TEG.L Regulatory News (TEG)

23 Mar 2007 17:05

TEG Group (The) PLC23 March 2007 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTOTHE UNITED STATES OF AMERICA, CANADA, AUSTRALIA, THE REPUBLIC OF IRELAND, THEREPUBLIC OF SOUTH AFRICA OR JAPAN. Neither this announcement nor any copy of it may be taken, transmitted ordistributed, directly or indirectly, in or into the United States, Canada,Australia, the Republic of Ireland, the Republic of South Africa or Japan. Anyfailure to comply with this restriction may constitute a violation of UnitedStates, Canadian, Australian, Republic of South Africa, Republic of Ireland orJapanese securities laws. 23 March 2007 The TEG Group plc ("TEG" or the "Company") Placing of 10,000,000 New Ordinary Shares at a Placing Price of £1.10 per New Ordinary Share Notice of Extraordinary General Meeting 1. Highlights • Placing of 10,000,000 New Ordinary Shares at a price of £1.10 each; • Price represents a discount to the volume weighted average price since 29 January 2007, being the date of the GMW PFI Announcement, of 4.4%; • Placing over-subscribed with significant institutional demand and several new investors participating; • TEG is sub-contractor to the Viridor/Laing consortium that has been awarded preferred bidder status for the Greater Manchester Waste Disposal Authority PFI contract (the "PFI Contracts"); • Potential value of contracts to TEG up to £35 million; • Proceeds of fundraising to be used for funding of the potential PFI Contracts, for future TEG development projects and for expanding the sales and project development teams; • EGM seeking shareholder approval to be convened on 20 April 2007. The Company today announces that it is intending to raise up to approximately£11 million before expenses by way of an institutional placing of 10,000,000 NewOrdinary Shares at a price of £1.10 per New Ordinary Share. The Company willalso convene an EGM at which shareholder approval will be sought for authorityto issue shares in order to enable the Placing to take place. Contacts: The TEG Group plc Mick Fishwick, Chief Executive 01772 314100 Adventis Financial PR 020 7034 4760 / 020 7034 4758Peter Binns / Tarquin Edwards 07768 392 582 / 07879 458 364 Canaccord Adams Limited Robert Finlay/Chris Bowman 020 7050 6500 2. Background TEG was incorporated in 1995 and its ordinary share capital was admitted totrading on AIM in July 2004. The Company's principal activity is the design andproduction of specialised plant and equipment for the composting of organicwastes for sale to third party customers and in-house projects. The TEG SiloCage composting system is the result of over ten years of design and testing andTEG has now commissioned four plants in the UK. Legislation governing the treatment and disposal of organic waste isincreasingly stringent and drives the market for the TEG Silo Cage system andthe services that its process provides. In 2005, new legislation becameeffective relating to the disposal of animal by-products and the use oflandfills, increasing the Company's market in the organic waste recycling sectorin the UK. The Company earns revenues from both (i) gate fees for waste treatment and (ii)the sale of composting plants. As announced on 6 March 2007, the Company has reported a significant increase inits turnover from £555,250 (2005) to £3,559,330 (2006) and has achieved thefollowing: (i) the installation of the TEG plant at the Company's facility in Perth,Scotland has been completed and the transition from the existing technology wascompleted in Quarter 4 of 2006; (ii) the first line at the Company's facility at Sherdley Farm, Preston has beeninstalled and commissioned and the second line, with an additional capacity of7,000 tonnes, is expected to be completed by the second quarter of 2007; (iii) TEG has been named as a principal sub-contractor to the Viridor-Laingconsortium that has been awarded preferred bidder status for the GreaterManchester Waste PFI contract. Assuming financial close, TEG expects to be theexclusive supplier of IVC technology to the consortium in the Greater Manchesterregion; (iv) TEG completed the acquisition of the site at Todmorden, Yorkshire in May2006 and is developing one of the largest composting plants in the UK; (v) planning consent for the Company's facility in Kildare, Ireland was revisedand re-issued in January 2007 and contract terms have been agreed McCartneyContracting for waste supply and compost product placement; (vi) the Company has entered into a research and development project with ShellUK Limited to investigate opportunities for the composting of oil-based