TIDMALR
RNS Number : 9384N
Alternative Energy Limited
04 October 2012
FOR RELEASE AT 2.00PM 4 October 2012
Alternative Energy Limited
("Alternative Energy", "AEL" or the "Company")
Proposed Placement, Preferential Offering and Significant
transactions, including Related Party Transactions in relation to
the proposed Revised Convertible Loan
The Board of Directors of Alternative Energy Limited (the
"Company") are pleased to announce a proposed series of
transactions which will have a substantial impact on the Company
(the "Transactions"). On 30 May 2012, the Company announced that it
was undertaking a number of key discussions which would have a
significant impact on the business and financing of the Company and
that, pending the confirmation of these arrangements and the
Company being in a position to release its interim statement for
the six months ended 28 February 2012, trading in the Company's
Ordinary Shares on AIM would be suspended.
The Board believes that these arrangements will enable the
Company to capitalise on its previous research and expertise to
participate in the launch of next generation renewable energy
projects across developing countries, starting with its key role in
the proposed Indonesian projects and assisted by its new
relationship with LDK Solar which will enable the Company to take
advantage of the lower pricing of solar cells to make even more
competitive building integrated products. In conjunction with this,
the Company is proposing to make a Preferential Offering to
Shareholders to enable them to subscribe for Shares up to
US$4,800,000 and also to raise $3,000,000 through a Placement to
provide additional working capital.
The Company also announces that it has changed its financial
reporting year end date to 31 December, from 31 August. It has
agreed with AIM that it will announce a second six month interim
set of accounts for the six months ended 31 August 2012 by 30
November 2012. It will then announce its audited year end accounts
for the 16 months ended 31 December 2012 by 30 June 2013 and revert
to the reporting calendar required by the AIM Rules thereafter.
At the same time as releasing the following announcement in
respect of the Transactions, the Company is releasing its
outstanding interim statement for the six months ended 28 February
2012.
Following the release of this announcement and the announcement
of the interim financial figures the suspension of the Company's
shares from trading will be lifted, and the Company's shares are
expected to resume trading from 2.00pm on 4 October 2012. The
Company is now working on the Circular to be published in
connection with the Preferential Offering and the Revised
Convertible Loan and expects to publish this in due course. Further
details of the Transactions are set out below.
The Transactions are, as referred to below, subject to a number
of material conditions and it should be noted that the Company's
working capital position is subject to these being implemented (and
the required Shareholder approvals) and the various trading
arrangements, as also set out below, operating as expected.
A. HEADS OF AGREEMENT ENTERED INTO BETWEEN THE COMPANY, P.T.
MEGA URIP PESONA ("MUP") AND LDK SOLAR HI-TECH ("LDK"),
SUPPLEMENTAL HEADS OF AGREEMENT ENTERED INTO BETWEEN THE COMPANY
AND MUP, AND MEMORANDUM OF UNDERSTANDING ENTERED INTO BETWEEN THE
COMPANY AND P.T. MUP ALTERNATIF ENERGI ("MUP AE")
B. HEADS OF TERMS OF CONDITIONAL PRIVATE PLACEMENT ENTERED INTO
BETWEEN THE COMPANY AND LDK FOR THE PLACEMENT OF NEW ORDINARY
SHARES IN THE CAPITAL OF THE COMPANY ("PLACEMENT SHARES") FOR AN
AGGREGATE AMOUNT OF US$3,000,000 AT A PLACEMENT PRICE OF 25%
DISCOUNT TO THE CLOSING MARKET PRICE AS AT THE CLOSE OF BUSINESS ON
THE RELEVANT SHARE ISSUANCE DATE FOR EACH PLACEMENT SHARE
C. PROPOSED PREFERENTIAL OFFERING OF UP TO 600,000,000 NEW
SHARES ("PREFERENTIAL OFFERING SHARES") IN THE CAPITAL OF THE
COMPANY AT AN ISSUE PRICE OF US$0.008 FOR EACH PREFERENTIAL
OFFERING SHARE TO THE SHAREHOLDERS OF THE COMPANY (EXCEPT FOR
PERFECTION GROUP LIMITED)
D. AMENDMENT OF THE TERMS OF THE CONVERTIBLE LOAN AGREEMENT
ENTERED INTO BETWEEN THE COMPANY AND CHRISTOPHER NIGHTINGALE
E. SALES CONTRACTS ENTERED INTO BETWEEN ALTERNATIVE ENERGY
HOLDINGS LIMITED ("AEHL"), A WHOLLY-OWNED SUBSIDIARY OF THE
COMPANY, AND ECOTECWORLD ENVIRONMENTAL PRODUCT GMBH ("ECOTECWORLD")
FOR THE SALE OF PHOTOVOLTAIC MODULES TO ECOTECWORLD FOR AN
AGGREGATE CONSIDERATION OF EUR9,408,150
F. CHANGE OF FINANCIAL YEAR END FROM 31 AUGUST TO 31 DECEMBER
1. INTRODUCTION
1.1 The board of directors ("Board") of the Company wishes to
announce that the Company has entered into the following
agreements:
(a) the Heads of Agreement;
(b) the Supplemental Heads of Agreement;
(c) the Memorandum of Understanding;
(d) the Revised Convertible Loan Agreement;
(e) the Sales Contracts; and
(f) the Heads of Terms of Placement,
(each term as hereinafter defined).
