Chairman's Letter to Shareholders (2537N)

TIDMIEL

RNS Number : 2537N

Indian Energy Limited

30 August 2011

30 August 2011

Indian Energy Limited ("Indian Energy")

Chairman's Letter to Shareholders

Indian Energy announces that a letter from the Company's Chairman has today been posted to Shareholders. The contents of the letter are set out below:

Dear Shareholder,

It has come to your Board's attention that a shareholder in the Company has written to a number of other shareholders encouraging them not to vote in favour of the Scheme and the Utilico Loan Conversion at the forthcoming Court Meeting and EGM respectively on 5 September 2011. This shareholder is of the belief that CLP Holdings Limited (CLP), a Hong Kong power company, is interested in acquiring IEL's operating assets and believes that if such a transaction were to be concluded, this would result in a more favourable outcome for shareholders than the Proposal outlined in the Scheme Document sent to you on 10 August 2011 and which has been recommended by your Board.

I believe that it is important that I write to all shareholders in the Company to clarify certain matters relating to any alternative proposal and to urge you strongly to vote in favour of the currently proposed Scheme. Words and phrases used in this letter are as defined in the Scheme Document.

As announced on 23 December 2010, the Board commenced a process to evaluate whether an offer for IEL could be obtained while it was still considering its funding options. This process has involved exploring a variety of possibilities with a broad range of possible acquirers or partners. Each party that indicated a serious interest in engaging in a transaction with IEL was invited to enter an electronic data room where all relevant information was made available.

IEL initially spoke to CLP in January this year. They indicated to us that they might be interested in acquiring our operational assets, but not the group as whole. At that time we had various indicative offers for all of the issued shares of IEL, which in the opinion of the Board would have created significantly more value for IEL shareholders than an asset sale after taking into account the value of the assets and the costs of liquidating the group and returning cash to shareholders. A possible transaction with CLP was therefore not pursued.

At the time of agreeing the offer from IIP, the Board of IEL compared the IIP offer to a sale of IEL's operational assets to CLP or any other party and concluded that the IIP offer represented the best value we could achieve for our shareholders. This decision was based on a number of considerations, including the uncertainty of timing and value of an asset sale as well as the possibility of the perception of a "fire sale" of the assets which could be very detrimental to shareholder value.

The Board does not believe that it is in the interests of shareholders for IEL to seek to engage with CLP or any other third party at this time with a view to concluding an alternative transaction as this would put under serious risk the successful completion of the current Scheme agreed with IIP.

Consequences of Voting Against the Scheme and Utilico Conversion

I wish to also draw your attention to the consequences of voting against the Scheme and the Utilico Loan Conversion. We reported in the announcement of our Preliminary Results for the year ended 31March 2011 and in the Consolidated Financial Statements for the year ended 31March 2011 that the financial statements had been prepared on a going concern basis based on the Board recommending the Offer from IIP. Should the Scheme not be approved, there is a significant risk that the group cannot continue to trade as a going concern and, therefore, that IEL would not be in a position to seek alternative offers or conclude a properly priced sale of its assets.

In summary, there is nothing to preclude CLP making an offer for IEL, but we have received no indication that they are intending to make such an offer. Your Board therefore continues to believe that the terms of the Scheme are fair and reasonable and that it offers the best possible outcome for shareholders in the current circumstances.

Update on IIP acquisition of VLMS

I also believe it is important that you are aware of the fact that IIP has been granted regulatory approval for the acquisition of the remaining stake in VLMS, and I attach IIP's recent announcement regarding this.

This announcement can also be viewed online by visiting

http://www.investegate.co.uk/Article.aspx?id=201108171503005507M

Yours sincerely.

John Wallinger

Non-Executive Chairman

This letter is not intended to and does not constitute or form any part of, an offer to sell or an invitation to purchase or the solicitation of an offer to subscribe for any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Offer or otherwise, nor shall there be any purchase, sale or exchange of securities or such solicitation in any jurisdiction in which such offer, solicitation or sale or exchange would be unlawful prior to registration or qualification under the laws of such jurisdiction.

If you are in any doubt as to the action you should take, you are recommended to seek your own financial advice immediately from your stockbroker, bank manager, solicitor, accountant or other independent professional adviser who, if you are taking advice in the United Kingdom, is authorised pursuant to the Financial Services and Markets Act 2000, or from an appropriately authorised independent financial adviser if you are in a territory outside the United Kingdom.

The distribution of this letter in jurisdictions other than the United Kingdom may be restricted by the laws of those jurisdictions and therefore persons into whose possession this letter comes should inform themselves about, and observe any such restrictions. Failure to comply with any such restrictions may constitute a violation of the securities laws of any such jurisdiction.

Unless otherwise determined by IIP and/or IEL, or required by the Code and permitted by applicable law and regulation, the Offer is not being, and will not be made, directly or indirectly, in or into or by the use of the mails of, or by any other means (including, without limitation, electronic mail, facsimile transmission, telex, telephone, internet or other forms of electronic communication) of interstate or foreign commerce of, or any facility of a national securities exchange of any Restricted Territory and will not be capable of acceptance by any such use, means or facility or from within any such Restricted Territory. Accordingly, unless otherwise determined by IIP and/or IEL, copies of this letter and any other documentation relating to the Offer are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from any Restricted Territory and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send any such documents in or into or from any such Restricted Territory. Any person (including, without limitation, custodians, nominees and trustees) who would, or otherwise intends to, or who may have a contractual or legal obligation to, forward this letter and/or any other related document to any jurisdiction outside the United Kingdom should inform themselves of, and observe, any applicable legal or regulatory requirements of any relevant jurisdiction. Neither the SEC nor any US state securities commission has approved or disapproved the Offer or passed upon the adequacy or completeness of this letter or any other documentation relating to the Offer. Any representation to the contrary is a criminal offence.

This letter does not constitute an offer to buy or to subscribe for, or the solicitation of an offer to buy or subscribe for, shares in any jurisdiction in which such offer or solicitation is unlawful. In particular, the New IIP Shares have not been, and will not be, registered under the US Securities Act or qualified for sale under the laws of any state of the United States or under the applicable laws of any of the Restricted Territories and, subject to certain exceptions, may not be offered or sold in the United States or to, or for the account or benefit of any national, resident or citizen of a Restricted Territory. Neither this letter nor any copy of it may be distributed directly or indirectly to any persons with addresses in the Restricted Territories, or to any corporation, partnership or other entity created or organised under the laws thereof, or in any other country outside the United Kingdom or Guernsey where such distribution may lead to a breach of any legal or regulatory requirement. This letter has been prepared for the purposes of complying with Guernsey law, the AIM Rules and the City Code and the information disclosed may not be the same as that which would have been prepared in accordance with the laws and regulations of any jurisdiction outside Guernsey.

DEALING DISCLOSURE REQUIREMENTS

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any paper offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the Offer Period and, if later, following the letter in which any paper offeror is first identified.

An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 p.m. (London time) on the 10th business day following the commencement of the Offer Period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the letter in which any paper offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a paper offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any paper offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any paper offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 p.m. (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a paper offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the Offer Period commenced and when any offeror was first identified. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel's Market Surveillance Unit on [phone].

PUBLICATION ON WEBSITE

A copy of this letter will be made available on IEL's website at www.indian-energy.com as soon as possible.

Enquiries:

 
Indian Energy Limited         Tel: [phone] 
Rupert Strachwitz 
 
Arden Partners Plc            Tel: [phone] 
Chris Hardie / Jamie Cameron 
 
Pelham Bell Pottinger         Tel: [phone] 
Archie Berens 
 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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