RNS Number : 6454W
Suez Energy South America
13 June 2008
FOR IMMEDIATE RELEASE
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION
13 June 2008
Cash offer for Econergy International plc by
Suez Energy South America Participaes Ltda.
Summary
Suez Energy South America Participaes Ltda. ("SESA") is today pleased to announce the terms of an all cash offer to acquire the entire
issued and to be issued share capital of Econergy International plc ("Econergy") at a price of 45 pence per Econergy Share. The Offer will
be made by SESA or a subsidiary of SESA. The ultimate parent of SESA is Suez S.A.
The Offer values the entire issued ordinary share capital of Econergy at approximately �39.2 million and represents a premium of
approximately:
* 50 per cent. to the cash alternative available under the Trading Emissions proposal of 30 pence per Econergy Share;
* 43.1 per cent. to the current implied value of the Trading Emissions proposal of 31.5 pence per Econergy Share, based on the
Closing Price of 135 pence per Trading Emissions Share on 12 June 2008, the last Business Day prior to the date of this Announcement; and
* 91.5 per cent. to the Closing Price of 23.5 pence per Econergy Share on 9 April 2008, being the date prior to the announcement by
Econergy that it had received a number of preliminary approaches.
SESA is also making available to Econergy loan facilities of over US$50 million subject to, among other things, SESA receiving
undertakings to accept the Offer in respect of more than 50 per cent. of the issued share capital of Econergy.
SESA hopes that, when free to do so, the Independent Econergy Directors will recommend that Econergy Shareholders accept the Offer.
Commenting on the offer, Jan Flachet, officer of SESA and CEO of Suez Energy Latin America, said: "We consider Econergy to be a perfect
fit and complementary to our international energy portfolio. Econergy has and is developing a series of interesting renewable assets, such
as wind and small hydro, in markets where Suez Energy already has a presence or aspires to take positions. Econergy will also contribute to
Suez's know-how on carbon credits and non-conventional renewables. The financial strength of SESA, as well as our proven track record in
the development and operation of renewable power plants in Latin America, will contribute to realising Econergy's ambitious sustainable
projects."
Enquiries
Dresdner Kleinwort (Financial adviser and broker to Tel: +44 20 7623 8000
SESA)
Rosalind Hedley-Miller
Ben Bailey
Brunswick Group (Financial PR adviser to SESA) Tel: +44 (0)207 404 5959
Andrew Garfield
The Offer Document, setting out details of the Offer, will be posted to Econergy Shareholders and, for information only, to participants
in the Econergy Stock Option Plan as soon as practicable and, in any event, within 28 days of this Announcement or such period as may
otherwise be agreed with the Panel.
This summary should be read in conjunction with the full text of the following Announcement and the Appendices.
The Offer will be subject to the Conditions and further terms set out in Appendix 1 to this Announcement and to the full terms and
conditions to be set out in the Offer Document and, in the case of Econergy Shares held in certificated form, in the Form of Acceptance
accompanying the Offer Document. Appendix 2 to this Announcement contains source notes relating to certain information contained in this
Announcement. Certain terms used in this Announcement are defined in Appendix 3 to this Announcement.
This Announcement is not intended to and does not constitute or form part of an offer to sell or subscribe for or an invitation to
purchase or 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 sale, issue or transfer of securities referred to in this Announcement in any jurisdiction where to do so would be in
contravention of any applicable law. Any response in relation to the Offer should be made only on the basis of the information in the Offer
Document (which will contain the full terms and conditions of the Offer including how it may be accepted) and, in the case of Econergy
Shares held in certificated form, in the accompanying Form of Acceptance, or any document by which the Offer is made. SESA urges Econergy
Shareholders to read the Offer Document when it becomes available because it will contain important information relating to the Offer.
Dresdner Kleinwort Limited, which is authorised and regulated by the Financial Services Authority, is acting for SESA and for no one
else in connection with the Offer and will not be responsible to anyone other than SESA for providing the protections afforded to clients of
Dresdner Kleinwort Limited or for affording advice in relation to the Offer or any other matters referred to in this Announcement.
Econergy Shareholders in overseas jurisdictions
The availability of the Offer to Econergy Shareholders who are not resident in and citizens of the Isle of Man or the United Kingdom may
be affected by the laws of the relevant jurisdictions in which they are located or of which they are citizens. Such persons should inform
themselves of, and observe, any applicable legal or regulatory requirements of their jurisdictions. Further details in relation to Overseas
Shareholders will be contained in the Offer Document.
The distribution of this Announcement in jurisdictions other than the Isle of Man or the United Kingdom may be restricted by law and
therefore any persons who are subject to the laws of any jurisdiction other than the Isle of Man or the United Kingdom should inform
themselves about, and observe, any applicable requirements. This Announcement has been prepared for the purposes of complying with English
law and the City Code and the information disclosed may not be the same as that which would have been disclosed if this Announcement had
been prepared in accordance with the laws of any jurisdiction outside the Isle of Man or the United Kingdom.
The Offer is not to be made, directly or indirectly, in, into or from any jurisdiction where to do so would violate the laws in that
jurisdiction. Accordingly, copies of this Announcement and formal documentation relating to the Offer will not be, and must not be, mailed
or otherwise forwarded, distributed or sent in, into or from any jurisdiction where to do so would violate the laws and/or regulations in
that jurisdiction unless otherwise determined by SESA and subject to any dispensation required by the Panel.
Notice to US investors
The Offer relates to the shares in an Isle of Man company and is subject to disclosure requirements which are different from those of
the United States.
The settlement procedure with respect to the Offer will be consistent with UK practice, which differs from US domestic tender offer
procedures in certain material respects, particularly with regard to date of payment.
Neither the SEC nor any securities commission of any state of the United States has (a) approved or disapproved of the Offer; (b) passed
upon the merits or fairness of the Offer; or (c) passed upon the adequacy or accuracy of the disclosure in this Announcement. Any
representation to the contrary is a criminal offence in the United States.
Cautionary note regarding forward-looking statements
This Announcement, including information included or incorporated by reference in this Announcement, oral statements made regarding the
Offer, and other information published by SESA may contain "forward-looking statements". These statements are based on the current
expectations of the management of SESA and are naturally subject to uncertainty and changes in circumstances. Forward-looking statements
include, without limitation, statements typically containing words such as "intends", "expects", "anticipates", "believes", "estimates",
"will", "may" and "should" and words of similar import. By their nature, forward-looking statements involve risk and uncertainty because
they relate to events and depend on circumstances that may occur in the future. Many of these risks and uncertainties relate to factors that
are beyond the ability of SESA to control or estimate precisely and therefore undue reliance should not be placed on such statements.
There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by
such forward-looking statements. These factors include, but are not limited to, the satisfaction of the Conditions to the Offer, as well as
additional factors, such as changes in economic conditions, changes in the level of capital investment, success of business and operating
initiatives and restructuring objectives, customers' strategies and stability, changes in the regulatory environment, fluctuations in
interest and exchange rates, the outcome of litigation, government actions and natural phenomena such as floods, earthquakes and hurricanes.
Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements. SESA
does not undertake any obligation to update publicly or revise forward-looking statements, whether as a result of new information, future
events or otherwise, except to the extent legally required.
Dealing disclosure requirements
Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes, "interested" (directly or indirectly) in 1 per cent. or
more of any class of "relevant securities" of Econergy, all "dealings" in any "relevant securities" of Econergy (including by means of an
option in respect of, or a derivative referenced to, any such "relevant securities") must be publicly disclosed by no later than 3.30 p.m.
