| Mon 28 Feb 2011, 9:58 | | IPSA - IPSA Group Plc - Correction re Warrants |
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IPS
IPSA
IPSA - IPSA Group Plc - Correction re Warrants
IPSA GROUP PLC
(Incorporated and registered in England and Wales)
(Registration Number 5496202)
AIM Share Code IPSA ISIN GB00B0CJ3F01
JSE Share Code IPS ISIN GB00B0CJ3F01
("IPSA" or "the company")
Correction re Warrants
Further to the announcement released on 25th February in respect of the
placing to raise GBP1 million, the reference to warrants which were previously
issued to certain loan note holders should have referred to warrants over
6,500,000 ordinary shares rather than warrants over 8,125,000 ordinary shares.
All of the other information remains unchanged.
The correct announcement should read as follows:
Placing of 12.5 million new Ordinary Shares at 8 pence to raise GBP1 million
to fund the start-up of the Newcastle Cogeneration Plant and working capital
IPSA GROUP PLC (AIM:IPSA), the developer, owner and operator of power
generation capacity in Southern Africa, announces that it has today placed a
total of 12.5 million new ordinary shares of 2 pence each ("the Placing
Shares") at a price of 8 pence per share to raise GBP1 million before expenses
("the Placing").
The Placing
The Placing Shares have been allotted subject only to admission to trading on
AIM ("Admission"). Application will be made for the Placing shares to be
admitted to trading on AIM, with Admission expected to take place on 3rd March
2011.
The Placing Shares will in aggregate represent just over 11.6 percent of the
enlarged share capital of IPSA. The total enlarged issued share capital of
IPSA following Admission will be 107,504,081 ordinary Shares (the "Enlarged
Issued Share Capital"). The above figure may be used by shareholders as the
denominator for the calculations by which they will determine if they are
required to notify their interest in, or a change to their interest in, the
share capital of the Company under the Disclosure and Transparency Rules.
The Placing Shares have been placed with certain existing shareholders.
Subscribers to the Placing include Sterling Trust Limited, which will
subscribe for 10 million Placing shares at the Placing price. As a result,
under the AIM Rules for Companies, the Placing is deemed to be a related party
transaction. The independent directors of the Company consider, having
consulted with the Company`s Nominated Adviser, Execution Noble & Company
Limited, that the terms of Placing are fair and reasonable insofar as
shareholders of the Company are concerned.
The net proceeds of the fundraising will not provide the Company with
sufficient working capital to satisfy its total medium and long term
requirements, without the refinancing of the Company`s loans to its
subsidiary, Newcastle Cogeneration Pty. Limited ("NewCogen"), the sale of the
four Turbines to repay the Standard Bank loan and other trade creditors or the
extension of the repayment period in respect of the loan notes, therefore as
previously announced working capital remains extremely tight. An announcement
will be made at the appropriate time if there is any further change in the
financial condition of the Group.
Plan to commence operations at NewCogen
With the funding raised in the Placing, IPSA is planning on restarting the
Newcastle cogeneration plant in March following final agreement on a gas
supply contract with Spring Lights Gas (Pty.) Limited. Funds from the Placing
will be used to provide the required security and deal with certain trade
creditors of NewCogen and provide NewCogen with working capital over the start-
up period.
With the gas agreement in place, NewCogen will be in a position to commence
sales of electricity to Eskom under the medium term power purchase agreement
dated 26th August 2010.
Working Capital
The bulk of the funds will be used to provide the group with working capital
to re-commence operations at the cogeneration plant at Newcastle KwaZuluNatal,
South Africa.
On 6th December 2010, the Company announced that Sasol Gas Limited ("Sasol
Gas"), which is the monopoly gas-producer and primary supplier of gas in South
Africa, has commenced legal action against NewCogen, for sums claimed under
the gas supply agreement terminated in August 2009 amounting to approximately
GBP4 million. To date no further action has been taken.
Outstanding debt, accrued interest and other creditors of the Group currently
amount to approximately GBP37 million, with the bulk of funds owed by the
Company.
Approximately GBP31 million of the total outstanding debt was subject to a
standstill agreement with Standard Bank PLC and Turbocare SpA following
execution of an agreement on 5th March 2010, which expired on 21st February
2011. The Company is in discussions with the bank and Turbocare regarding
repayment timescales for these amounts.
Change to terms of IPSA Warrants
Further to the announcement on 9th March 2010 in connection with warrants
issued to certain loan note holders (the "Warrants"), as a result of the
Placing any shares issued under the Warrants will now be issued at 8p per
share. Accordingly, Warrants for the issue of a total of 6,500,000 ordinary
shares are outstanding and are exercisable at any time until 31st October
2013.
Richard Linnell, Chairman comments: "We were very pleased indeed to have
reached terms with our new gas provider Spring Lights, and now as a result of
this support of our shareholders we expect to be in a position to commence
operations within the coming weeks."
For further information contact:
Peter Earl, CEO, IPSA Group PLC +44 (0)20 7793 5615
John Llewellyn-Lloyd / Harry Stockdale, Execution Noble & Company Ltd
+44 (0)20 7456 9191
Riaan van Heerden,PSG Capital (Pty) Ltd +27 (0)21 887 9602
London
28 February 2011
Date: 28/02/2011 09:58:01 Produced by the JSE SENS Department.
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