|
IPS
IPSA
IPS - IPSA Group Plc - Issue of Loan Notes and Agreement with Standard Bank and
TurboCare
IPSA GROUP PLC
(Incorporated and registered in England and Wales)
(Registration Number 5496202)
AIM Share Code IPSA ISIN GB00BOCJ3F01
JSE Share Code IPS ISIN GB00BOCJ3F01
("IPSA" or "the company")
Issue of Loan Notes and Agreement with Standard Bank and TurboCare
Highlights
* Loan Notes to provide GBP650,000 interim funding
* Tripartite agency agreement to advance sale of gas turbines
* New standstill arrangements with the Company`s major creditors
IPSA PLC (AIM: IPSA), the developer, owner and operator of power generation
capacity in Southern Africa, announces that on 5 March 2010 the Company entered
into an agreement with RAB Energy Fund Limited and certain other investors
(together the "Loan Note Holders") to issue GBP650,000 of unsecured loan notes
(the "Loan Notes") to the Loan Note Holders.
On the same day, the Company also entered into an agreement with Standard Bank
PLC ("Standard Bank") and TurboCare S.p.A. ("TurboCare") regarding the marketing
of the Company`s gas turbines, which also provides a standstill arrangement
regarding funds due to both these parties.
TERMS OF THE LOAN NOTES
Under the terms of the agreement, the Company will issue GBP650,000 of unsecured
loan notes of GBP1 each, which carry interest of 6% per annum, and which are due
for repayment (the "Repayment Date"), together with accrued interest thereon, on
the earlier of:
* 31 January 2011; or
* A change of control of the Company; or
* The sale of two of the Siemens Westinghouse 701 DU turbines ("the
Turbines") (including the Turbine already conditionally sold to IPC as
announced on 23 December 2009); or
* A full or partial sale of certain other plant or equipment in South Africa
(or otherwise generating proceeds in respect of such operations) for at
least USD 8 million.
In accordance with the agreement, the Company intends that the proceeds from
issuing the Loan Notes will be applied for the purposes of the development of
the Elitheni coal project at Indwe, South Africa, and for general operational
and working capital purposes.
In addition, the Company has agreed to issue to the Loan Note Holders warrants
(the "Loan Note Warrants") over 6,500,000 ordinary shares of 2 pence each in the
capital of the Company (the "Ordinary Shares"), exercisable between the
Repayment Date and 30 months thereafter, at the lower of 19 pence per Ordinary
Share and the price at which any future Ordinary Shares are issued prior to such
exercise.
PUT OPTION
In order to secure this investment from the Loan Note Holders, Independent Power
Corporation PLC ("IPC"), a company controlled by Peter Earl, chief executive of
IPSA Group plc, has entered into an option agreement to acquire the Loan Notes,
the accrued interest thereon, and the Loan Note Warrants from the Loan Note
Holders, at the option of the Loan Note Holders (the "Put Option") in the event
of certain defaults by the Company.
WORKING CAPITAL
Having entered in the conditional sale of one of the Turbines, which is
still subject to completion of financing arrangements, the Company continues
to market the three remaining Turbines actively. Given the continued extreme
difficulty of the Company`s present working capital position, as announced on
23 December 2009, the directors of IPSA believe that this transaction is in
the best interests of shareholders, in that it provides essential short term
funding.
Insofar as the Loan Note Holders can exercise the Put Option to sell the Loan
Notes and transfer the Loan Note Warrants to IPC, a related party of the
Company, the independent directors of the Company consider, having consulted
with the Company`s Nominated Adviser, Execution Noble & Company Limited, that
the terms of the Loan Note and Warrant agreements are fair and reasonable
insofar as shareholders of the Company are concerned.
THE STANDARD BANK AND TURBOCARE AGREEMENT
The agreement between the Company, Standard Bank and TurboCare governs
the marketing of the urbines and the distribution of proceeds received in
connection with a sale. The agreement also provides for a standstill
arrangement whereby Standard Bank and TurboCare, the Company`s two largest
creditors, have undertaken that they will not take proceedings against IPSA
to recover the debts owed to them and that they will not enforce any security
rights they may have during the term of the agreement. This agreement
terminates on 31 January 2011, or earlier in the event that Standard Bank and
TurboCare are paid all sums due to them prior to that date or at Standard
Bank`s election after 30 November 2010 in the event that TurboCare has not
secured a sale.
UPDATE RE CONDITIONAL SALE OF FIRST TURBINE TO IPC
As noted above, the conditional sale of the first turbine to IPC and its
branch office, IPOL Bolivia Sucursal, which was announced on 23 December 2009,
is still subject to completion of IPC`s financing arrangements.
NEWCOGEN UPDATE
IPSA`s wholly-owned subsidiary, Newcastle Cogeneration Pty Ltd ("NewCogen")
is currently endeavouring to secure a power purchase contract with Eskom for
its power plant which it owns in KwaZulu Natal under the delayed Medium Term
Power Purchase Programme ("MTPPP"). There has been no new announcement from
Eskom regarding the MTPPP. However, on 24 February 2010 the South African
electricity regulator announced the new multi-year price determination for
Eskom, which included an allocation of resources in connection with power
purchase contracts with independent power producers, of which the MTPPP forms
a part. It is the intention of the directors of NewCogen to substantially
refinance its 18 MW power plant as soon as a power purchase agreement is signed.
NewCogen needs to come to an agreement with Sasol Gas for a new
gas contract and settle overdue amounts of approximately GBP3m claimed by
Sasol in respect of gas consumption and take or pay liabilities prior to
restarting the plant.
Speaking today in London, Peter Earl, CEO of IPSA said: "I am delighted that
we have secured an important injection of short term liquidity into IPSA as
we continue the marketing process to sell the remaining three Siemens
Westinghouse 701 turbines not yet under contract."
The Company also announces that Noble & Company Limited, the Company`s Nominated
Adviser and Broker, has changed its name to Execution Noble & Company Limited
with immediate effect.
For further information contact:
Peter Earl, CEO, IPSA Group PLC: +44 (0)20 7793 5615
John Llewellyn-Lloyd / Harry Stockdale, +44 (0)20 7456 9191
Execution Noble & Company Ltd:
Riaan van Heerden, PSG Capital (Pty.) +27 11 797 8400
Limited:
Ana Ribeiro, Account Director, Blythe Weigh +44 (0) 20 7138 3206
Communications
Date: 09/03/2010 17:02:03 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS. |
|