Further information on the Heads of Agreement, the Supplemental
Heads of Agreement, the Memorandum of Understanding, the Revised
Convertible Loan Agreement, the Sales Contracts and the Heads of
Terms of Placement is set out in the relevant Sections below.
1.2 It is also proposed that the Company undertakes a
preferential offering of up to 600,000,000 new shares
("Preferential Offering Shares") at the issue price of US$0.008
each ("Preferential Offering Price") to shareholders (except for
Perfection Group Limited, a company whose entire issued and paid-up
ordinary shares are directly held by Christopher Nightingale) to
raise up to US$4,800,000("Preferential Offering").
1.3 On 3 October 2012, the Company entered into the Revised
Convertible Loan Agreementwith Christopher Nightingale pursuant to
which the Directors of the Company with the exception of
Christopher Nightingale ("Independent Directors") agreed, subject
to shareholder approval, to extend the convertible loan agreement
("Convertible Loan Agreement") entered into with Christopher
Nightingale on 14 May 2010 (as amended and extended) for a period
of two more years with the terms of the Convertible Loan Agreement
to be amended. Further information on the amendments to be made to
the Convertible Loan Agreement is set out in the relevant Section
below. This is a Related Party Transaction under the AIM Rules and
will be dealt with as such in the Circular seeking shareholder
approval.
1.4 Approval for the Preferential Offering and the amendments to
the Convertible Loan Agreement will be inter-conditional and take
place concurrently.
1.5 The Board also proposes to change the financial year end of
the Company from 31 August to 31 December.
2. HEADS OF AGREEMENT, SUPPLEMENTAL HEADS OF AGREEMENT AND MEMORANDUM OF UNDERSTANDING
2.1 Heads of Agreement between P.T. Mega Urip Pesona ("MUP"),
LDK Solar Hi-Tech ("LDK") and the Company
On 2(nd) July 2012, the Company signed a binding Heads of
Agreement with MUP, an Indonesian Company, and LDK, a Chinese
Company, pursuant to which, subject to government approval and
execution of a definitive master project agreement ("Master Project
Agreement"), the Company is appointed as the exclusive Engineering,
Procurement and Construction ("EPC") contractor for the Indonesian
"1000 Island" Project.
The 1000 Island Project is a projected US$600,000,000 project
for the construction of solar farms across Indonesia funded by
Chinese soft loans to Indonesia and confirmed at the bilateral
summit between the Indonesian President and Chinese Premier on
23(rd) March 2012, at which time an initial memorandum was signed
between MUP and LDK.
Pursuant to the Heads of Agreement, MUP will secure a soft loan
from the government of the People's Republic of China with a first
tranche of up to US$100,000,000, which shall be disbursed through
MUP in various stages in accordance with the terms of the Master
Project Agreement.
MUP is an Indonesian project development company which has so
far signed a total of US$7.1 billion worth of energy and
infrastructure projects in Indonesia. LDK is one of China's largest
producers of solar wafers and solar modules.
Under the terms of the Heads of Agreement, MUP will be the
developer of the 1000 Island Project, and will arrange the funding
of the 1000 Island Project. LDK will be the exclusive supplier of
the solar panels required for the 1000 Island Project, and the
Company, utilising its systems expertise, will design the systems
and act as the principal EPC contractor.
2.2 Supplemental Heads of Agreement between MUP and the Company
Under the terms of the Supplemental Heads of Agreement agreed
between MUP and the Company executed on 2(nd) July 2012, the
Company has agreed to grant to MUP an option to purchase new shares
in the Company ("Shares") representing up to 29.9% of its entire
issued share capital at a price of US$0.005 per Share ("Share
Option"), such option only to be exercisable in tranches of at
least US$100,000 at any time for six months following the signing
of the Master Project Agreement relating to the 1000 Island Project
(and lapsing in the event that such Master Project Agreement is not
signed). In the event of any share issuance by the Company prior to
the exercise of the Share Option, MUP shall be entitled to acquire
up to 29.9% of the enlarged issued share capital of the Company at
the same issue price.
Further under the terms of the Supplemental Heads of Agreement,
the Company has agreed to pay to MUP by way of reimbursement of
preliminary project and feasibility study costs the sum of
US$1,000,000.
The Company has also agreed to pay to MUP a commission of 5% of
invoice value for invoices derived from the 1000 Island Project,
and an introductory commission of 5% of contract value for any
other projects in Indonesia introduced by MUP in respect of which
the Company is appointed as contractor.
The Company expects to recoup these sums paid to MUP sum under
the project revenues following the signing of the Master Project
Agreement.
For its part, MUP will be appointed as the Company's sole
distributor in Indonesia for all products except lighting products,
and MUP has agreed to exclusively appoint the Company as EPC
contractor for all of its forthcoming projects in Indonesia,
including the green community project which is the subject of a
separate Memorandum of Understanding (please refer to Section 2.3
below).