muddrill cuttings; (vii) the Company has completed the construction of a TEG Silo Cage plant forthe City and Council of Swansea and handover of the plant took place in February2007. The final invoiced contract value was £920,000; (viii) the Company has completed the construction of a TEG Silo Cage plant forBanham Compost Ltd and handover is expected to take place in March 2007; and (ix) the Company has been awarded a contract by Lancashire County Council whichhas created business for the TEG plant at Sherdley Farm, Preston. The Directors believe that the recent success of the Company has been driven bythe TEG System offering an attractive, efficient and cost-effective alternativeto landfill. It is also an attractive alternative to other forms of ABPdisposal, namely rendering, incineration and anaerobic digestion. 3. The TEG System The TEG Silo Cage system is a large-scale continuous-flow thermophiliccomposting plant that converts organic wastes into a natural organic fertiliser.By mixing appropriate waste streams in the correct ratio, conditions are createdfor rapid thermophilic composting activity. The design of the Silo-Cage Systemprovides an environment for vigorous composting. When the mixed waste isintroduced to the Silo Cage, the micro-organisms already present in the mixquickly multiply, generate high temperatures and rapidly degrade the waste. The composting process, which is a continuous-flow and essentially dry operationrequiring no mechanical turning, takes 12 to 14 days, during which time thetemperature of the process is continuously monitored by multiple probes. Theinsulated walls maintain the temperature within the cages, which each have anominal capacity of 600 tonnes per annum. The TEG Silo Cage consists of a bank of between 8 and 32 steel-framed cages withinsulated walls. Multiple banks of Silo Cages are supplied for large contracts.Each bank of Silo Cages is suspended in a rigid steel frame and is supplied viaa bio chopper mixer that feeds onto a conveyor loading mechanism, which evenlysupplies the calculated amount of compost mix to each silo on a daily basis.Composted product is removed from the base of the Silo Cage by an unloadingmechanism. As announced previously, a full scale waste composting plant has been developedby the Company at its demonstration plant at Sherdley Farm near Preston whichhas been operational since 2000. In November last year, the plant was validatedto process Category III ABP to the highest UK and EU standard. The ABP approvalrepresents the highest classification possible in the organic waste treatmentmarket and it allowed the Company to commercialise the Sherdley Farm facility,install new larger plants and generate revenues, whilst also creating theopportunity to open up larger markets for the Company. The Company has a pipeline of possible opportunities, including the sale ofplant, and several BOO projects. 4. Greater Manchester Waste PFI Contract As announced by the Company on 29 January 2007, TEG is the principalsub-contractor to the Viridor-Laing consortium that has been awarded preferredbidder status for the Greater Manchester Waste PFI contract. Costain Limited hasbeen retained to manage the construction projects on behalf of the consortiumand will be TEG's immediate customer. Assuming the consortium achieves financial close, TEG will be the exclusivesupplier of IVC technology to the consortium and will receive an order to supplyall the IVC capacity specified by the PFI contract. It is anticipated thatfinancial close will be completed by 1 June 2007 and that contracts will becomebinding at that point. The Company expects to be awarded contracts to build four plants over the periodfrom 2007 to 2010. The combined capacity of the plants will be 180,000 tonnesper annum, producing 125,000 tonnes of compost product per annum. It isenvisaged that the plants will all process green waste and kitchen wastecollected from households in the Greater Manchester region. Depending upon thefinal scope of supply, the total value of the construction projects to TEG couldbe up to £35 million over the period 2007 to 2010. The PFI contract is believed to be the largest waste management contract offeredto date in Western Europe. Total capital investment could be in excess of £300million and the overall contract value is projected to be £3 billion. 