Aggregated Micro Power Holdings PLC Proposed Capital Reduction and Notice of EGM (8926H)

TIDMAMPH

RNS Number : 8926H

Aggregated Micro Power Holdings PLC

16 March 2018

Aggregated Micro Power Holdings plc

("AMP", the "Company" or the "Group")

Proposed Capital Reduction

Notice of General Meeting

Aggregated Micro Power Holdings plc (AIM: AMPH), a distributed energy company specialising in the sale of wood fuels and the financing and installation of distributed energy projects including biomass boiler ESCOs (Energy Supply Contracts), stand by power generation and battery storage facilities, announces that the Company will later today post a circular (the "Circular") to shareholders of the Company (the "Shareholders") detailing a proposed capital reduction of the Company's share premium account (the "Capital Reduction") and to convene a general meeting of the Company (the "General Meeting"), the purpose of which is to enable Shareholders to approve the Capital Reduction.

The Company does not currently have distributable reserves and is therefore prohibited from making distributions to Shareholders, including the payment of dividends. The Board believes it is an appropriate time to create distributable reserves, which, should it be considered desirable to do so, would allow the Company to pay dividends in the future, and is therefore proposing the Capital Reduction to effect this.

A copy of the Circular will shortly be available on the Company's website at www.ampplc.com.

Below are extracts from the Circular which should be read in conjunction with the full text. Defined terms used in this announcement have the meaning ascribed to them in the Circular.

Background to and reasons for the Capital Reduction

As set out in the audited accounts of the Company for the year ended 31 March 2017, the share premium account of the Company totalled GBP12,519,616 and the Company had a profit and loss account deficit of GBP11,051,996. The share premium account was further increased in November 2017 in connection with a placing by the Company and as at the date of this Circular stood at GBP22,726,487. A share premium account is an undistributable reserve and, accordingly, the purposes for which the Company can use it are extremely restricted. The Capital Reduction aims to eliminate the profit and loss deficit and create distributable reserves for the Company by cancelling the amount standing to the credit of the share premium account and transferring it to the Company's profit and loss account.

By reducing its capital in this way, the Company increases its flexibility to pay dividends in the future, subject to the financial performance of the Company. However, the Company has not made any capital reduction or decision as to the use of any positive distributable reserves generated from the Capital Reduction. Should Shareholders vote in favour of the Capital Reduction and court approval for the Capital Reduction is obtained, this process will not conclude until May 2018 and therefore the Company does not intend to pay a dividend in respect of the financial year ending 31 March 2018.

The Capital Reduction is conditional upon the passing of the Resolution set out in the notice of the General Meeting, as well as Court approval being obtained.

Principal terms of and conditions to the Capital Reduction

Under the 2006 Act, companies are only permitted to make distributions to shareholders from distributable reserves.

In order to eliminate the deficit on the Company's profit and loss account and create distributable reserves, it is proposed that the balance standing to the credit of the share premium account be cancelled.

This cancellation, if approved by the Court, will create realised profits that may be transferred to a special reserve, which would remain pending the protection or consent of any creditors (or contingent creditors) of the Company in existence at the date of the Capital Reduction (if any). Alternatively, the Court may dispense with the requirement for the creation of a special reserve and the realised profits may be credited directly to the Company's profit and loss account.

In the instance that a special reserve is required, any distributions made by the Company must be paid out of profits of the Company earned subsequent to the date of the Capital Reduction. The special reserve can also be eliminated if the creditors at the time of the Capital Reduction are protected through other means (such as bank guarantees or blocked accounts). It should be noted that the Company may need to offer undertakings to the Court in this regard. Subsequent losses of the Company can reduce the special reserve (such losses being applied to this reserve rather than the profit and loss account).

As directed by the 2006 Act, the Capital Reduction requires approval of the Shareholders and then subsequent confirmation of the Court. If the Capital Reduction is passed by the Shareholders, it is anticipated that proceedings to obtain confirmation from the Court will be undertaken as soon as possible. The final hearing where the Court may confirm the Capital Reduction is to take place on or around 1 May 2018.

Following the implementation of the Capital Reduction, there will be no change in the nominal value of the Ordinary Shares or the number of Ordinary Shares in issue. No new share certificates will be issued as a result of the Capital Reduction.

The Capital Reduction per se will not involve any distribution or repayment of share premium by the Company and will not reduce the underlying net assets of the Company.

The General Meeting

Implementation of the Capital Reduction requires the Resolution to be passed at the General Meeting, which is to be held on 11 April 2018 at 10.00 a.m. Notice of the General Meeting is given on page 8 of the Circular.

This contains the Resolution which will be proposed as a special resolution at the General Meeting, the passing of which will require not less than 75 per cent. of the votes cast voting in favour of the Resolution.

In summary, the Resolution proposes to cancel the amount standing to the credit of the share premium account.

Directors' recommendation

The Directors consider the Capital Reduction to be in the best interests of the Company and its Shareholders as a whole.

Accordingly, the Directors unanimously recommend that Shareholders vote in favour of the Resolution to be proposed at the General Meeting as the Directors intend to do in respect of 11,135,700 Ordinary Shares which in aggregate they beneficially own or control, representing approximately 25.8 per cent. of the existing issued ordinary share capital of the Company.

Expected Timetable of Principal Events

 
 Publication of this document          16 March 2018 
 Latest time and date for receipt    10.00 a.m. on 9 
  of Forms of Proxy                       April 2018 
 Last time and date for receipt      10.00 a.m. on 9 
  of CREST Proxy Instructions             April 2018 
 General Meeting                    10.00 a.m. on 11 
                                          April 2018 
 Date of Court hearing to confirm         1 May 2018 
  the Capital Reduction 
 Capital Reduction takes effect           2 May 2018 
  on or around 
 

The dates and times given in this Circular are based on the Company's current expectations and may be subject to change. If any of the details contained in the timetable above should change, the revised times and dates will be notified to Shareholders by means of an announcement through a Regulatory Information Service. All references to time and dates in this circular are to time and dates in London.

Enquiries:

Aggregated Micro Power Holdings plc Tel: [phone]

Neil Eckert, Executive Chairman

Richard Burrell, CEO

Helene Crook, Investor Relations

finnCap Ltd (NOMAD & Broker) Tel: [phone]

Ed Frisby/Simon Hicks (corporate finance)

Stephen Norcross/Sultan Awan (corporate broking)

Haggie Partners (Financial PR) Tel: [phone]

Peter Rigby/Brian Norris

Notes to Editors:

About Aggregated Micro Power Holdings plc

The AMP Group was established to develop, own and operate renewable energy generating facilities. It specialises in the sale of wood fuels and in the installation of distributed energy projects. AMP's wholly owned subsidiary Forest Fuels sells high quality wood chip and wood pellet to end customers throughout the UK, while its projects division installs biomass boiler and biomass CHP systems for a wide range of applications and customers. AMP is also active in developing projects for stand-by power generation and battery storage facilities which aim to balance the transmission grid at times of peak demand. www.ampplc.co.uk

www.ampplc.co.uk

The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

This information is provided by RNS

The company news service from the London Stock Exchange

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March 16, 2018 03:00 ET (07:00 GMT)