Lastly, in the event that MUP holds more than 20% of the issued
share capital of the Company, MUP shall be entitled to nominate one
(1) director to the Board, and in the event that MUP holds more
than 28% of the issued share capital of the Company, MUP shall be
entitled to nominate two (2) directors to the Board, such
nominations as aforesaid being subject to regulatory approval.
2.3 Memorandum of Understanding between P. T. MUP Alternatif
Energi ("MUP AE") and the Company
A separate Memorandum of Understanding was signed on 22(nd) June
2012 between MUP's new green energy subsidiary company, MUP AE and
the Company.
MUP AE and its parent company, MUP, are creating a program for
the development of solar or green energy based sustainable
communities across Indonesia on behalf of the Government of
Indonesia. The Company had been developing many technologies which
are applicable to such a program including its eLive housing,
eRoof, eStorage solutions and the development of its green
community concept. The Company's energy saving products, including
its eLumen lighting range, will also be used in such
communities.
Under the terms of the Memorandum of Understanding, MUP will
exclusively use the Company and the Company's technologies and will
appoint the Company as its principal EPC contractor in connection
with its green community program, which the parties agree to
jointly develop and promote.
The Company agrees to work with the other contractors nominated
by MUP AE (which may include construction companies) and to appoint
MUP AE as its sole and exclusive agent in Indonesia for all of its
technologies utilized in the green community program, including any
additional technology developed during the green community program,
and will grant to MUP AE licences to use all of its patents,
trademarks and other intellectual property used in the green
community program.
Both parties have agreed to progress their arrangements towards
conclusive agreements relating to the creation of an Indonesian
Government-backed program for the creation of green sustainable
communities as soon as possible. It is expected that this will
happen in parallel with the execution of the 1000 Island Project
set out in detail above. The Memorandum of Understanding will be
effective for a period of two (2) years from the date of its
execution, after which it may be renewed.
3. HEADS OF TERMS OF CONDITIONAL PRIVATE PLACEMENT BETWEEN THE COMPANY AND LDK
3.1 Heads of Terms of Conditional Private Placement
Subsequent to the signing of the above agreements, the Company
has entered into Heads of Terms of Conditional Private Placement
("Heads of Terms of Placement") with LDK on 30 August 2012 in
respect of the subscription by LDK for Shares ("Placement Shares")
at a placement price per Placement Share ("Placement Price") of 25%
discount to the closing market price of Shares traded on AIM as at
the close of business on the relevant share issuance date
("Placement"). Pursuant to the Heads of Terms of Placement, the
aggregate Placement Price for the Placement Shares will be paid
from the funds from the successful first drawdown by LDK from the
Indonesian Ministry of Finance pursuant to the 1000 Island Project
("First Drawdown"). The placement will raise US$3,000,000 for the
Company. The Placement is conditional upon the resumption of
trading of the Company's shares and conditional upon the First
Drawdown. The monies from the Placement will be used to meet the
Company's obligations and for general working capital purposes in
relation to the 1000 Island Project.
The Placement Shares shall be issued and allotted pursuant to
the general share issue mandate to issue new Shares in the capital
of the Company passed by the shareholders at the Company's annual
general meeting held on 27 April 2012 ("Existing Share Issue
Mandate"). An application will be made to the London Stock Exchange
for the Placement Shares, which will rank pari passu with all
existing Shares, to be admitted to trading on AIM and a further
announcement in this regard will be made in due course.
The Placement will be undertaken by way of a private placement
in accordance with Section 272B of the Securities and Futures Act
of Singapore. As such, no prospectus or offer information statement
will be lodged with the Monetary Authority of Singapore in
connection with the issuance of the Placement Shares.
3.2 Placement Shares and Status
Subject to the entering into of the Share Placement Agreement
and the completion of the Placement, the Placement Shares shall be
issued and allotted to LDK by the Company free and clear from all
encumbrances, ranking pari passu in all respects with all other
existing Shares, except that they will not rank for any dividend,
right, allotment or other distributions, the record date of which
falls on or before the date on which the Placement is
completed.
It should be noted that the Placement Price is not ascertainable
at the date of this Announcement as it will be based on the future
prevailing market price of the Shares asat the close of business on
the relevant share issuance date. Therefore it is not possible at
the date of this Announcement to determine the aggregate number of
Placement Shares that will be issued to LDK.
3.3 Conditions Precedent
Under the Heads of Terms of Placement, completion of the
Placement is conditional upon, inter alia:
(a) admission of the Placement Shares to trading on AIM (on
conditions, if any, reasonably acceptable to the Company and LDK,
and to the extent that any conditions for the listing and quotation
of the Placement Shares on the AIM are required to be fulfilled on
or before the completion date of the Placement, they are so
fulfilled) becoming effective;
(b) as at the completion date of the Placement, the trading of
the Shares of the Company not being suspended by the AIM (other
than a suspension on a temporary basis requested by the Company)
and the issued Shares not having been delisted; and
(c) the occurrence of the First Drawdown.