5. Todmorden BOO In May 2006, TEG acquired a freehold site in Todmorden, West Yorkshire for acost of £2 million. The Company has since completed the demolition of thebuildings on the site and completed the construction of a new building to housethe TEG plant and equipment. It is expected that the facility will beoperational by April 2007, considerably ahead of schedule. The facility will beone of the largest composting plants in the UK and the site has been grantedfull planning permission for a TEG IVC plant with a capacity of 50,000 tonnesper annum of waste feed. The Directors understand that this is the only site indevelopment with such planning permission within its Local Authority area(Calderdale) and neighbouring Local Authorities (Greater Manchester, Blackburnand Darwen). Market demand is extremely encouraging at this stage and to date negotiationsare currently under way with two Local Authorities (including CalderdaleCouncil) and numerous private sector food waste customers, both directly andthrough the Company's WRAP-funded relationship with Urban Mines Limited. Plant and equipment installation at the plant is underway and two lines are dueto become operational in April 2007 with a capacity of 25,000 tonnes per annum.The Company intends that a further two lines will become operational later in2007, bringing the total capacity to 50,000 tonnes per annum. 6. Recent Developments Perth Plant, Scotland As reported in 2005, the Company secured an 11 year contract to acquire therights to take over and develop a composting operation at a waste managementsite in Perthshire, Scotland. Two 32-cage lines have been constructed with ajoint capacity of 38,000 tonnes per annum and both lines are now operational.The site's principal customers are SITA UK Ltd (Local Authority service withPerth & Kinross Council), Binns Skips (collections from food manufacturers),Scot Loo and Grampian Foods. The Scottish Environment Protection Agency has granted TEG a PollutionPrevention and Control ("PPC") permit to carry out ABP composting activities atthe Perth plant. Due to the long lead time, the expense associated with PPCcompliance and the requirement under PPC for the operator to use Best AvailableTechniques in respect of the technology and its operation, the Directors believethat the application of the Pollution Prevention and Control (Scotland)Regulations to the type of activities carried on by the Company may represent asignificant barrier to competitors attempting to enter into markets governed bythe PPC regime. Sherdley Farm Plant, Preston Further to receiving validation to process Category III ABP to the highest UKand EU standard, the Company has upgraded the Sherdley Farm plant and the firstline was commissioned in February 2006 with a commercially available capacity ofapproximately 6,000 tonnes per annum. The Company has reserved some of the totalplant capacity for continued R&D activity for prospective customers. The Companyhas also completed a new maturation building and upgraded the infrastructure onthe plant. By securing contracts with Schwan's, H.J. Heinz and Greater Manchester Waste,the Company has confirmed demand for its waste disposal service and with thefirst line effectively full, the Company is now constructing a second line witha capacity of 7,000 tonnes per annum and anticipates this line being completedby the second quarter of 2007. Subject to planning consent, it is intended toupgrade the waste receipt building and install offices for plant and engineeringstaff. As disclosed previously in the Admission Document, the Company has occupied theland at Sherdley Farm for a number of years without documentation in place. Asat the date of this announcement, the Company awaits formal execution by thelandlord and Lancashire County Council of a deed of release to allow a lease tobe granted. The Directors believe that both the deed of release and the leasewill be executed shortly. Kildare Plant, Ireland The planning consent for the Kildare plant was revised and reissued to theCompany in January 2007, dated October 2006 and the Company is planning toupgrade the plant to ABP standard with a capacity of 15,000 tonnes per annum byJuly 2007. The Company will be installing new panels, upgrading materialhandling and improving the building to meet the planning conditions for ABPwaste streams at an estimated cost of £550,000. The Company now awaits the licence agreement from Kildare County Council toallow the development to proceed. In addition, the Company has agreed contract terms with McCartney Contractingfor the supply of waste and the placement of compost product. This will ensurethe facility is fully utilised and will ensure a secure outlet for compostproduct following approval by the regulator in Ireland, the Department ofAgriculture. Swansea As announced by the Company on 6 February 2007, TEG has completed theconstruction