(London time) on the Business Day following the date of the relevant transaction. This requirement will continue until the Offer becomes, or
is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or the date on which the "offer period" otherwise ends. If
two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an "interest" in
"relevant securities" of Econergy, they will be deemed to be a single person for the purposes of Rule 8.3 of the City Code.
Under the provisions of Rule 8.1 of the City Code, all "dealings" in "relevant securities" of Econergy by Econergy or SESA, or by any of
their respective "associates", must be disclosed by no later than 12.00 noon (London time) on the Business Day following the date of the
relevant transaction.
A disclosure table, giving details of the companies in whose "relevant securities" "dealings" should be disclosed, and the number of
such securities in issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk.
"Interests in securities" arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in
the price of securities. In particular, a person will be treated as having an "interest" by virtue of the ownership or control of
securities, or by virtue of any option in respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the City Code, which can also be found on the Panel's website. If you are in any doubt as to the
application of Rule 8 of the Code to you, please contact an independent financial adviser authorised under the Financial Services and
Markets Act 2000, consult the Panel's website at www.thetakeoverpanel.org.uk or contact the Panel on telephone number +44 (0) 20 7382 9026;
fax +44 (0) 20 7236 7005.
FOR IMMEDIATE RELEASE
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION
13 June 2008
Cash offer for Econergy International plc by
Suez Energy South America Participaes Ltda.
1. Introduction
SESA is today pleased to announce the terms of an all cash offer to acquire the entire issued and to be issued share capital of Econergy
at a price of 45 pence per Econergy Share. The Offer will be made by SESA or a subsidiary of SESA. The ultimate parent of SESA is Suez S.A.
SESA is also making available to Econergy loan facilities of over US$50 million subject to, among other things, SESA receiving
undertakings to accept the Offer in respect of more than 50 per cent. of the issued share capital of Econergy.
2. The Offer
Under the Offer, which will be subject to the Conditions and further terms set out in Appendix 1 to this Announcement and the full terms
to be set out in the Offer Document and, in the case of Econergy Shares held in certificated form, in the accompanying Form of Acceptance,
Econergy Shareholders will be entitled to receive:
45 pence per Econergy Share in cash
The Offer values the entire issued ordinary share capital of Econergy at approximately �39.2 million and represents a premium of
approximately:
* 50 per cent. to the cash alternative available under the Trading Emissions proposal of 30 pence per Econergy Share;
* 43.1 per cent. to the current implied value of the Trading Emissions proposal of 31.5 pence per Econergy Share, based on the
Closing Price of 135 pence per Trading Emissions Share on 12 June 2008, the last Business Day prior to the date of this Announcement; and
* 91.5 per cent. to the Closing Price of 23.5 pence per Econergy Share on 9 April 2008, being the date prior to the announcement by
Econergy that it had received a number of preliminary approaches.
Econergy Shares will be acquired by SESA fully paid and free from all liens, equitable interests, charges, encumbrances and other third
party rights of any nature whatsoever and together with all rights attaching to them, including the right to receive and retain all
dividends and distributions (if any) declared, made or payable after the date of this Announcement.
3. Background to and reasons for the Offer
On 14 April 2008, the Independent Econergy Directors announced that, having consulted with a number of its major shareholders and after
an assessment of prevailing capital market conditions in the context of its short and medium term funding requirements, Econergy was seeking
a sale or merger. Econergy had previously stated that it required significant working capital, arising in part from bank leverage reductions
on some of its projects and the requirement to restructure the ownership of the Proyecto Eco Guanacaste project, and would also require a
substantial capital injection to develop its publicly stated Phase 2 and other projects as well as to expand generally its operations.
In light of Econergy's current funding position, SESA's existing financial resources and its intention to make available to Econergy
sufficient financing to meet its working capital requirements in the short and medium term (as detailed in paragraph 9 below), the Offer
provides the opportunity for Econergy to continue to develop its business.
The SESA Group has a proven and successful track record in the development and operation of renewable power plants in Latin America and
believes that Econergy's business would benefit from the Group's extensive footprint and expertise in the region.
SESA also considers that the terms of the Offer provide Econergy Shareholders with an attractive opportunity to realise the underlying
value of Econergy in cash, taking into account the remaining execution risks within its portfolio of clean energy projects in Latin America.
SESA hopes that, when free to do so, the Independent Econergy Directors will recommend that Econergy Shareholders accept the Offer.
4. Irrevocable undertakings
SESA has received irrevocable undertakings to accept the Offer in respect of 12,010,927 Econergy Shares, representing approximately
13.81 per cent. of the existing issued share capital of Econergy.
SESA has received these irrevocable undertakings from:
(a) Progressive AIM Realisation Limited in its capacity as fund manager in respect of 2,330,000 Econergy Shares, representing
approximately 2.68 per cent. of the existing issued share capital of Econergy, held beneficially by Advance AIM Value Realisation Company
Limited; and
(b) The Ospraie Portfolio Ltd. in respect of 9,680,927 Econergy Shares, representing approximately 11.13 per cent. of the existing
issued share capital of Econergy, held legally and beneficially by The Ospraie Portfolio Ltd.
These irrevocable undertakings were procured on the basis of the offer price set out in this Announcement.
These irrevocable undertakings will cease to be binding if (i) on or before the tenth day following the posting of the Offer Document
(or the document containing the scheme of arrangement, as the case may be), a competing offer is made for Econergy which is 10 per cent.
higher than the Offer, (ii) the Offer lapses or is withdrawn or (iii) the Offer is not declared unconditional in all respects in accordance
with its terms by 30 March 2009.
5. Information on Econergy
Econergy is a renewable Independent Power Producer (IPP) with a carbon business focused primarily in the Americas. Its principal
business groups are Independent Power Production, Carbon Markets and Consulting. Further, Econergy, along with five international
development banks, developed the US$25 million CleanTech Fund, a private equity fund which is focused on small-scale clean energy projects
in Latin America.
Econergy has stated that, as of April 2008, it had one project in operation totalling 147 MW of gross installed capacity, five projects
in construction totalling 118.9 MW and an additional 60 MW in late-stage development.
For the financial year ended 31 December 2007, the Econergy Group's revenues were US$25.4 million (2006: US$5.0 million) with 78.4 per
cent. of revenues derived from power production. The loss from operations was US$0.4 million (2006: loss of US$9.2 million). The net loss
for the same period was US$5.1 million (2006: US$8.6 million). Total consolidated cash balances as at 31 December 2007 were US$37 million
and consolidated debt was US$47 million.
6. Information on SESA
SESA, which was incorporated in 1999, holds the Suez Group's investments in the Brazilian energy sector. SESA own 68.7 per cent. of the
issued share capital of Tractebel Energia, which is one of the leading private energy generators in Brazil, with an installed capacity of
5,918 MW. The current market capitalisation of Tractebel Energia is approximately US$9 billion. SESA is the leader of a consortium which has
recently won a concession to build, own and operate the Jirau plant, a 3,300 MW greenfield hydro project in the northern region of Brazil.
SESA is part of the Suez Group, which is an international industrial and services group which designs sustainable and innovative
solutions for the management of public utilities and power projects in partnership with public authorities, businesses and individuals. The
Suez Group is active in the electricity, natural gas, energy services, water and waste management sectors. Suez S.A. is listed on the
Brussels, Luxembourg, Paris and Zurich stock exchanges and is a member of the following stock exchange indices: CAC 40, BEL 20, DJ STOXX 50,
DJ EURO STOXX 50, Euronext 100, FTSE Eurotop 100, MSCI Europe and ASPI Eurozone. In 2007, the revenues of the Suez Group were approximately
EUR47.5 billion. Suez S.A. is currently finalising its merger with Gaz de France S.A. to create a world leader in the energy sector.
