Renewable Energy Holdings plc Commencement of winding up proceedings (7974T)

TIDMREH

RNS Number : 7974T

Renewable Energy Holdings plc

31 March 2016

31 March 2016

Renewable Energy Holdings plc

("REH" or the "Company")

Commencement of winding up proceedings,

resignation of nominated adviser and

probable cancellation of admission of the Company's ordinary shares to trading on AIM

The board of directors of REH (the "Board") announces that, following extensive deliberations, both internally and with the Company's advisers, it has today filed a winding up claim with the High Court of Justice of the Isle of Man (the "Court") in order to commence liquidation proceedings in accordance with the Isle of Man Companies Acts 1931 and the Winding Up Rules of 1934 (the "Liquidation") as the Board has reached the conclusion that there is no prospect of repaying the outstanding debts.

Background to the Liquidation

REH has borrowed extensively from UIL Limited (formerly Utilico Investments Limited) ("the Lender") over the previous seven years, in order to fund its operations. The first loan of GBP2.5 million dates back to July 2009 (the "2009 Loan") and a subsequent facility of GBP4.25 million was agreed in stages from February 2013 (the "2013 Loan). Together with accrued interest, these loans now amount to approximately GBP10.0 million and mature on 31st March 2016 (together, the " Loans").

The reason for the 2013 Loan was principally to allow REH to progress the planning application for the Mynydd y Gwynt onshore wind farm ("MYG") in mid Wales. The outstanding amounts were to be repaid from the sale of assets and the refinancing of the company once consent had been obtained.

In accordance with the terms of the Loans, the Board has formally notified the Lender of its financial position and is now seeking a Court Appointed Liquidator to manage a winding up of the Company. The Board expects the Lender to register its preferential rights and to take control of the Company's remaining assets with the liquidator in due course.

Summary of the Company's assets

MYG

Following the UK general election in May 2015 the UK Government changed its policy as regards onshore wind and, on 18 June 2015, the Secretary of State for Energy and Climate Change, Amber Rudd, said: "we are driving forward our commitment to end new onshore wind subsidies... we now have enough subsidised projects in the pipeline to meet our renewable energy commitments".

The Secretary of State confirmed this new policy in November 2015 when she refused permission for MYG, despite a recommendation to approve the project by the Independent Planning Examiner. An application for permission to seek a Judicial Review of the Secretary of State's decision was lodged on 24 December 2015 and has subsequently been refused. A renewal application was submitted within the seven day deadline and an Oral Hearing date for permission to apply for judicial review is scheduled for 9 June 2016 in Cardiff.

The situation in mid Wales remains very uncertain with no likelihood of a new grid sub-station being constructed within the life of any possible MYG permits, even if the Judicial Review successfully persuaded the Secretary of State to consent the project.

Poland

Despite extensive marketing, no buyers for Kobylany project have been identified and, as a result of an inability to pay the second stage of the grid connection fee, the grid connection contract has recently been cancelled by PGE Distribution (the electricity network operator), which further erodes the value of the project and makes identifying potential purchasers less likely.

Carnegie

REH's shares in Carnegie Wave Energy Limited ("CWE"), along with the Polish wind farm permits and the preference shares in MYG, have formed part of the loan security held by The Lender. The value, as at close of trading on 31 March 2016, of the Company's holding in Carnegie was approximately GBP2.2 million.

Although it will be for the Court Appointed Liquidator to decide, the Board considers the remaining assets to be currently valued at considerably less than the outstanding GBP10 million liabilities and as a result it is expected that there will be no net proceeds for REH shareholders and no in specie distribution of CWE shares.

Resignation of nominated adviser and cancellation of admission to trading on AIM

Having commenced liquidation proceedings which are likely to result in the eventual dissolution of the Company, it is important that the Board does all that it can to protect any remaining stakeholder value. To this end, the Board has consulted with Strand Hanson Limited ("Strand Hanson"), the Company's nominated adviser, and agreed that Strand Hanson will resign with immediate effect, resulting in the automatic cancellation of REH's ordinary shares from trading on the AIM Market of the London Stock Exchange ("AIM") in 30 days, should the Company not appoint a replacement nominated adviser within that time ("Cancellation"). Pending Cancellation, the Company's ordinary shares will remain suspended from trading on AIM.

**ENDS**

 
 Renewable Energy Holdings 
  plc: 
 David Weir (Chairman) 
  Clive Callister (Chief 
  Operating Officer)          [phone] 
 
 
 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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March 31, 2016 13:00 ET (17:00 GMT)