Proton Mtr Pwr Regulatory News (PPS)

29 Apr 2009 18:17



Proton Power Systems plc

("Proton Power" or the "Company")

Director shareholding and convertible loan agreement

Director Shareholding

Proton Power (AIM: PPS), the designer, developer and producer of fuel cells and fuel cell electric hybrid systems, announces that it has been notified today that Roundstone Properties Ltd ("Roundstone Properties"), a company connected to Dr. Faiz Nahab, yesterday purchased 6,281,769 ordinary shares of 5p each in the Company ("Ordinary Shares"), representing approximately 7.7 per cent. of the Company's issued share capital, at 2 pence per share.

Following this purchase, Roundstone Properties now owns 44,281,769 Ordinary Shares representing approximately 54 per cent. of the Company's issued share capital.

Convertible Loan

In addition, Proton Power announces that, further to its announcement of 23 December 2008, it has agreed with Roundstone Properties to accept its surrender of the warrants issued in February 2009 in respect of 30,000,000 Ordinary Shares and exercisable at 5 pence per Ordinary Share and instead to enter into a new convertible loan facility with Roundstone Properties of up to £1.5 million (the "Convertible Loan") of which £0.5 million is proposed to be drawn down shortly (the "First Tranche").

The Convertible Loan is repayable by 30 June 2012 and is convertible into up to 75,000,000 new ordinary shares in the capital of the Company at an exercise price of 2 pence per share, the issue of which is subject to a share capital re-organisation and obtaining the requisite approvals from shareholders at the Company's Annual General Meeting to be held in July 2009 ("Resolutions"). If the Resolutions are passed, the First Tranche will automatically be converted into new ordinary shares in the capital of the Company of such nominal value as shall result from the share capital re-organisation previously referred to ("New Shares"). Thereafter, the Convertible Loan may be converted into New Shares at Roundstone's election. However, if the Resolutions are not passed, Roundstone has the right to demand immediate repayment of the First Tranche and withdraw all further loan facilities in respect of the Convertible Loan.

The Convertible Loan will attract no interest if settlement is made by way of the issue of New Shares. However, if by mutual agreement part of the loan is repaid in cash rather than converted to shares at 2 pence per share, then this portion will be deemed to have attracted interest equivalent to 10% per annum.

Related Party Transaction 

Roundstone Properties is a company connected to Dr. Faiz Nahab, a non-executive director of the Company, and is also a substantial shareholder (as defined in the AIM Rules) of the Company. The entering into the Convertible Loan facility with Roundstone is therefore classified as a transaction with a related party for the purposes of the AIM Rules. In accordance, therefore, with the AIM Rules, the directors of the Company, with the exclusion of Dr. Faiz Nahab, having consulted with the Company's nominated adviser, Arbuthnot Securities Limited, consider that the terms of the transaction are fair and reasonable insofar as the Company's shareholders are concerned.

The City Code on Takeovers and Mergers

Proton is a public limited company registered in England; however, as the Company does not have its central place of management and control in the UK, the City Code on Takeovers and Mergers does not apply to the Company. 

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Notes to Editors 

Proton Power Systems plc is a developer and manufacturer of fuel cells and fuel cell hybrid systems for motive and stationary power supply. Its sales-driven strategy focuses on identifying applications with the greatest market needs and supplying large volumes of cost-competitive systems to fulfil those needs. Proton is targeting a global opportunity, accessing a broad range of markets through partnerships with leading OEMs such as Skoda Electric and Karmann.

Motive applications include forklifts, city buses, municipal utility vehicles and ferries; 'back-to-base' markets which can readily utilise the modularity and scalability of the Company's hydrogen fuel cell systems, and which do not depend on the existence of a ubiquitous hydrogen infrastructure, thereby facilitating swift commercialisation.

Stationary applications focus on the Uninterruptible Power Supply sector, where there is a large demand for mission-critical, grid-independent secure power supply in places such as telecommunications stations, data centres, hospitals, and power substations. Further market potential lies in industrial and chemical processing plants, where the otherwise wasted hydrogen by-product can be harnessed for producing local power. 

Through its wholly owned subsidiary, Proton Motor Fuel Cell GmbH ("Proton Motor"), the Group has developed and produced a fuel cell module that can be integrated with energy storage media to create a hybrid fuel cell system. A proprietary, intelligent energy management software balances the power output across the fuel cell storage unit(s) to maximise efficiency and improve power delivery. The system thus boasts lower fuel consumption and more consistent levels of power delivery than conventional diesel/combustion engine or fuel cell-only systems, in addition to producing zero harmful emissions. 

Proton Power Systems plc was admitted to trading on AIM on 31 October 2006 and is incorporated in the UK. Proton Motor has more than 15 years of experience in the fuel cell market and is located in Puchheim, near Munich, Germany, where its manufacturing facility is based.