7. Financing the Offer
The Offer will be financed from the existing cash resources of the SESA Group.
Dresdner Kleinwort, financial adviser to SESA, is satisfied that resources are available to SESA sufficient to satisfy in full the cash
consideration payable to Econergy Shareholders under the terms of the Offer.
8. Econergy Stock Option Plan
The Offer will extend to any Econergy Shares which are unconditionally allotted or issued before the date on which the Offer closes (or
by such earlier date as SESA may, subject to the City Code, decide) as a result of the exercise of options granted under the Econergy Stock
Option Plan.
To the extent that such options are not exercised, and if the Offer becomes or is declared unconditional in all respects, it is intended
that appropriate proposals will be made to holders of options under the Econergy Stock Option Plan in due course.
9. Loan Agreement
In order to seek to ensure that Econergy will have sufficient working capital to meet its project and other commitments as they fall due
over the short and medium term, an affiliate of SESA, Electrabel Finance and Treasury Management (the "Lender"), has entered into a
conditional loan facility with certain members of the Econergy Group dated 13 June 2008 (the "Loan Agreement"). The facility is split into
two tranches; the first tranche will be used to prepay in full a US$20,000,000 loan and the prepayment fee and accrued interest related
thereto, made available to the Econergy Group pursuant to a loan agreement between certain members of the Econergy Group and Trading
Emissions dated 15 May 2008 (the "TEP Facility"); the second tranche, which is up to US$34,100,000, will be used (i) to provide funds to
members of the Econergy Group in respect of certain projects; (ii) in replacement of the anticipated proceeds of sale of a shareholding in a
project that may not materialise; and (iii) for Econergy's professional advisers' fees. Both tranches will be subject to certain restrictions on drawing.
The availability of the facility is subject to, inter alia, the following conditions:
(a) Econergy entering into a loan implementation agreement in a form satisfactory to the Lender;
(b) Econergy Shareholders representing more than 50 per cent. of Econergy's issued share capital entering
into irrevocable undertakings to accept the Offer in a form satisfactory to the Lender;
(c) the scheme of arrangement proposed to be made under section 152 of the Companies Act between
Econergy and the Econergy Shareholders to effect the acquisition of Econergy by Trading Emissions
having been withdrawn or having become incapable of being implemented;
(d) Econergy Shareholders representing more than 50 per cent. of Econergy's issued share capital providing
written approval to the Panel for Econergy to enter into the Loan Agreement with the Lender, as required
by Rule 21.1 of the City Code; and
(e) in the case of draw down of the second tranche of the facility only, no third party having announced a firm
intention to make an offer (within the meaning of Rule 2.5 of the City Code) for Econergy on or prior to
11.59 p.m. on the tenth day following the date of which the Offer Document (or scheme document, as the
case may be) is posted.
The conditions of the Loan Agreement are waivable by the Lender in its absolute discretion.
Subject to the following, the loan is for a term of 18 months and is at an initial interest rate of LIBOR plus 4 per cent. per annum.
After a period of 120 days from the date of the Loan Agreement, if the Offer has lapsed or has been withdrawn or if the Offer is or was
being effected by way of a scheme of arrangement (the "Scheme") and the Scheme has or becomes incapable of being implemented in accordance
with its terms (a "Trigger Date"), the interest shall continue to accrue at that rate for a period of 30 days from the Trigger Date (the
"First Trigger Period"). Following the expiry of the First Trigger Period, the interest shall accrue at the rate of LIBOR plus 10 per cent.
per annum for a period of 90 days following the First Trigger Period. Thereafter, interest shall continue to accrue at the rate of LIBOR
plus 10 per cent. per annum but the Lender shall have the right to be repaid any outstanding principal sum together with any accrued
interest on demand without reference to a prepayment fee.
If the borrower chooses to prepay the loan, a prepayment fee (the "Prepayment Fee") of an amount equal to 1.4 per cent of the total
principal amount of the relevant facility being prepaid shall be paid to the Lender, provided that the fee shall be no more than 1 per cent.
of the Offer value.
The Loan Agreement contains a mandatory prepayment on:
(a) a change of control of Econergy other than in connection with the Offer;
(b) the sale of all or substantially all of the assets of the Econergy Group, other than in connection with the Offer;
(c) Econergy knowingly taking any action or omitting to take any action which is entirely within its control and which precludes or
materially restricts the consummation of the Offer; or
(d) a working capital facility (other than the TEP Facility) being provided by a third party not acting in concert with SESA, in
connection with a firm intention to make an offer for the ordinary share capital of Econergy,
when the Prepayment Fee will be payable.
The loan will be secured by pledges over shares in certain companies which are direct or indirect subsidiaries of Econergy.
Without creating any legally binding commitment, and subject to receipt of the irrevocable undertakings referred to in this paragraph
above, SESA intends to support, on terms reasonably acceptable to it, any reasonable request from Econergy for additional funding to meet
its working capital requirements in the period before the Offer becomes, or is declared, wholly unconditional.
10. Conditions to the Offer and Structure of the Acquisition
The Offer will be made subject to the terms and conditions set out in Appendix 1 to this Announcement and to be set out in the Offer
Document and, in the case of Econergy Shares held in certificated form, in the accompanying Form of Acceptance.
SESA believes that the proposed facilities to be made available to Econergy (as detailed in paragraph 9 above) will be sufficient to
meet Econergy's short and medium term funding requirements.
SESA draws attention to the Conditions set out in Appendix 1 to this Announcement and, in particular, Conditions (e)(i) to (iii), which
relate to the position in the event that insolvency proceedings are commenced in relation to certain members of the Econergy Group and
Conditions (b) to (d) relating to the approvals required for the Acquisition from certain Brazilian public authorities and entities.
The consents of certain Brazilian public authorities and entities (being the Brazilian Electricity Regulatory Agency, Agncia Nacional de
Energia Eltrica; Centrais Eltricas do Brasil, S.A; and the Brazilian Development Bank, Banco Nacional de Desenvolvimento Econmico e Social)
will be required prior to the Offer being completed and, accordingly, the Offer will be conditional, inter alia, upon these consents being
obtained. SESA has been advised that one of these consents may take up to 180 days to secure from the date of the consent being requested.
Accordingly, it is anticipated that the timetable for implementing the Offer may be extended beyond that which is customary for similar
contractual offers. Further details on the need to obtain Brazilian consents and the implications for the proposed timetable will be set out
in the Offer Document. It is the intention of SESA to endeavour to expedite the securing of these consents and in this regard application to
the relevant parties will be made as soon as practicable following the publication of this Announcement.
The Acquisition is proposed to be implemented by way of a contractual offer. However, SESA reserves the right to implement the Offer by
way of a scheme of arrangement of Econergy pursuant to section 152 of the Companies Act. In such event, the scheme of arrangement will be
implemented on the same terms, so far as applicable, as those which would apply to the Offer (subject to appropriate amendments). In
particular, Condition (a) of the Conditions would not apply and the scheme of arrangement would become effective and binding following:
(a) approval of the scheme of arrangement at a meeting convened by the Court by a majority in number,
representing 75 per cent. or more in value, present and voting, either in person or by proxy,
of Econergy Shareholders (or the relevant class or classes thereof);
(b) the resolution(s) required to approve and implement the scheme of arrangement being passed by the
requisite majority of Econergy Shareholders at an extraordinary general meeting of Econergy validly
convened for such purpose; and
(c) the sanction of the scheme of arrangement by the Court (with or without modifications, on terms
reasonably acceptable to SESA) and office copies of the orders of the Court sanctioning the scheme of
arrangement being delivered for registration to the Financial Supervision Commission.