3.4 Information on LDK and Rationale for Placing to LDK
Established in 2005 in China, LDK Solar is one of the
world'sleading producers of solar wafers in terms of capacity and a
leading high-purity polysilicon and solar module manufacturer. The
Company's headquarters and manufacturing facilities are in the
Hi-Tech Industrial Park, Xin Yu City, Jiang Xi Province in China
and LDK maintains sales, marketing and customer support offices
across Asia, Europeand North America.
LDK Solar is listed on the New York Stock Exchange.
4. PROPOSED PREFERENTIAL OFFERING
4.1 Preferential Offering to Shareholders
The Board has also determined to make a preferential offering of
up to 600,000,000 Shares ("Preferential Offering Shares") of an
aggregate value of US$4,800,000 to existing shareholders except for
Perfection Group Limited on the same terms and at the same price of
US$0.008 each ("Preferential Offering Price") in order to provide
existing shareholders with an opportunity to reduce dilution and
also to acquire shares in the Company at the current pricing
levels. The Preferential Offering Shares will be allocated to
Subscribing Shareholders (as defined below) based on the number of
Preferential Offering Shares applied for by the respective
Subscribing Shareholders. In the event of over-subscription, the
final allotment of Preferential Offering Shares to the Subscribing
Shareholders will be in proportion to the number of Preferential
Offering Shares applied for by each Subscribing Shareholder
relative to the total number of Preferential Offering Shares
available for subscription, being 500,000,000, fractional shares to
be rounded upwards or downwards in the absolute discretion of the
Directors of the Company.
The Preferential Offering will be subject to shareholder
approval which will be sought from Shareholders at an Extraordinary
General Meeting ("EGM") of the Company to be held on or around 14
November 2012 and will be the subject of a notice of EGM and
circular to be despatched by the Company as soon as possible. A
further announcement will be made at this stage.
An application will also be made to the London Stock Exchange
for the listing of and quotation for the Preferential Offering
Shares on AIM.
The Preferential Offering will also be conditional on the
approval of the revised terms of the outstanding Convertible Loan
due from the Company to the Chairman, Christopher Nightingale.
If the Preferential Offering is approved at the EGM, Shares will
be offered to all shareholders holding shares in the company as at
the Books Closure Date except Perfection Group Limited.
Those shares not taken up by Shareholders may then be offered by
the Company to third parties for subscription at the same price as
the Preferential Offering Price.
No underwriting commitment has been arranged with any financial
institution for the Preferential Offering. Please refer to Section
4.2 for further information.
4.2 Terms of the Preferential Offering
Entitled Shareholders (as defined below) will be at liberty to
apply for any number of Preferential Offering Shares, up to a
maximum of 600,000,000 Preferential Offering Shares per Entitled
Shareholder who is applying under the Preferential Offering
("Subscribing Shareholder"). The Preferential Offering Shares will
be allocated to Subscribing Shareholders based on the number of
Preferential Offering Shares applied for by the respective
Subscribing Shareholders. In the event of over-subscription by
Subscribing Shareholders, the final allotment of Preferential
Offering Shares to the Subscribing Shareholders will be in
proportion to the number of Preferential Offering Shares applied
for by each Subscribing Shareholder relative to the total number of
Preferential Offering Shares available for subscription, being
600,000,000, fractional shares to be rounded upwards or downwards
in the absolute discretion of the Directors of the Company.
As this is a Preferential Offering and not a rights issue,
Entitled Shareholders will not have any pro-rata provisional
entitlements to Preferential Offering Shares. Each Entitled
Shareholder will be at liberty to apply for any number of
Preferential Offering Shares, up to a maximum of 600,000,000
Preferential Offering Shares.
The Preferential Offering Shares are payable in full upon
acceptance and application. The Preferential Offering Shares will,
upon allotment and issue, rank pari passu in all respects with the
then existing Shares, save for any dividends, rights, allotments or
other distributions that may be declared or paid, the record date
for which is before the date of issue of the Preferential Offering
Shares.
The terms and conditions of the Preferential Offering are
subject to such changes as the Directors may deem fit. The
procedures for, and the terms and conditions applicable to, the
applications and acceptances of the allotments of the Preferential
Offering Shares, including the different modes of acceptance or
application and payment, will be contained in an instruction
booklet to be issued by the Company in connection with the
Preferential Offering ("Instruction Booklet") and in the
application form for the Preferential Offering Shares. The
foregoing documents will be despatched by the Company to Entitled
Shareholders in due course. The despatch of the foregoing documents
will be announced in due course.
The Company decided to proceed with the Preferential Offering on
a non-underwritten basis as the Company believes that the
Preferential Offering Price of US$0.008 for each Preferential
Offering Share is sufficiently attractive. As mentioned in Section
4.4 below, the Preferential Offering Price represents a discount of
approximately 70.91% to the closing price of US$0.0275 per Share on
the AIM on 29 May 2012, being the last trading day prior to the
Company's trading suspension. Hence, in view of the above and the
savings enjoyed for not having to bear underwriting fees, the
Company has decided to proceed with the Preferential Offering on a
non-underwritten basis.
