Low Carbon Accelerator Limited Recommended proposals and Circular to Shareholders (0604G)

TIDMLCA

RNS Number : 0604G

Low Carbon Accelerator Limited

31 May 2013

31 May 2013

LOW CARBON ACCELERATOR LIMITED

(the "Company")

Recommended proposals for the cancellation from AIM, voluntary winding up of the Company and posting of Circular to Shareholders

The Company has today posted a Circular to Shareholders convening an Extraordinary General Meeting ("EGM")to take place at Ogier House, St Julian's Avenue, St Peter Port, Guernsey, GY1 1WA at 10.30 a.m. on 1 July 2013 to consider the board's proposals for the cancellation of the Company's admission to AIM and the voluntary winding up of the Company.

In accordance with Rule 41 of the AIM Rules, the Company has notified the London Stock Exchange of its intention to cancel the admission of the Ordinary Shares to trading on AIM, subject to Shareholder approval. Under the AIM Rules, it is a requirement that the Cancellation is approved by the requisite majority of Shareholders voting at the EGM (being not less than 75 per cent. of the votes cast).

Subject to the Resolution approving the Cancellation being passed at the EGM, it is anticipated that Cancellation will take effect on 2 July 2013. Further details of the proposals are set out below.

Enquiries:

 
 Company Advisor 
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 Steve Mahon                     [phone] 
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 Grant Thornton UK LLP 
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 Colin Aaronson or Jen Clarke    [phone] 
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Introduction

On 15 January 2013, Low Carbon Accelerator Limited announced that it had entered into a Stock Purchase Agreement with Sterling Planet Holdings, Inc. to sell its entire holdings in Sterling Planet Holdings, Inc., Lumenergi, Inc. and Vigor Renewables Limited (the "Assets") for a total cash consideration of US$4.4m (c.GBP2.74m), representing the disposal of substantially all of the value in the Company's portfolio. As announced on 15 January 2013, the Company is writing to Shareholders to outline its plans for the distribution of capital, the liquidation of the Company and the cancellation of LCA's admission to trading on AIM.

The Board has today announced that the Company would convene a meeting of Shareholders in order to consider the Board's recommended proposals for the voluntary winding up of the Company. A Circular has been posted to Shareholders explaining why the Board is seeking approval for the cancellation of admission of the Company's Shares to trading on AIM and for the Company to be placed into liquidation (the "Proposals").

The voluntary winding up of the Company is conditional on the approval of Shareholders at the EGM convened to be held at 10.30 a.m. on 1 July 2013.

If Shareholders approve the Proposals, the admission of the Shares to AIM will be cancelled and the Company will be placed in members' voluntary liquidation in accordance with the provisions of the Law and that the cash proceeds of the Liquidation made available for distribution to Shareholders. If Shareholders do not approve the Proposals, the Directors will consider what further action to take at that time.

Background to the Proposals

The Company is a closed-ended investment company which is incorporated in Guernsey and which is managed by Low Carbon Investors Limited (the "Manager"). The Company was incorporated with limited liability in Guernsey under the Law on 26 September 2006 with registered number 45536 and was admitted to trading on AIM on 11 October 2006, having raised by way of a placing GBP44,500,000 through the issue of 44,500,000 Shares at GBP1 each.

The Company's investment mandate was to provide Shareholders with an attractive return on their investment primarily through significant minority holdings in a diverse portfolio of unquoted private companies providing low carbon products and services. The Company executed this strategy by building a portfolio of investments in potentially high growth businesses which were early stage in nature, being either pre-revenue or yet to achieve profitable operation.

Reasons for the Liquidation

On 19 September 2011, the Company announced that Proven Energy Limited, which represented the Company's largest investment, had been placed in receivership.

Largely as a result of the write-down of its investment in Proven Energy Limited, the NAV of the Company and its subsidiaries (together the "Group") as at 30 November 2011 was GBP24.3 million, equivalent to 28.2 pence per Ordinary Share, equating to a 53.3% decrease on the 30 November 2010 Adjusted NAV of 60.3 pence per Ordinary Share.

After consultation with major shareholders, and in view of the length of time which LCA has already held its investments and the current sub-scale nature of the fund, the Company, with the support of the Manager, announced its decision to implement a programme of planned realisations to deliver liquidity to shareholders.

On 27 April 2012, the Company announced the appointment of Cogent Partners to assist in the marketing and sale of the LCA portfolio. The Company has been actively marketing its assets since May 2012 in a process managed by Cogent Partners. Potential purchasers were identified and after a period of detailed due diligence and negotiation of terms, the Company has agreed to sell the Assets to Sterling Planet Holdings, Inc.

In proposing that the Company be wound up, the Directors have had regard for the limited trading in the Shares, the decreasing level of interest from investors in the Company as well as the increasing proportion of the Company's value that would be expended on the operating costs of the Company. In addition, the Directors have taken account of the following factors:

-- the desire on the part of some shareholders to realise their investment in cash; and

-- liquidation of the Company would enable Shareholders to dispose of their Shares free of dealing costs.

Liquidation of the Company

As noted above, it is proposed that the investment portfolio will be fully realised and it is therefore proposed that the Company be placed in members' voluntary liquidation in accordance with the provisions of the Law and that the Company's net assets available for distribution on such winding up be distributed to Shareholders.

The Liquidators will set aside sufficient assets in a Liquidation Fund to meet the Company's liabilities including the estimated costs of the Proposals. The Liquidators will also provide in the Liquidation Fund for a Retention, which they consider sufficient to meet any contingent and unknown liabilities of the Company. This Retention is currently expected not to exceed GBP100,000.

On the basis of the unaudited net asset value of the Company as at 30 April 2013, the assets of the Company available for distribution on liquidation would be approximately GBP3,437,000 (which amount includes provision for the Liquidation Fund), which is equivalent to approximately 3.99 pence per Share in issue although the amount finally distributed may be different from the amounts indicated above due to a variety of factors including the ongoing costs payable during the liquidation and settlement of any currently unknown or contingent liabilities. As at the date of posting, the Company is awaiting the final payment from Sterling Planet of $1.2m, due on 17 July 2013.

Liquidation distribution(s)

The appointment of the Liquidators and the commencement of the winding up of the Company will take effect immediately upon the passing of the Resolution. The Liquidators expect to make an initial capital distribution to Shareholders on the Register at the close of business on 1 July 2013 on or around 2 September 2013. Any unutilised amount within the Liquidation Fund will potentially be available for future distributions to Shareholders.

Dealings and Guernsey regulatory notification

Application will be made to AIM for dealings in the Shares to be suspended on AIM at 7.00 a.m. on 1 July 2013.

The Register will be closed at the close of business on 1 July 2013 and the Shares will also be disabled in CREST at the close of business on 1 July 2013. Transfer requests received after the Register has been closed will be returned to the person lodging them.

After the liquidation of the Company and the making of any final distribution, existing certificates in respect of Shares will cease to be of value and any existing credit of Shares in any stock account in CREST will be redundant.

If the Resolution is approved, it is the Company's intention to apply to cancel the admission of the Shares to trading on AIM and it is expected that such admissions will be cancelled on 2 July 2013.

The Guernsey Financial Services Commission has already been notified of the intention for the Company to delist, surrender its authorisation as a closed-ended collective investment scheme in Guernsey and pursue a members' voluntary winding-up and will be updated should the proposals be implemented.

This information is provided by RNS

The company news service from the London Stock Exchange

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