11. Disclosure of interests in Econergy Shares
As at the close of business on 12 June 2008, the last Business Day prior to the date of this Announcement, neither SESA nor any of the
officers of SESA, nor, so far as SESA is aware, any person acting in concert (within the meaning of the City Code) with SESA, had an
interest in or right to subscribe for Econergy Shares or securities convertible or exchangeable into Econergy Shares ("Econergy
Securities"), nor does any such person have any short position in relation to Econergy Securities (whether conditional or absolute and
whether in the money or otherwise), including any short position under a derivative, any agreement to sell or any delivery obligation or
right to require another person to purchase or take delivery of any Econergy Securities.
Save for the irrevocable undertakings described above, neither SESA nor any person acting in concert with SESA has any arrangement in
relation to Econergy Securities or options (including traded options) in respect of, or derivatives referenced to, Econergy Securities. For
these purposes, "arrangement" includes any indemnity or option arrangement or any agreement or understanding, formal or informal, of
whatever nature, relating to Econergy Securities which is, or may be, an inducement to deal or refrain from dealing in such securities.
Neither SESA nor any of the officers of SESA, nor, so far as SESA is aware, any person acting in concert with SESA, has borrowed or lent
any Econergy Securities.
In the interests of secrecy prior to this Announcement, SESA has not made any enquiries in this respect of the matters referred to in
this paragraph of certain parties who may be deemed by the Panel to be acting in concert with it for the purposes of the Offer. Enquiries of
such parties will be made as soon as practicable following the date of this Announcement and any material disclosure in respect of such
parties will be included in the Offer Document.
12. Management and employees
In the event of the Offer becoming, or being declared, unconditional in all respects, the existing contractual and statutory employment
rights, including pension rights, of all the employees of the Econergy Group will be fully safeguarded.
13. Compulsory acquisition and cancellation of admission to trading
If SESA receives acceptances under the Offer in respect of, and/or otherwise acquires, 90 per cent. or more in value of the shares
affected, and if all other conditions of the Offer have been satisfied or waived (to the extent that they are capable of being waived), SESA
intends to exercise its rights pursuant to the provisions of section 154 of the Companies Act to acquire compulsorily any remaining Econergy
Shares in respect of which acceptances have not then been received, on the same terms as the Offer.
If the Offer becomes, or is declared, unconditional in all respects, and sufficient acceptances under the Offer are received and subject
to any applicable requirements of the London Stock Exchange, SESA intends to procure that Econergy makes an application to cancel the
admission to trading of Econergy Shares on AIM. Notice of such cancellation will commence not less than 20 Business Days prior thereto
either on SESA attaining 75 per cent. or more of the voting rights as described above or on the first date of issue of the notices under
section 154 of the Companies Act compulsorily acquiring Econergy Shares. SESA will notify Econergy Shareholders when the required threshold
has been attained and confirm that the notice period has commenced and the anticipated date of cancellation. Cancellation of admission to
trading would significantly reduce the liquidity and marketability of any Econergy Shares not assented to the Offer at that time and the
value of any such Econergy Shares may be affected as a consequence.
It is also intended that, following the Offer becoming, or being declared, unconditional in all respects and after the cancellation of
admission to trading referred to above becoming effective, Econergy will be re-registered either as a private company under the relevant
provisions of the Companies Act or as a New Manx Vehicle under the relevant provisions of the Isle of Man Companies Act 2006.
14. General
The Offer Document will be sent to Econergy Shareholders as soon as reasonably practicable, other than to Overseas Shareholders in the
circumstances permitted under the City Code or in accordance with any dispensation given by the Panel. The full terms of and conditions to
the Offer will be set out in the Offer Document and, in the case of the Econergy Shares held in certificated form, in the accompanying Form
of Acceptance.
Dresdner Kleinwort (Financial adviser and broker to Tel: +44 20 7623 8000
SESA)
Rosalind Hedley-Miller
Ben Bailey
Brunswick Group (Financial PR adviser to SESA) Tel: +44 (0)207 404 5959
Andrew Garfield
The Offer will be subject to the Conditions and further terms set out in Appendix 1 to this Announcement and to the full terms and
conditions to be set out in the Offer Document and, in the case of the Econergy Shares held in certificated form, in the accompanying Form
of Acceptance. Appendix 2 to this Announcement contains source notes relating to certain information contained in this Announcement. Certain
terms used in this Announcement are defined in Appendix 3 to this Announcement.
This Announcement is not intended to and does not constitute or form part of an offer to sell or subscribe for or an invitation to
purchase or 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 sale, issue or transfer of securities referred to in this Announcement in any jurisdiction where to do so would be in
contravention of any applicable law. Any response in relation to the Offer should be made only on the basis of the information in the Offer
Document (which will contain the full terms and conditions of the Offer including how it may be accepted) and, in the case of the Econergy
Shares held in certificated form, in the accompanying Form of Acceptance or any document by which the Offer is made. SESA urges Econergy
Shareholders to read the Offer Document and, in the case of those Econergy Shareholders who hold their Econergy Shares in certificated form,
the accompanying Form of Acceptance when they become available because they will contain important information relating to the Offer.
Dresdner Kleinwort Limited, which is authorised and regulated by the Financial Services Authority, is acting for SESA and for no one
else in connection with the Offer and will not be responsible to anyone other than SESA for providing the protections afforded to clients of
Dresdner Kleinwort Limited or for affording advice in relation to the Offer or any other matters referred to in this Announcement.
Econergy Shareholders in overseas jurisdictions
The availability of the Offer to Econergy Shareholders who are not resident in and citizens of the Isle of Man or the United Kingdom may
be affected by the laws of the relevant jurisdictions in which they are located or of which they are citizens. Such persons should inform
themselves of, and observe, any applicable legal or regulatory requirements of their jurisdictions. Further details in relation to Overseas
Shareholders will be contained in the Offer Document.
The distribution of this Announcement in jurisdictions other than the Isle of Man or the United Kingdom may be restricted by law and
therefore any persons who are subject to the laws of any jurisdiction other than the Isle of Man or the United Kingdom should inform
themselves about, and observe, any applicable requirements. This Announcement has been prepared for the purposes of complying with English
law and the City Code and the information disclosed may not be the same as that which would have been disclosed if this Announcement had
been prepared in accordance with the laws of any jurisdiction outside the Isle of Man or the United Kingdom.
The Offer is not to be made, directly or indirectly, in, into or from any jurisdiction where to do so would violate the laws in that
jurisdiction. Accordingly, copies of this Announcement and formal documentation relating to the Offer will not be, and must not be, mailed
or otherwise forwarded, distributed or sent in, into or from any jurisdiction where to do so would violate the laws and/or regulations in
that jurisdiction unless otherwise determined by SESA and subject to any dispensation required by the Panel.
Notice to US investors
The Offer relates to the shares in an Isle of Man company and is subject to disclosure requirements, which are different from those of
the United States.
The settlement procedure with respect to the Offer will be consistent with UK practice, which differs from US domestic tender offer
procedures in certain material respects, particularly with regard to date of payment.
Neither the SEC nor any securities commission of any state of the United States has (a) approved or disapproved of the Offer; (b) passed
upon the merits or fairness of the Offer; or (c) passed upon the adequacy or accuracy of the disclosure in this Announcement. Any
representation to the contrary is a criminal offence in the United States.