Depending on the level of subscription for the Preferential
Offering Shares, the Company will, if necessary, scale down the
subscription for the Preferential Offering Shares by any of the
substantial Shareholders (if such substantial Shareholder chooses
to subscribe for Preferential Offering Shares ) to avoid placing
the relevant substantial Shareholder and parties acting in concert
with it (as defined in the Singapore Code on Takeovers and Mergers
("Code")) in the position of incurring a mandatory general offer
obligation under the Code as a result of other Shareholders not
applying for any Preferential Offering Shares.
4.3 Eligibility to Participate in the Preferential Offering
The Preferential Offering is proposed to all Shareholders except
Perfection Group Limited. Hence, with the exception of Perfection
Group Limited, persons entitled to participate in the Preferential
Offering are registered holders of Shares in the principal register
of members of the Company maintained in Singapore or the branch
registers of members of the Company maintained in the United
Kingdom and the Channel Islands respectively ("Register of
Members"), except that where the registered holder is Computershare
Investor Services PLC ("Depository"), the term "Shareholders" shall
also include the depositors whose accounts maintained with the
Depository are credited with the Shares ("Entitled
Shareholders").
4.4 Purpose of the Preferential Offering and Use of Proceeds
The Preferential Offering Price of US$0.008 for each
Preferential Offering Share represents a discount of approximately
70.91% to the closing price of US$0.0275 per Share on the AIM on 29
May 2012, being the last trading day prior to the Company's trading
suspension.
If the Entitled Shareholders subscribe in full for all
600,000,000 Preferential Offering Shares, the estimated net
proceeds from the Preferential Offering will be approximately
US$4,624,000, after deducting professional fees and related
expenses amounting to approximately US$176,000 incurred in
connection therewith.
The Company intends to utilize the net proceeds from the
Preferential Offering for the general working capital purposes of
the Company and to develop the business and technologies of the
Company.
4.5 Conditions to the Preferential Offering
The Preferential Offering is subject to, inter alia:
(a) the admission of Preferential Offering Shares to trading on AIM becoming effective; and
(b) the approval of Shareholders of the Company for the
Preferential Offering and the Convertible Loan Facility at the
EGM.
An application will be made to the London Stock Exchange for the
Preferential Offering Shares to be admitted to trading on AIM, and
the expected trading date will be announced in due course.
5. PROPOSED AMENDMENT OF TERMS OF UNSECURED CONVERTIBLE LOAN
5.1 The Convertible Loan Facility
On 14(th) May 2010 the Company entered into an unsecured
convertible facility agreement ("Convertible Loan Facility") with
its Chairman, Christopher Nightingale, pursuant to which
Christopher Nightingale agreed to make available to the Company an
unsecured, interest free loan in the sum of US$2,000,000 for a
period expiring on 1(st) May 2012, convertible into Shares of the
company at the option of Christopher Nightingale at a price of
US$0.03 per Share. A further facility, on the same terms, in the
sum of US$1,000,000 was extended by Christopher Nightingale to the
Company on 28(th) February 2011, and a further facility on the same
terms was made by Christopher Nightingale to the Company on 28(th)
February 2012. At present the amounts outstanding to Christopher
Nightingale amount to approximately US$5,000,000 as at the date of
this Announcement and Christopher Nightingale has extended the
previous facilities on a rolling basis following the expiry of
their initial term on 1(st) May 2012.
5.2 Principal terms of the Revised Convertible Loan
The Directors of the Company with the exception of Christopher
Nightingale ("Independent Directors") have now agreed with
Christopher Nightingale on 3 October 2012, subject to shareholder
approval, to extend the current convertible loan facilities between
Christopher Nightingale and the Company for a period of a further
two years, subject to an increase in the overall facility offered
to the Company to US$7,000,000, and subject to the payment by the
Company of a nominal interest rate of 4% per annum, such interest
to be payable on amounts outstanding and to only be payable upon
redemption of the facility or conversion, and subject to the
conversion price to be amended to the same price as that made to
other Shareholders in the Preferential Offering, which is US$0.008
per Share ("Conversion Price) ("Revised Convertible Loan"). It is
further agreed that, in the event of redemption by the Company of
all or any part of the Revised Convertible Loan during its term,
the Company shall, at the time of pre-payment, grant Christopher
Nightingale an option to subscribe for such number of new shares in
the Company at the subscription price of US$0.008 at an aggregate
subscription amount equivalent to the amount of the prepayment,
which option shall expire on the same day as the expiry date of the
Revised Convertible Loan.
Christopher Nightingale shall have the option to convert the
Revised Convertible Loan at the Conversion Price upon the
fulfilment of all conditions precedent under the Revised
Convertible Loan. This option is exercisable in part or in full,
from time to time, provided any amount of the Revised Convertible
Loan remains outstanding.
The number of duly authorised, validly issued, fully paid and
unencumbered conversion shares ("Conversion Shares") to which
Christopher Nightingale is entitled to shall be determined by
dividing the amount of the Revised Convertible Loan entitled to be
converted, as determined above, by the Conversion Price.
The Conversion Price is subject to adjustment in the event of
changes in the capitalization structure of the Company, other than
in respect of the Placement, the issue of the Conversion Shares and
the Preferential Offering.
