcement the Company has negligible cash resources and trade creditors totalling over £100,000. The Company is dependent on the ongoing cooperation and support of its creditors to manage its working capital position. The Company is exploring other alternatives to provide the Company with funding.

As outlined above, the Board is also currently considering, in conjunction with Rockpool Investments LLP, the disposal of all the Company's investments which comprise of a 44.5% carried interest in each of the nine 20MW co-owned FlexGen companies, which are being marketed for sale by Jones Lang Lasalle. Additionally, the Company retains a receivable of c.£650,000 in unpaid management fees from the aforementioned companies.

In accordance with AIM Rule 15, any such disposal would constitute a fundamental change of business of the Company as the Company would cease to own, control or conduct all or substantially all, of its existing trading business, activities or assets. Such a disposal would be subject to, inter alia, shareholder approval. The Board are also currently giving consideration to hiving out the remaining assets of the Company, including the interests in the co-owned FlexGen sites, into a newly incorporated private company which would be owned by the Company's shareholders on a basis pro rata to their existing shareholding in the Company. It is the Board's intention, should they decide to pursue this route, that this would take place concurrently with a prospective acquisition or reverse takeover of the Company.

At this stage no agreement has been reached on the terms of any potential disposal of the Company's existing operations or any other transaction and there is no certainty that any such agreements or transactions will be entered into nor on the terms or timing of such a potential disposal or other transactions.

Should the Company proceed with a disposal of all or materially all of its existing operations, the Company would subsequently become an AIM Rule 15 cash shell and as such will be required to make an acquisition or acquisitions which constitutes a reverse takeover under AIM Rule 14 (including seeking re-admission as an investing company (as defined under the AIM Rules) on or before the date falling six months from shareholder approval of the Disposal or be re-admitted to trading on AIM as an investing company under the AIM Rules (which requires the raising of at least £6 million of new equity funding) failing which, the Company's new ordinary shares would then be suspended from trading on AIM pursuant to AIM Rule 40.

The Company is reviewing potential investment opportunities and will provide updates at the appropriate time with regards to the future operations and funding of the Company.

ENDS

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