Cautionary note regarding forward-looking statements
This Announcement, including information included or incorporated by reference in this Announcement, oral statements made regarding the
Offer, and other information published by SESA may contain *forward-looking statements*. These statements are based on the current
expectations of the management of SESA and are naturally subject to uncertainty and changes in circumstances. Forward-looking statements
include, without limitation, statements typically containing words such as *intends*, *expects*, *anticipates*, *believes*, *estimates*,
*will*, *may* and *should* and words of similar import. By their nature, forward-looking statements involve risk and uncertainty because
they relate to events and depend on circumstances that may occur in the future. Many of these risks and uncertainties relate to factors that
are beyond the ability of SESA to control or estimate precisely and therefore undue reliance should not be placed on such statements.
There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by
such forward-looking statements. These factors include, but are not limited to, the satisfaction of the Conditions to the Offer, as well as
additional factors, such as changes in economic conditions, changes in the level of capital investment, success of business and operating
initiatives and restructuring objectives, customers' strategies and stability, changes in the regulatory environment, fluctuations in
interest and exchange rates, the outcome of litigation, government actions and natural phenomena such as floods, earthquakes and hurricanes.
Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements. SESA
does not undertake any obligation to update publicly or revise forward-looking statements, whether as a result of new information, future
events or otherwise, except to the extent legally required.
Dealing disclosure requirements
Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes, "interested" (directly or indirectly) in 1 per cent. or
more of any class of "relevant securities" of Econergy, all "dealings" in any "relevant securities" of Econergy (including by means of an
option in respect of, or a derivative referenced to, any such "relevant securities") must be publicly disclosed by no later than 3.30 p.m.
(London time) on the Business Day following the date of the relevant transaction. This requirement will continue until the Offer becomes, or
is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or the date on which the "offer period" otherwise ends. If
two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an "interest" in
"relevant securities" of Econergy, they will be deemed to be a single person for the purposes of Rule 8.3 of the City Code.
Under the provisions of Rule 8.1 of the City Code, all "dealings" in "relevant securities" of Econergy by Econergy or SESA, or by any of
their respective "associates", must be disclosed by no later than 12.00 noon (London time) on the Business Day following the date of the
relevant transaction.
A disclosure table, giving details of the companies in whose "relevant securities" "dealings" should be disclosed, and the number of
such securities in issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk.
"Interests in securities" arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in
the price of securities. In particular, a person will be treated as having an "interest" by virtue of the ownership or control of
securities, or by virtue of any option in respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the City Code, which can also be found on the Panel's website. If you are in any doubt as to the
application of Rule 8 of the Code to you, please contact an independent financial adviser authorised under the Financial Services and
Markets Act 2000, consult the Panel's website at www.thetakeoverpanel.org.uk or contact the Panel on telephone number +44 (0) 20 7382 9026;
fax +44 (0) 20 7236 7005.
APPENDIX 1
CONDITIONS TO AND CERTAIN FURTHER TERMS OF THE OFFER
The Offer is subject to the following conditions:
(a) valid acceptances of the Offer being received (and not, where permitted, withdrawn) by no later than 3.00 p.m. on the First
Closing Date (or such later time(s) and/or date(s) as SESA may, subject to the rules of the City Code, decide) in respect of not less than
90 per cent. of the shares affected (or such lesser percentage as SESA may decide, provided that this condition shall not be satisfied
unless SESA and/or any other member of the SESA Group shall have acquired or agreed to acquire, pursuant to the Offer or otherwise, Econergy
Shares carrying in aggregate more than 50 per cent. of the voting rights then normally exercisable at a general meeting of Econergy
including for this purpose (to the extent, if any, required by the Panel) any such voting rights attached to any Econergy Shares
unconditionally allotted or issued before the Offer becomes or is declared unconditional as to acceptances, whether pursuant to the exercise
of conversion or subscription rights or otherwise) and for the purposes of this condition:
(i) the expression "shares affected" shall be construed in accordance with section 154 of the
Companies Act;
(ii) Econergy Shares which have been unconditionally allotted but not issued shall be deemed to
carry the voting rights which they will carry upon issue; and
(iii) valid acceptances shall be deemed to have been received in respect of Econergy Shares
which have been acquired or contracted to be acquired by or on behalf of SESA;
(b) the Brazilian Electricity Regulatory Agency (Agcia Nacional de Energia Elrica) giving notice in writing, in terms reasonably
satisfactory to SESA, of its approval in respect of the change of control of the Econergy affiliate holding the authorisation for the Pedra
do Sal Wind Farm which would result from the implementation of the Offer;
(c) the company Centrais Elricas do Brasil, S.A. giving notice in writing, in terms reasonably satisfactory to SESA, of its approval
in respect of the change of control of the Econergy affiliates holding the authorisations for the Beberibe Wind Farm, the Pedra do Sal Wind
Farm and the Areia Branca Hydroelectric Plant which would result from the implementation of the Offer;
(d) the Brazilian Development Bank (Banco Nacional de Desenvolvimento Econco e Social) giving notice in writing, in terms reasonably
satisfactory to SESA, of its approval in respect of the change of control of the Econergy affiliates holding the authorisations for the
Beberibe Wind Farm and the Areia Branca Hydroelectric Plant which would result from the implementation of the Offer;
(e) save as publicly announced by Econergy in Econergy's annual report and accounts for the year ended 31 December 2007 or through an
RIS prior to the date of this Announcement ("Publicly Announced") or expressly and fairly disclosed in writing by or on behalf of Econergy
to SESA prior to the date of this Announcement in connection with the Offer ("Disclosed"):
(i) no member of the Key Project Group having taken or proposed any corporate action for its bankruptcy, rehabilitation,
custodianship, winding-up, dissolution or authorisation or for the appointment of a receiver, administrator, administrative receiver or
similar officer (save in the context of a solvent reconstruction of any member of the Key Project Group) or had any such person appointed or
been unable or admitted in writing that it is unable to pay its debts or having stopped or suspended (or threatened to stop or suspend)
payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of any of its business or proposed or
entered into any composition or voluntary arrangement with its creditors (or any class of them) or the filing at court of documentation in
order to obtain a moratorium prior to a voluntary arrangement or analogous procedure or, by reason of actual or anticipated financial
difficulties, commenced negotiations with one or more of its creditors with a view to rescheduling or readjusting any of its indebtedness or the making of any composition, assignment or arrangement for the
benefit of any class of creditors;
(ii) no member of the Key Project Group having had any proceedings commenced against it for its bankruptcy, rehabilitation,
custodianship, winding-up (voluntary or otherwise), dissolution, striking-off or reorganisation or for the appointment of a receiver,
administrator (including the filing of any administration application, notice of intention to appoint an administrator or notice of
appointment of an administrator), administrative receiver, trustee or similar officer (whether provisional, interim or permanent) of all or
any part of its assets or revenues or for any analogous proceedings or steps in any jurisdiction or for the appointment of any analogous
person in any jurisdiction, other than where any proceedings have been presented:
(a) by a creditor, which are being contested in good faith and with diligence and are discharged within 14 days; or
(b) in the context of a solvent reconstruction of any member of the Key Project Group; and
(iii) no member of the Key Project Group having taken or entered into in a jurisdiction outside the Isle of Man any form of
insolvency proceeding (including, without limitation, under Title 11, United States Bankruptcy Code of 1978, as amended) or event similar or
analogous to any of the events referred to in conditions (e)(i) and (ii) above,
PROVIDED THAT no such event has occurred as a direct result of a failure by the SESA Group to provide facilities in accordance with the
Loan Agreement, where obliged to do so. For the purposes of this paragraph (e) "Key Project Group" means Econergy Generation Limited,
Enerwinds De Costa Rica S.A., Econergy Holdings Limited, Econergy International plc, Eco Energy Beberibe Ltda, Econergy Ireland Limited,
Hidrelectrica Ariea Branca S.A., Pedra do Sal, Proyecto Eolico Guanacaste, Econergy International Corporation, Econergy Cayman Holding
Company LDC, Econergy Bolivia Investments I Ltd, Econergy Bolivia Investments II Ltd, Inversiones Econergy Bolivia S.A., Empresa Electrica