of the TEG Silo Cage plant for the City and County of Swansea. Theplant has been operating under TEG management since November 2006 and, followingtraining and mechanical completion, it was handed over to the City and County ofSwansea on 5 February 2007. The final invoiced contract value for TEG wasapproximately £920,000. TEG will continue to work closely with The City and County of Swansea and willlead the Authority in gaining State Veterinary Service ("SVS") approval for theplant, a process that is expected to be completed by the second quarter of 2007.TEG will provide a 12-month warranty period that commences after the SVSapproval is obtained. Banham The Company reported in July last year that Banham Compost Limited had placed anorder with TEG for the purchase and installation of two banks of 24 Silo Cagesfor approximately £1.7 million. In April 2006, Banham received planningpermission to operate an IVC facility at its Carleton Rode site in Norfolk witha capacity of 28,000 tonnes per annum. The final contract value was £1.75million. The installation of the plant was completed in December 2006 and commissioningof the first line began in December 2006. The final handover to the customer isscheduled for March 2007. Clayland's Corner The Company reported on 6 April 2006 that it had obtained planning permissionfor a composting facility at Clayland's Corner, Somerset. The Company has beenaddressing the pre-conditions of the planning permission and believes those willbe satisfied by April 2007. Development of the facility will commence thereafterand the Directors anticipate the site will be operating by August 2007. Theplanning permission is for an 8,100 tonnes per annum facility and the Companyintends to install an 18 Silo Cage plant. Other Arrangements (i) Research and Development Project with Shell UK Limited The Company has entered into a Research and Development Project with Shell UKLimited to investigate the opportunities for the composting of oil based muddrill cuttings from North Sea exploration activities using TEG Silo Cagetechnology. The contract is initially to trial bioremediation of oil-based mudcuttings and, if this is successful, the parties will consider further thecommercial potential to develop TEG Silo Cage plants for oil-based mud drillcutting processing. The R&D work will focus on bioremediation of oil based mud drill cuttings,which, if successful would convert a hazardous waste to a less hazardous endproduct which can be used as a beneficial product, such as landfill cover. The project is for Shell to fund research & development work by TEG followed byfull-scale trials at TEG's plant in Perth, Scotland. Macaulay EnterprisesLimited, the commercial arm of the Macaulay Institute and a specialistenvironmental consultancy and laboratory services company, will work with theparties assessing the products and potential end use opportunities. The laboratory work is complete and the pilot scheme is in progress in purposebuilt rigs at the TEG site in Perthshire. The Company expects the results of thepilot scale work to be available during Quarter 2 of 2007. (ii) Launch of Natural Organic Fertilizer Company Limited ("NOFCO") TEG launched a new marketing subsidiary, NOFCO, in January 2007 with the soleaim of developing new markets for compost products, both for the Company and forits customers. The beneficial use of compost products is key to all LocalAuthority contracts and TEG believes its expertise in this area will benefit itscustomers and give the Company a further competitive advantage. The Companyexpects to commence commercial scale crop growing trials near Sherdley Farm inApril 2007. 7. The Market Total waste in the UK is estimated at 360 million tonnes per annum, of which 118million tonnes is controlled and 42 million tonnes is potentially suitable forcomposting. By the year 2020, the UK target is that 25 million tonnes per annumof waste should have been diverted from landfill. An additional 1.6 milliontonnes of ABP is forecast to be entering the organic treatment market due toimplementation of ABP legislation. The Waste Resource Action Programme estimates the need for 450 composting plantsby 2020 for Local Authorities, with the increase in ABP providing opportunitiesfor over 100 plants. The National Audit Office conducted a study in July 2006into progress with landfill diversion in the UK. The study includesillustrations of increased composting and recycling requirements from which itis estimated that a further 1.1 million tonnes per annum of material willrequire composting by 2012, the equivalent to approximately 60 TEG