Assuming that the conversion of the Revised Convertible Loan
does not take place either fully or partially, the Company shall on
the repayment date repay all outstanding sums of the Revised
Convertible Loan, including the interest on the Revised Convertible
Loan, in United States dollars,
The Conversion Shares shall rank pari passu in all respects with
and carry all rights similar to the then existing Shares, except
that they will not rank for any dividend, right, allotment or other
distributions, the record date for which falls before the issue of
the Conversion Shares.
Under the terms of the Revised Convertible Loan, the resultant
maximum shareholding to be held by Christopher Nightingale will be
as follows:
Convertible Quantum Current number Maximum number Resultant
Loan Subscriber of Loan of shares of shares shareholding
(US$) in which Christopher to be issued (on an enlarged
Nightingale upon conversion(1) basis)(1)(2)
has a beneficial (%)
interest in
------------------ ---------- ---------------------- -------------------- -----------------
Christopher
Nightingale 7,000,000 950,000,666 875,000,000 52.05
------------------ ---------- ---------------------- -------------------- -----------------
Notes:
(1) On the assumption that Christopher Nightingale is entitled
to and elects to fully convert the Revised Convertible Loan
pursuant to the terms and conditions of the Revised Convertible
Loan.
(2) On the assumption that the Placement and Preferential
Offering are completed and fully subscribed for and based on the
Company's enlarged issued share capital of 3,506,547,331 Shares
following the Placement and Preferential Offering and conversion of
the Revised Convertible Loan (assuming that the Placement Price is
US$0.0206 (being at a 25% discount to the closing market price for
a Share of US$0.0275 as at the close of business on 29 May 2012,
being the trading day immediately prior to the Company's trading
suspension)). Christopher Nightingale currently has a beneficial
interest in 950,000,666 Shares in the Company, representing 50.37%
of the current issued share capital of 1,885,916,264 Shares.
The Revised Convertible Loan is subject to certain conditions
precedent, more particularly set out in the revised convertible
loan agreement ("Revised Convertible Loan Agreement"), including
but not limited to the following:
i. the approval of the Shareholders for the revision of the
terms and conditions of the Convertible Loan Agreement and the
allotment and issue of the Conversion Shares having been obtained
in a general meeting of the Shareholders; and
ii. the waiver by the Securities Industry Council ("SIC") being
obtained by Christopher Nightingale in relation to his obligation
and his concert parties (if any) or any of them to make a general
offer for all the Shares of the Company under Rule 14 of the Code
and such waiver not having been amended or revoked prior to
completion of the Revised Convertible Loan Agreement, and to the
extent that such waiver is subject to any conditions required to be
fulfilled prior to completion of the Revised Convertible Loan
Agreement, all such conditions having been fulfilled.
5.3 Whitewash Waiver
The issue of the Placement Shares will result in a decrease in
the shareholding interests of Christopher Nightingale from 50.37%
of the current issued share capital to 46.76% of the enlarged share
capital of the Company immediately after completion of the
Placement (on the assumption that the Placement Price is US$0.0206
(being at a 25% discount to the closing market price for a Share of
US$0.0275 as at the close of business on 29 May 2012, being the
trading day immediately prior to the Company's trading
suspension)).
The issue of the Preferential Offering Shares will result in a
further decrease in the shareholding interests of Christopher
Nightingale to 36.10% of the enlarged share capital of the Company
immediately after completion of the Placement and the Preferential
Offering (taking into account the Placement Shares and the
Preferential Offering Shares and on the assumption that the
Placement Price is US$0.0206 (being at a 25% discount to the
closing market price for a Share of US$0.0275 as at the close of
business on 29 May 2012, being the trading day immediately prior to
the Company's trading suspension)).
The issue of the Conversion Shares will result in an increase in
the shareholding interests of Christopher Nightingale to 52.05% of
the enlarged share capital of the Company immediately after
completion of the Placement, Preferential Offering and Revised
Convertible Loan Agreement (taking into account the Placement
Shares, Preferential Offering Shares and Conversion Shares and on
the assumption that the Placement Price is US$0.0206 (being at a
25% discount to the closing market price for a Share of US$0.0275
as at the close of business on 29 May 2012, being the trading day
immediately prior to the Company's trading suspension)).
Pursuant to Rule 14 of the Code, Christopher Nightingale and
parties acting in concert with him will be obliged to make a
mandatory general offer for the remaining Shares not owned,
controlled or agreed to be acquired by Christopher Nightingale and
parties acting in concert with him. A similar waiver was obtained
on 31(st) May 2010 in respect of Christopher Nightingale's previous
Convertible Loan Facility.
The Company will apply to the SIC for a waiver of the aforesaid
requirement. The waiver will be subject to, inter alia, the
approval from Shareholders independent of Christopher Nightingale
("Independent Shareholders") to waive such requirement ("Whitewash
Resolution"). An appropriate announcement on the outcome of such
application will be made in due course and further details will be
set out in the Circular which will be despatched to shareholders in
due course.
The Company has appointed Beaumont Cornish Limited as the
Independent Financial Adviser in relation to the Whitewash
Resolution.