Corani S.A., Cambria 33 Resources LLC, Clean Tech General Partner LLC, Clean Tech Advisors, LLC and Clean Tech Investor LLC;
(f) no central bank, government or governmental, quasi-governmental, supranational, statutory, regulatory or investigative body,
court, central bank, trade agency, association, authority (including any national or international anti-trust or merger control authority),
institution or professional or environmental body or any other similar person or body whatsoever in any relevant jurisdiction (each a "Third
Party") having decided to take, institute, implement or threaten any action, suit, proceedings, investigation, enquiry or reference, or
having enacted, made or proposed any statute, regulation, order or decision, or having required any action to be taken or information to be
provided or having taken any other step or otherwise done anything which would or might reasonably be expected to:
(i) make the Offer or its implementation, or the acquisition or the proposed acquisition by SESA of any shares or other securities
in, or control of, Econergy or any member of the Wider Econergy Group void, illegal or unenforceable in any jurisdiction, or otherwise
directly or indirectly restrain, prohibit, restrict, prevent or delay the same or impose additional conditions or financial or other
obligations with respect thereto, or otherwise challenge or interfere therewith;
(ii) require, prevent or delay the divestiture or alter the terms envisaged for any proposed divestiture by any member of the Wider
SESA Group of any Econergy Shares or of any shares in a member of the Wider SESA Group;
(iii) require, prevent or delay the divestiture or alter the terms envisaged for any proposed divestiture by any member of the Wider
SESA Group or by any member of the Wider Econergy Group of all or any portion of their respective businesses, assets or property, or impose
any limit on the ability of any of them to conduct their respective businesses (or any of them) or to own or control any of their respective
assets or properties or any part thereof;
(iv) impose any limitation on, or result in any delay in, the ability of any member of the Wider SESA Group or any member of the
Wider Econergy Group to acquire, hold or exercise effectively, directly or indirectly, all or any rights of ownership of Econergy Shares or
any shares or securities convertible into Econergy Shares or to exercise voting or management control over any member of the Wider Econergy
Group or any member of the Wider SESA Group;
(v) except pursuant to the Offer, require any member of the Wider SESA Group and/or of the Wider Econergy Group to acquire or offer
to acquire or repay any shares or other securities in and/or indebtedness of any member of the Wider Econergy Group owned by or owed to any
third party;
(vi) impose any limitation on the ability of any member of the Wider SESA Group and/or of the Wider Econergy Group to integrate or
co-ordinate its business, or any material part of it, with the business of any member of the Wider Econergy Group or of the Wider SESA Group
respectively;
(vii) result in any member of the Wider SESA Group or any member of the Wider Econergy Group ceasing to be able to carry on business
under any name which it presently does so, in each such case in a manner which is material in the context of the Wider SESA Group or the
Wider Econergy Group, respectively, taken as a whole; or
(viii) otherwise adversely affect any or all of the businesses, assets, profits or financial or trading position of any member of the
Wider Econergy Group or any member of the Wider SESA Group, in each such case to an extent which is material in the context of the Wider
SESA Group or the Wider Econergy Group, respectively, taken as a whole,
and all applicable waiting and other time periods during which any Third Party could institute, implement or threaten any such action,
proceedings, suit, investigation, enquiry or reference under the laws of any relevant jurisdiction, having expired, lapsed or been
terminated;
(g) all necessary filings and applications having been made and all necessary waiting and other time periods (including any
extensions thereof) under any applicable legislation or regulations of any relevant jurisdiction having expired, lapsed or been terminated
and all statutory or regulatory obligations in any relevant jurisdiction having been complied with in each case as may be necessary in
connection with the Offer and its implementation or the acquisition or proposed acquisition by SESA or any member of the Wider SESA Group of
any shares or other securities in, or control of, Econergy or any member of the Wider Econergy Group and all authorisations, orders,
recognitions, grants, consents, clearances, confirmations, licences, certificates, permissions and approvals ("Authorisations") for or in
respect of the Offer or the acquisition or proposed acquisition by SESA of any shares or other securities in, or control of, Econergy or the
carrying on by any member of the Wider Econergy Group of its business or in relation to the affairs of any member of the Wider Econergy Group having been obtained in terms and in a form satisfactory to
SESA from all appropriate Third Parties or persons with whom any member of the Wider Econergy Group has entered into contractual
arrangements and all such Authorisations remaining in full force and effect and all filings necessary for such purpose having been made and
there being no notice or intimation of any intention to revoke, suspend, restrict or amend or not renew the same at the time at which the
Offer becomes or is declared wholly unconditional and there being no indication that the renewal costs of any Authorisation are reasonably
likely to be materially higher than the renewal costs for the current Authorisation;
(h) save as Publicly Announced or Disclosed:
(i) no member of the Wider Econergy Group having made any alteration to its memorandum or articles of association;
(ii) no member of the Wider Econergy Group having (save as between Econergy and wholly-owned subsidiaries of Econergy or between
wholly-owned subsidiaries of Econergy ("'intra-Econergy Group transactions") or upon any exercise of options granted before the date of this
announcement under the Econergy Stock Option Plan) issued or effected or authorised or proposed or announced its intention to issue, effect,
authorise or propose, the issue or grant of, additional shares of any class or securities convertible into or exchangeable for or rights,
warrants or options to subscribe for or acquire any such shares or securities or redeemed, repaid, purchased or reduced or proposed the
redemption, purchase, repayment or reduction, or otherwise changed, any part of its share capital or any other securities;
(iii) no member of the Wider Econergy Group having recommended, declared, paid or made or proposed to recommend, declare, make or pay
any dividend, bonus or other distribution (whether payable in cash or otherwise) other than any distribution by any wholly-owned subsidiary
within the Wider Econergy Group;
(iv) no member of the Wider Econergy Group having issued, authorised, proposed or announced its intention to propose the issue of, or
make any change in or to, any debentures or other loan capital or, save in the ordinary course of business, incurred or increased any
indebtedness or liability (actual or contingent);
(v) other than in the ordinary course of business, no member of the Wider Econergy Group having acquired or disposed of or
transferred or mortgaged, charged or encumbered or created any other security interest over the whole or any part of the business, property
or assets of any such member or shares or any right, title or interest in any assets or shares or authorised the same or entered into,
varied or terminated or authorised, proposed or announced its intention to enter into, vary, terminate or authorise any agreement,
arrangement, contract, transaction or commitment (whether in respect of capital expenditure or otherwise) which is of a loss-making,
long-term or onerous nature or magnitude, or which involves or might reasonably be expected to involve an obligation of such a nature or
magnitude;
(vi) save for intra-Econergy Group transactions, no member of the Wider Econergy Group having effected, implemented, authorised,
proposed or announced its intention to propose any merger, demerger, reconstruction, arrangement, amalgamation, commitment or scheme or any
acquisition or disposal or transfer of assets or shares (other than in the ordinary course of business) or any right, title or interest in
any assets or shares or other transaction or arrangement in respect of itself or another member of the Wider Econergy Group;
(vii) no member of the Wider Econergy Group having entered into any agreement, contract, transaction, arrangement or commitment
(other than in the ordinary course of business);
(viii) save for intra-Econergy Group transactions, no member of the Wider Econergy Group having granted any lease or third party
rights in respect of any of the leasehold or freehold property owned or occupied by any member of the Wider Econergy Group or transferred or
otherwise disposed of any such property;
(ix) no member of the Wider Econergy Group having entered into any contract, transaction or arrangement which would be restrictive on
the business of any member of the Wider Econergy Group or the Wider SESA Group or which is or could involve obligations which would be so
restrictive, in each such case to an extent which is material in the context of the Wider SESA Group or Wider Econergy Group, respectively,
taken as a whole;
(x) no steps having been taken which are likely to result in the withdrawal, cancellation, termination or material modification of
any licence or permit held by any member of the Wider Econergy Group which is necessary for the proper carrying on of the business of the
Wider Econergy Group taken as a whole;
(xi) the rights, liabilities, obligations or interests of any member of the Wider Econergy Group in, or the business of any such
member with, any person, firm or body (or any arrangement or arrangements relating to any such interest or business) being terminated,