plants. Inaddition, Defra has recently announced a revision to the PFI process for wastemanagement contracts and stated it expects increased deals in the sector,ramping up to a peak in 2010/11. Parallel to this increase in the requirement for facilities, it is estimatedthat the potential market for compost product is nine million tonnes, which theDirectors believe will support the development of up to 640 composting plants. Furthermore, gate fees are very attractive and the cost of landfill, thebenchmark for waste disposal, is rising sharply. Published prices for ABPdisposal are up to £82 per tonne, up to £55 per tonne for catering waste,between £21 and £29 per tonne for green waste, and an average of £47 per tonnefor landfill disposal. 8. Legislation Landfill Directive 1999 The Landfill Directive 1999 (1999/31/EC) was transposed into English law as theLandfill (England and Wales) Regulations 2002 and became effective on 15 June2002. The Directive requires significant reductions in the quantity ofbiodegradable municipal waste disposed of by landfilling and the prohibition ofthe disposal of hazardous and non-hazardous wastes in the same landfill. As partof the drive to comply with the Landfill Directive, the Government set mandatoryrecycling targets for local authorities. Set against a 1995 baseline, theLandfill Directive requires a reduction of 25 per cent. by 2010, 50 per cent. by2013 and 65 per cent. by 2020. Failure to meet the Landfill Directive targetswithin the next decade will result in the UK facing substantial fines from theEU. A penalty system was imposed in April 2005 pursuant to which LocalAuthorities may be fined £150 for every tonne landfilled beyond the limit set bythe Local Authority's allowance, and the Directors believe that such financialsanctions will most probably be passed on to Local Authorities and thencollected through Council Tax, and the threat of these sanctions will provide afurther catalyst for change. Regulation 11 of the Landfill (England and Wales) Regulations 2002 states that alandfill operator cannot charge a price per tonne of waste to be landfilledwhich is equivalent to less than the cost to the operator of operating thatlandfill site in respect of each tonne of waste. The result of this is that theprice of using landfill as a method of waste disposal is likely to become moreexpensive and the Directors believe that demand for the attractive, efficientand cost-effective TEG system will increase as a result. Furthermore, there are now limits on the amounts of biodegradable waste that canbe landfilled. These changes are in addition to the landfill tax, which hasincreased at a rate of £3 per tonne per annum since April 2005 and is expectedto rise by £8 per tonne per annum from April 2008, further increasing theattractiveness of recycling and composting options over landfill. Waste and Emissions Trading Act 2003 The Landfill Allowance Trading Scheme ("LATS") was implemented in April 2005under the Waste and Emissions Trading Act 2003. The purpose of LATS is toencourage recycling by the trading of recycling credits whereby LocalAuthorities that fail to achieve recycling and composting targets can buy excessrecycling capacity from those that have exceeded their targets. The price forrecycling credits will be market driven and is expected to fall between the costof recycling and composting, and the cost of fines implemented under theLandfill Directive, thus stimulating investment in additional recycling andcomposting facilities. Animal By-Products Regulations 2003 The EU Regulation concerning ABP became effective from 1 May 2003, and theregulation came into force in England and Wales on 1 July 2003 introducinghigher standards of treatment and banning the use of certain traditional methodsfor disposal. Given the outbreaks of human and animal disease which have focusedattention on the safety of the food chain, the need to protect againstpathogens, such as Salmonella, E Coli. 0157, and the need to protect againstanimal diseases, such as Foot and Mouth and Swine Fever, has become imperativein the Government's policy. It has become clear that traditional methods ofdisposal are unsafe and that organic wastes should be treated to a high standardso that they may safely be recycled to land. The EU Commission was thereforecharged with implementing further measures, including the approval ofalternative disposal methods. The Regulation bans the disposal of animalby-products including most food wastes to landfill, although temporarilycatering waste continued to be landfilled during a transition period which, withthe exception of a further derogation for some supermarket-type waste, ended inDecember 2005. The Company believes that the development and enforcement of environmentallegislation will continue to strengthen the Company's markets. However, whilstthe Company operates within and aims to comply with the current waste industryregulatory framework, there can be no assurance that such regulatory frameworkwill not change to the detriment of the Company. 