Christopher Nightingale, his concert parties (if any) and
parties not independent of them shall abstain from voting on the
Whitewash Resolution. Christopher Nightingale and his concert
parties (if any) shall not acquire or shall not have acquired any
Shares or instruments convertible into and options in respect of
Shares of the Company (other than subscriptions for, rights to
subscribe for, instruments convertible into or options in respect
of new Shares which will be disclosed in the Circular):-
(a) during the period between the announcement of the proposed
Revised Convertible Loan Agreement and the date Shareholders'
approval is obtained for the Whitewash Resolution; and
(b) in the 6 months prior to the announcement of the proposal to
issue Conversion Shares pursuant to the proposed Revised
Convertible Loan Agreement but subsequent to negotiations,
discussions or the reaching of understandings or agreements with
the Directors of the Company in relation to such issue of
Conversion Shares under the Revised Convertible Loan Agreement.
To rely on the Whitewash Resolution, the Revised Convertible
Loan by Christopher Nightingale pursuant to the Revised Convertible
Loan Agreement must be completed within 3 months of the approval of
the Whitewash Resolution. For a Whitewash Resolution involving
convertibles, the acquisition of the Conversion Shares by
Christopher Nightingale upon the conversion of the Revised
Convertible Loan must be completed within 5 years of the date of
disbursement of the Revised Convertible Loan.
5.4 Conversion Price
The Conversion Shares will be issued at a price of US$0.008,
being the same price as the Preferential Offering Price. As the
volume weighted average trading price of the Shares traded on the
AIM on 29 May 2012 (being the last trading day immediately prior to
the time the Revised Convertible Loan Agreement is signed) is
US$0.0275, the Conversion Shares will be issued at a discount of
approximately 70.91% to the volume weighted average trading price
of the Shares traded on the AIM on 29 May 2012 (being the last
trading day immediately prior to the time the Revised Convertible
Loan Agreement is signed).
The Conversion Price was arrived at after negotiations between
Christopher Nightingale and the Company on a willing buyer and
willing seller basis.
5.5 Purpose of the Revised Convertible Loan Agreement and Use of Proceeds
The Company has already drawn approximately US$5,000,000 which
has been utilized for the general working capital purposes of the
Company. Any remaining amounts drawn by the Company will also be
used for general working capital purposes or to develop the
Company's business and technologies.
The change of terms of the Convertible Loan Facility is a
"related party" transaction under the AIM Rules, and accordingly
the Independent Directors, being all the Directors with the
exception of Christopher Nightingale, consider, having consulted
with the Company's nominated adviser, that the terms of the
transaction are fair and reasonable insofar as its shareholders are
concerned.
The original Convertible Loan Facility between Christopher
Nightingale and the Company was approved by Shareholders at the
Extraordinary General Meeting held on 31(st) May 2010. Approval
will be sought from Shareholders (excluding Christopher
Nightingale) for the Revised Convertible Loan at the Extraordinary
General Meeting to be held on or around 14 November 2012.
6. SALES CONTRACTS ENTERED INTO BETWEEN ALTERNATIVE ENERGY
HOLDINGS LIMITED ("AEHL"), A WHOLLY-OWNED SUBSIDIARY OF THE
COMPANY, AND ECOTECWORLD ENVIRONMENTAL PRODUCT GMBH ("ECOTECWORLD")
FOR THE SALE OF PHOTOVOLTAIC MODULES TO ECOTECWORLD FOR AN
AGGREGATE CONSIDERATION OF EUR9,408,150
AEHL, a wholly-owned subsidiary of the Company, entered into two
sales contracts with Ecotecworld on 21 August 2012 and 24 August
2012 for the sale of photovoltaic modules to Ecotecworld for an
aggregate consideration of EUR9,408,150. Ecotecworld is a
corporation incorporated in Germany and is involved in the business
of solar, LED, wind and other green energy technologies.
As at the date of this Announcement, these contracts have been
substantially completed, and both parties have performed their
obligations under the contracts. Under the contracts, 10% of the
purchase price under each contract was to be paid upon signing of
the agreements and the balance 90% of the purchase price was to be
paid in cleared funds before the goods were collected at
Rotterdam.
Pursuant to these sales contracts between AEHL and Ecotecworld,
AEHL and LDK have also entered into a back to back contract whereby
75% of the consideration for the photovoltaic modules supplied to
AEHL is to be paid upon delivery and the remaining 25% to be paid
within 45 days from delivery.
7. CHANGE OF FINANCIAL YEAR END FROM 31 AUGUST TO 31 DECEMBER
The Board wishes to inform Shareholders that it proposes to
change the Company's financial year end from 31 August to 31
December. Following the change in financial year, the current
financial year will cover a period of 16months from 1 September
2011to 31 December 2012. Thereafter, the financial year end of the
Company shall be 31 December of each subsequent year.
Following the change of financial year end, the Company will be
releasing its full year financial results for the period of
16months from 1 September 2011to 31 December 2012 latest by 30 June
2013. In accordance with the Singapore Companies Act, Cap. 50
("Singapore Companies Act"), the Company will hold its Annual
General Meeting ("AGM") by 27 July 2013.
The proposed change in financial year end is subject to the
approval of AIM.