adversely modified or affected;
(xii) no litigation or arbitration proceedings, prosecution or other legal proceedings having been instituted or threatened or
announced or remaining outstanding by, against or in respect of any member of the Wider Econergy Group (whether as plaintiff or defendant or
otherwise) and no enquiry or investigations by or complaint or reference to any Third Party against or in respect of any member of the Wider
Econergy Group having been threatened in writing, announced or instituted or remaining outstanding against or in respect of any member of
the Wider Econergy Group, which in each such case is material in the context of the Wider Econergy Group taken as a whole;
(xiii) no member of the Wider Econergy Group having waived or compromised any claim or authorised any such waiver or compromise, save
in the ordinary course of business;
(xiv) there having been no adverse change or deterioration in the business, assets, financial or trading position or profits or
prospects or value of any member of the Wider Econergy Group, which in each such case is material in the context of the Wider Econergy Group
taken as a whole;
(xv) no contingent or other liability having arisen or become apparent or increased which liability or increase might reasonably be
expected in either case to have a material adverse effect on the Wider Econergy Group taken as a whole;
(xvi) no member of the Wider Econergy Group having entered into or varied or made any offer (which remains open for acceptance) to
enter into or vary or announced its intention to enter into or vary to any material extent the terms of any contract, agreement or
arrangement with any of the Independent Econergy Directors or senior executives of any member of the Wider Econergy Group or proposed,
agreed to provide or modified the terms of any share incentive or option scheme or other benefit relating to the employment or termination
of employment of any of the Independent Econergy Directors or senior executives of any member of the Wider Econergy Group or permitted a
variation in the terms or rules governing the Econergy Stock Option Plan;
(xvii) no member of the Wider Econergy Group having made or agreed or consented to any significant change to the terms of the trust
deeds constituting the pension schemes established for its directors and/or employees and/or their dependants or to the benefits which
accrue, or to the pensions which are payable, thereunder, or to the basis on which qualification for or accrual or entitlement to such
benefits or pensions are calculated or determined or to the basis upon which the liabilities (including pensions) of such pension schemes
are funded or made, or agreed or consented to any change to the trustees involving the appointment of a trust corporation;
(xviii) no member of the Wider Econergy Group having made, or announced any proposal to make, any change or addition to any
retirement, death or disability benefit or any other employment-related benefit of or in respect of any of its directors, employees, former
directors or former employees; and
(xix) no member of the Wider Econergy Group having agreed to enter into or entered into an agreement or arrangement or commitment or
passed any resolution or announced any intention with respect to any of the transactions, matters or events referred to in this condition
(h);
(i) save as Publicly Announced or Disclosed, there being no provision of any arrangement, agreement, lease, licence, permit or other
instrument to which any member of the Wider Econergy Group is a party or by or to which any such member or any of its respective assets is
or may be bound, entitled or subject or any circumstance which, in consequence of the making or implementation of the Offer or the proposed
acquisition of any shares or other securities in, or control of, Econergy or any member of the Wider Econergy Group by SESA or any member of
the Wider SESA Group or because of a change in the control or management of Econergy or otherwise, would or might reasonably be expected to
result in:
(i) any monies borrowed by or other indebtedness or liabilities actual or contingent of, or any grant available to, any member of the
Wider Econergy Group being or becoming repayable or capable of being declared repayable immediately or prior to its stated maturity or the
ability of any such member to borrow monies or incur any indebtedness being withdrawn or inhibited or capable of being withdrawn or
inhibited;
(ii) the creation or enforcement of any mortgage, charge or other security interest over the whole or any part of the business,
property, assets or interests of any member of the Wider Econergy Group or any such security (whenever created, arising or having arisen)
being enforced or becoming enforceable;
(iii) any such arrangement, agreement, licence or instrument or the rights, liabilities, obligations, or interests of any member of
the Wider Econergy Group under any such arrangement, agreement, licence or instrument (or any arrangement, agreement, licence or instrument
relating to any such right, liability, obligation, interest or business) or the interests or business of any such member in or with any
other person, firm, company or body being or becoming capable of being terminated or adversely modified or adversely affected or any adverse
action being taken or any obligation or liability arising thereunder, in each case to an extent which is material in the context of the
Wider Econergy Group taken as a whole;
(iv) any asset or interest of any member of the Wider Econergy Group being or falling to be disposed of or charged (otherwise than in
the ordinary course of business) or ceasing to be available to any member of the Wider Econergy Group or any right arising under which any
such asset or interest could be required to be disposed of or charged or could cease to be available to any member of the Wider Econergy
Group, in each case to an extent which is material and adverse in the context of the Wider Econergy Group taken as a whole;
(v) any member of the Wider SESA Group and/or of the Wider Econergy Group being required to acquire or repay any shares in and/or
indebtedness of any member of the Wider Econergy Group owned by any third party;
(vi) any change in or effect on the ownership or use of any intellectual property rights owned or used by any member of the Wider
Econergy Group, in each case to an extent which is material and adverse in the context of the Wider Econergy Group taken as a whole; or
(vii) the creation of any liability, actual or contingent, by any such member, in each case to an extent which is material and
adverse in the context of the Wider Econergy Group taken as a whole,
and no event having occurred which, under any provision of any such arrangement, agreement, licence or other instrument, might
reasonably be expected to result in any of the events referred to in this condition (i);
(j) save as Disclosed, SESA not having discovered:
(i) that any financial, business or other information concerning Econergy or the Wider Econergy Group which is contained in
information disclosed at any time by or on behalf of any member of the Wider Econergy Group either publicly or in the context of the Offer
contains a misrepresentation of fact which has not, prior to the date of this Announcement, been corrected by public announcement through an
RIS or omits to state a fact necessary to make the information contained therein not misleading where such misrepresentation or omission is
material in the context of the Wider Econergy Group taken as a whole;
(ii) any information which materially and adversely affects the import of any information disclosed to SESA or to any member of the
Wider SESA Group at any time by or on behalf of Econergy or any member of the Wider Econergy Group which is material in the context of the
Wider Econergy Group taken as a whole;
(iii) that any member of the Wider Econergy Group is subject to any liability, contingent or otherwise, which is not Publicly
Announced and which is material in the context of that member of the Wider Econergy Group; or
(iv) that any member of the Wider Econergy Group has not complied with any applicable law or regulation governing the conduct of its
business in any respect which would or might be likely to affect adversely the Wider Econergy Group taken as a whole; and
(k) save as Publicly Announced or Disclosed, SESA not having discovered that:
(i) any past or present member of the Wider Econergy Group has not complied with any applicable legislation or regulations of any
jurisdiction with regard to the use, treatment, handling, storage, transport, release, disposal, discharge, spillage, leak or emission of
any waste or hazardous substance or any substance likely to impair the environment or harm human health, or otherwise relating to
environmental matters or the health and safety of any person, or that there has otherwise been any such use, treatment, handling, storage,
transport, release, disposal, discharge, spillage, leak or emission (whether or not this constituted non-compliance by any person with any
legislation or regulations and wherever the same may have taken place) which, in any case, would be likely to give rise to any liability
(whether actual or contingent) or cost on the part of any member of the Wider Econergy Group which in any case is material in the context of
the Wider Econergy Group taken as a whole; or
(ii) there is, or is likely to be, any liability, whether actual or contingent, to make good, alter, improve, repair, reinstate,
clean up or otherwise assume responsibility for any property now or previously owned, occupied, made use of or in respect of which a
guarantee or other similar obligation has been assumed by any past or present member of the Wider Econergy Group or any other property or
any controlled waters under any environmental legislation, regulation, notice, circular, order or other lawful requirement of any relevant
authority or Third Party or otherwise which in any case is material in the context of the Wider Econergy Group taken as a whole.