9. Strategy The Directors remain committed to developing the business in three main areas: (i) Build Own and Operate projects BOOs provide sustainable, long-term revenues, and allow the Company to takeadvantage of rising waste disposal prices. Gate fees of just under £40 per tonnewill enable the Company to secure favourable returns with estimated revenues ofat least £1.3 million per annum for a plant with capacity of 35,000 tonnes. TheCompany currently has two BOOs in operation and a further three BOOs indevelopment. (ii) Plant Sales The Company sells plant to third parties who prefer to run their own wastedisposal operations. This area of the business provides large revenues to theCompany. A single bank of 28 cages is valued by TEG at over £1 million and theCompany has received interest in increasing the scope of supply to includebuildings and civils infrastructure, raising the overall potential value of asale to £5-10 million. The main clients that might purchase a TEG plant arelocal authorities, waste management companies, water companies and otherutilities and a variety of private sector businesses, including major foodproducers/processors. (iii) Development of the compost marketing business This is seen by the Company as a key strategic element and the Company has givenclear focus to its subsidiary, NOFCO, to develop secure markets and to leveragevalue by demonstrating the quality of the compost product. The Directors believethe compost from the TEG system is of a high quality and gives the Company acompetitive advantage. The Company is committed to continuing its investment in R&D whilst developingthe compost marketing business to support plant sales and BOOs. It also intendsto strengthen its commercial skills in sales, operations and project delivery,through several key appointments. 10. Future Developments TEG has a pipeline of numerous actual and potential projects. In addition, theCompany believes there will be considerable further interest in TEG technologyas the market grows and the number of Local Authority tenders and PFI projectsgrow. Developments of particular note include: (i) a number of potential medium scale BOO projects and some in development withwaste management operators. The most advanced BOO opportunity is in Tempsford,Bedfordshire, where TEG has secured an exclusive option to lease a site. TheCompany intends to submit a planning application by the end of March 2007; (ii) two early stage potential large BOOs; (iii) ongoing trials with Shell UK Ltd; (iv) discussions and tenders with Local Authorities and large waste managementcompanies; and (v) TEG is developing the NOFCO business and about to commence trials on largescale crop management and production of industrial crops for potentialindustrial and renewable power applications. 11. Use of Proceeds of the Placing It is intended that the proceeds of the Placing will be used as follows: (i) funding of bonds and working capital for the Greater Manchester buildprojects; (ii) providing capital for the construction of BOO projects over the period from2007 to 2009; (iii) the strengthening of the sales, business development and projectdevelopment teams for the UK and European markets as a result of increasinginterest from both the UK and abroad; and (iv) the development of the NOFCO industrial crop business. 12. Working Capital The Directors are of the opinion that, taking into account the net proceedsreceivable under the Placing, the working capital available to the Group issufficient for its present requirements, that is, for at least the next twelvemonths from the date of Admission. 13. Principal Terms of the Placing Canaccord has agreed to use their reasonable endeavours to procure placees for10,000,000 New Ordinary Shares at the Placing Price and the New Ordinary Shares,when issued, will rank pari passu with the Existing Ordinary Shares, includingthe right to receive all dividends and other distributions, thereafter declared,made or paid. The Placing, which is not underwritten, will be conditional, inter alia, onAdmission taking place. 