In accordance with the Singapore Companies Act, the following
subsidiaries of the Company will also be changing their financial
year end to be in line with the proposed new financial year end of
the Company, which is 31 December:
1. Renewable Power Pte Ltd, a wholly owned subsidiary
incorporated in the Republic of Singapore;
2. Alternative Energy Technology Pte Ltd, a wholly owned
subsidiary incorporated in the Republic of Singapore;
3. Alternative Energy Limited, a wholly owned subsidiary
incorporated in the British Virgin Islands;
4. Alternative Energy Worldwide Limited, a wholly owned
subsidiary incorporated in the British Virgin Islands;
5. Alternative Energy (Africa) Limited, a wholly owned
subsidiary incorporated in the British Virgin Islands;
6. Alternative Energy (Middle East) Limited, a wholly owned
subsidiary incorporated in the British Virgin Islands;
7. Alternative Energy (Asia) Limited, a wholly owned subsidiary
incorporated in the British Virgin Islands;
8. Alternative Energy (Caribbean) Limited, a wholly owned
subsidiary incorporated in the British Virgin Islands;
9. Alternative Energy (Europe) Limited, a wholly owned
subsidiary incorporated in the British Virgin Islands; and
10. Alternative Energy Holdings Limited, a wholly owned subsidiary incorporated in Hong Kong.
8. RATIONALE FOR THE PLACEMENT, PREFERENTIAL OFFERING AND REVISED CONVERTIBLE LOAN
The Company has been engaging in research and development of its
core technologies and competence from its incorporation to date.
The signing of the MOU represents a major step towards the
commercialising of the products and expertise the Company has been
developing. The MOU with MUP validates the research and development
invested by the Company in previous years. With the background to
the solar industry changing, the closer relationship with LDK will
enable the Company to benefit from the dramatic reduction in
photovoltaic cell prices whilst the contract with MUP will provide
a solid revenue base for years to come. In order to prepare itself
for the new developments of its business, the Company has to raise
new working capital under the primary EPC role in the "1000 Island"
Project. Accordingly, the Company has entered into the Placement
and other fundraising transactions as set out in this Announcement
to ensure sufficiency of its working capital for its developing
business.
In addition, the Preferential Offering will allow existing
shareholders the opportunity to acquire additional Shares in the
Company at a significantly lower price than the market price and to
mitigate the effects of the dilution due to the option granted to
MUP.
Finally, the Chairman, Christopher Nightingale, has been
supporting the Company through its final R&D stages as well as
marketing the technologies through the convertible loan which has
been unsecured and interest-free. Further, the Convertible Loan
Facility has expired and been extended on a rolling basis and
therefore it is necessary for the Company to find a longer term
arrangement in respect of sums borrowed from its Chairman. As he is
not participating in the Preferential Offering, the Independent
Directors agreed to amend the terms of the Convertible Loan and
revise the conversion price to be similar to the Preferential
Offering Price. As both the Preferential Offering and the Revised
Convertible Loan are intended to reward existing stakeholders, they
will therefore be presented as inter-conditional resolutions to
shareholders of the Company for approval.
9. INTERESTS OF DIRECTORS AND SUBSTANTIAL SHAREHOLDERS
Save for Christopher Nightingale who is the Chairman and will be
interested in the Revised Convertible Loan, none of the Directors
or substantial shareholders of the Company has any interest, direct
or indirect, in the above transactions (other than through their
shareholdings in the Company).
10. DIRECTORS' RESPONSIBILITY STATEMENT
The Directors (including any Director who may have delegated
detailed supervision of the preparation of this announcement) have
taken all reasonable care to ensure that the facts stated in this
announcement are fair and accurate and that no material facts have
been omitted therefrom, and they jointly and severally accept
responsibility accordingly.
11. CAUTION IN TRADING
Shareholders are advised to exercise caution when dealing in the
Shares of the Company. The Heads of Agreement, Supplemental Heads
of Agreement, Memorandum of Understanding and Heads of Terms of
Placement are not definitive and are therefore subject to changes
and will in any event be subject to the execution of final binding
agreements. There is no certainty or assurance as at the date of
this Announcement that the Preferential Offering and Revised
Convertible Loan Agreement will be completed, or that no changes
will be made to the terms thereof. The Company will make the
necessary announcements when there are further developments on the
Heads of Agreement, Supplemental Heads of Agreement, Memorandum of
Understanding, Heads of Terms of Placement, Preferential Offering
and Revised Convertible Loan. Shareholders are advised to read this
announcement and any further announcements by the Company
carefully. Shareholders should consult their stock brokers, bank
managers, solicitors or other professional advisors if they have
any doubt about the actions they should take.
The Board considers that all of the above developments will have
a significant impact on the Company and will ensure that the
Company is properly funded and profitably utilizing the
technologies which it has developed over the past five years. The
Board considers that the above developments are in the best
interests of the Company and the Shareholders as a whole.
By Order of the Board
Alternative Energy Limited
Christopher Nightingale
Executive Chairman
4 October 2012
END
For further information, please contact:
Richard Lascelles, Independent Non-executive Director Tel: 020
7408 1067
Roland Cornish, Beaumont Cornish Limited Tel: 020 7628 3396
Eric Goh, Executive Director Tel: +65 68737782
This information is provided by RNS
The company news service from the London Stock Exchange
END
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