Trading Emissions PLC Regulatory News (TRE)

PRESS RELEASE

10 October 2011

Trading Emissions PLC

Trading update and proposed change of Directors

Trading update

The Company will announce its preliminary results for the year ended 30 June 2011 on 31 October 2011.

The Company estimates that the NAV per share at the year end will be at least 116p (unaudited) however revaluing the carbon portfolio at today's prevailing carbon prices would result in an estimated current NAV per share of at least 91p (unaudited).

Since the year end Trading Emissions has sold and delivered approximately 2.0m CERs for net proceeds of approximately €16.8m.

In addition the Company has sold forward approximately : 1.2m CERs for October 2011 delivery for aggregate proceeds of approximately €9.8m : 0.5m CERs for November 2011 delivery for aggregate proceeds of approximately €4.2m : 0.6m CERs for December 2012 delivery for aggregate proceeds of approximately €13.2m ; and 0.6m EUAs for December 2011 delivery for aggregate proceeds of €7.4m.

Current stock stands at approximately 2.4m CERs and 1.5m EUAs however, despite the above forward contracts being covered by physical stock, the carbon market requires that counterparties provide cash collateral against forward contracts up until delivery. Accordingly, cash proceeds must be retained to ensure the Company can meet its working capital requirements.

Due to a material decrease in prevailing carbon prices and, in turn, the value of the Company's portfolio of carbon related securities, the Company may have insufficient distributable reserves available to it for the payment of future dividends.

However to address the issue of distributable reserves and allow returns of cash to shareholders to be effected in a cost effective, flexible and timely manner going forward, approval will be sought from shareholders at the Company's AGM in December 2011 (the "AGM") to re-register the Company as a company registered under the Isle of Man Companies Act 2006 and to amend the Company's articles to, inter alia, enable the Company to return cash to shareholders by a series of one or more B share schemes ("Capital Distribution Programme") pursuant to which shareholders will be able to choose whether to receive returns of cash as income or capital.

The Directors therefore do not intend to declare a dividend at the full year results in October. However the Company re affirms its commitment to return to shareholders the realised proceeds of the private equity or carbon disposals subject to, in the opinion of Directors, the Company maintaining sufficient working capital to effect an orderly realisation of the Company's assets. The first return of cash to shareholders will be announced as soon as the Directors determine that there is sufficient surplus available cash to make such a return.

Proposed change of Directors

Following consultation with certain shareholders, the Company also announces that Neil Eckert, Malcolm Gillies, Nigel Wood and Bertrand Rassool will resign at the Company's AGM in December and resolutions will be put forward for the appointment of Christopher Agar, Martin Adams, Francis Hackett and Norman Crighton ("Proposed Directors") at the same meeting to continue to oversee an orderly realisation of the Company's assets in line with the Company's revised investment policy. The appointment of the Proposed Directors will be subject to their appointment not resulting in a majority of the Board being resident in the United Kingdom as at the end of the AGM. Further information on the Proposed Directors will be provided in due course. 

--ENDS--

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Notes to editors

Trading Emissions PLC's main investment objective is to make capital profits from purchasing emissions assets at appropriate prices. The core part of its portfolio is a long position in carbon assets, although some trading does take place. The Company also invests in other selected emissions assets. In addition, the Company generates income from the provision of finance for selected programmes such as aggregation, monetisation, collateralisation and other innovative approaches to carbon trading markets.

www.tradingemissionsplc.com