14. Extraordinary General Meeting Notice of the Extraordinary General Meeting to be held at The Bridgewater Hall,Lower Mosley Street, Manchester M2 3WS at 11:50 a.m. on 20 April 2007 will besent to Shareholders on Monday 26 March 2007 at which one ordinary resolutionand one special resolution will be proposed as follows: Ordinary Resolution 1. to grant the Directors a general authority pursuant to section 80 of the Actto allot relevant securities (within the meaning of section 80(2) of the Act) ofthe Company up to an aggregate nominal amount equal to £500,000, representing26.28 per cent. of the Existing Ordinary Shares as at 22 March 2007 (being thelast practicable date prior to the publication of this announcement) all ofwhich will be used for the Placing. Special Resolution 2. to disapply statutory pre-emption rights in relation to shares with a nominalvalue of £500,000 representing 26.28 per cent. of the Existing Ordinary Sharesas at 22 March 2007 (being the last practicable date prior to the publication ofthis announcement) and representing the allotments contemplated in this letterpursuant to the Placing. 15. Definitions "ABP" animal by-product; "Act" the Companies Act 1985 (as amended); "Admission" admission of the New Ordinary Shares to trading on AIM and such admission becoming effective in accordance with the AIM Rules; "Admission Document" The admission document relating to the Company dated 6 July 2004; "AIM" the market of that name operated by the London Stock Exchange; "AIM Rules" the AIM Rules for Companies published by the London Stock Exchange as in force at the date of this document or, where the content requires, as amended or modified after the date of this document; "Board" or "Directors" the board of directors of the Company; "BOO" build, own and operate; "Canaccord" Canaccord Adams Limited, the Company's nominated adviser and broker; "Circular" the circular to be sent to Shareholders on 26 March 2007; "Company" or "TEG" The TEG Group plc; "CREST" means the computer-based system established under the Uncertificated Securities Regulations 2001 which enables title to units of relevant securities (as defined in the Regulations) to be evidenced and transferred without a written instrument and in respect of which CRESTCo Limited is the Operator (as defined in the Regulations); "Existing Ordinary Shares" the 38,045,381 Ordinary Shares in issue at the date of this document; "Extraordinary General Meeting" or the extraordinary general meeting of the"EGM" Company to be held at The Bridgewater Hall, Lower Mosley Street, Manchester M2 3WS at 11:50 a.m. on 20 April 2007, notice of which is set out at the end of the Circular; "GMW PFI Announcement" the announcement made by the Company on 29 January 2007 that the Viridor-Laing consortium had been awarded preferred bidder status in relation to the Greater Manchester Waste PFI contract; "IVC" in-vessel composting; "New Ordinary Shares" the 10,000,000 Ordinary Shares to be issued pursuant to the Placing; "NOFCO" the Natural Organic Fertilizer Company Ltd, a subsidiary of the Company; "Ordinary Shares" ordinary shares of 5 pence each in the share capital of the Company; "PFI" Private Finance Initiative;"Placing" the conditional placing by Canaccord of the New Ordinary Shares at the Placing Price; "Placing Agreement" the agreement dated today, a summary of which is set out in paragraph 13 of this announcement; "Placing Price" the price at which the New Ordinary Shares will be issued pursuant to the Placing, being £1.10 per New Ordinary Share; "Proxy Form" the form of proxy accompanying the Circular for use by Shareholders at the Extraordinary General Meeting; "Resolutions" the special resolution and the ordinary resolution to be proposed at the EGM, as set out at the end of this announcement; "Share Option Schemes" the TEG Unapproved Share Option Scheme, the Company Share Option Plan and the Company Enterprise Management Incentive Share Option Plan; "Shareholders" holders of Ordinary Shares. Canaccord Adams Limited (which is authorised and regulated in the United Kingdomby the Financial Services Authority) is acting solely for The TEG Group plc inconnection with the Placing and is not acting for any person other than The TEGGroup plc and will not be responsible for any person other than The TEG Groupplc for providing the protections afforded to customers of Canaccord AdamsLimited or for providing advice to any person in connection with the mattersdescribed in this announcement. This announcement does not constitute, or form any part of, an offer orsolicitation of an offer to subscribe for the New Ordinary Shares. This information is provided by RNS The company news service from the London Stock Exchange