Subject to the requirements of the Panel, SESA reserves the right to waive, in whole or in part, all or any of the above Conditions,
except the Condition set out in paragraph (a) above. Conditions (b) to (k) (inclusive) must be fulfilled or (where capable of waiver) waived
on or before midnight (London time) on the twenty first day after the later of the First Closing Date and the date on which Condition (a) is
fulfilled (or in each such case such later date as SESA may, with the consent of the Panel, decide).
SESA shall be under no obligation to waive (if capable of waiver) or treat as fulfilled any of Conditions (b) to (k) inclusive by a date
earlier than the latest date specified above for the fulfilment thereof, notwithstanding that the other Conditions of the Offer may at such
earlier date have been fulfilled and that there are, at such earlier date, no circumstances indicating that any of such Conditions may be
incapable of fulfilment.
If SESA is required by the Panel to make an offer for Econergy Shares under the provisions of Rule 9 of the City Code, SESA may make
such alterations to any of the above Conditions as are necessary to comply with the provisions of that Rule.
Certain further terms
SESA reserves the right, with the consent of the Independent Econergy Directors, to elect to implement the Offer by way of a scheme of
arrangement under section 152 of the Companies Act. In such event, the scheme of arrangement will be implemented on the same terms (subject
to appropriate amendments), so far as applicable, as those which apply to the Offer. In particular, Condition (a) would not apply and the
scheme of arrangement would become effective and binding following:
* approval of the scheme of arrangement at a meeting convened by the Court by a majority in number, representing 75 per cent. or
more in value, present and voting, either in person or by proxy, of Econergy Shareholders (or the relevant class or classes thereof);
* the resolution(s) required to approve and implement the scheme of arrangement being passed by the requisite majority of Econergy
Shareholders at an extraordinary general meeting of Econergy validly convened for such purpose; and
* sanction of the scheme of arrangement by the Court (with or without modifications, on terms reasonably acceptable to SESA) and
office copies of the orders of the Court sanctioning the scheme of arrangement being delivered for registration to Financial Supervision
Commission.
The availability of the Offer to persons not resident in the Isle of Man or the United Kingdom may be affected by the laws of the
relevant jurisdictions. Persons who are not resident in the Isle of Man or the United Kingdom should inform themselves about and observe any
applicable requirements.
The Offer will be governed by English law and will be subject to the exclusive jurisdiction of the English courts. The Offer will be
subject to the applicable requirements of the City Code, the Panel, the AIM Rules, the London Stock Exchange, the FSA, the Companies Act and
other legal or regulatory requirements.
The Offer will lapse if, before the First Closing Date or the date when the Offer becomes or is declared unconditional as to
acceptances, whichever is the later, the European Commission initiates proceedings under Article 6(1) of Council Regulation (EEC) 139/2004
in respect of the Offer or any matter arising from or relating to the Offer or any matter arising from or relating to the Offer is referred
to the Competition Commission.
APPENDIX 2
BASES AND SOURCES AND OTHER INFORMATION
(a) The value attributed to the existing issued share capital of Econergy is based upon 87,000,000 Econergy Shares in issue on 12
June 2008 (being the last Business Day prior to the publication of this Announcement).
(b) Unless otherwise stated in this Announcement, all prices for Econergy Shares and Trading Emissions Shares have been derived from
the AIM market appendix to the Daily Official List and represent the Closing Price on the relevant date.
DEFINITIONS
"AIM" the AIM market of the London Stock Exchange;
"AIM Rules" the rules published by the London Stock
Exchange entitled "AIM Rules for Companies";
"Acquisition" the proposed acquisition of the entire issued and to be issued
ordinary share capital of Econergy by SESA for a cash
consideration of 45 pence per Econergy Share by means of the
Offer;
"Business Day" any day (other than Saturday or Sunday) on which clearing banks
are generally open for business in the City of London;
"City Code" or "Code" The City Code on Takeovers and Mergers;
"Closing Price" the middle market quotation for the relevant share on the close
of trading on the Daily Official List on the relevant date;
"Companies Act" the Isle of Man Companies Act 1931;
"Conditions" the conditions to the Offer, which are set out in Appendix 1 to
this Announcement;
"Court" the High Court of Justice in the Isle of Man;
"Daily Official List" the Daily Official List of the London Stock Exchange;
"Dresdner Kleinwort" Dresdner Kleinwort Limited;
"Econergy" Econergy International plc, a company incorporated in the Isle
of Man with registered number 114667C;
"Econergy Group" Econergy and its subsidiary undertakings;
"Econergy Shareholders" the holders of Econergy Shares from time to time;
"Econergy Shares" the ordinary shares of 1 pence each in the capital of Econergy;
"Econergy Stock Option Plan" the Econergy International Corporation Stock Option Plan
pursuant to which certain employees and senior consultants of
Econergy International Corporation have been granted options
over Econergy Shares;
"Financial Supervision the Isle of Man Financial Supervision Commission;
Commission"
"First Closing Date" the first closing date of the Offer;
"Form of Acceptance" the form of acceptance relating to the Offer which will
accompany the Offer Document;
"FSA" the UK Financial Services Authority;
"Independent Econergy Thomas Stoner, Lee Atkins, Frederick Renner, Jack Pester, Peter
Directors" Vanderpump and Gerald Jones;
"Loan Agreement" has the meaning given to it in paragraph 9 of this Announcement;
"London Stock Exchange" London Stock Exchange plc;
"Offer" the offer to be made by SESA for the entire issued and to be
issued ordinary share capital of Econergy not already owned or
contracted to be acquired by SESA or its associates to be
implemented by way of a contractual offer or, in SESA's absolute
discretion, with the consent of the Panel, by way of a scheme of
arrangement;
"Offer Document" the document containing the Offer;
"Overseas Shareholders" Econergy Shareholders resident in or nationals or citizens of,
jurisdictions outside the Isle of Man or the UK or who are
nominees of, or custodians, trustees or guardians for, citizens
or nationals of such other jurisdictions;
"Panel" the Panel on Takeovers and Mergers;
"Regulatory Information any of the services approved by the London Stock Exchange for
Service" or "RIS" the distribution to the public of AIM announcements and included
within the list maintained on the London Stock Exchange's
website, www.londonstockexchange.com;
"SESA" Suez Energy South America Participaes Ltda., a company
established under the laws of Brazil;
"SESA Group" SESA and its subsidiary undertakings, parent undertakings and
subsidiary undertakings of such parent undertakings;
"Trading Emissions" Trading Emissions plc, a company incorporated in the Isle of
Man with registered number 113037C;
"Trading Emissions Shares" the ordinary shares of 1 pence each in the capital of Trading
Emissions;
"UK" or "United Kingdom" the United Kingdom of Great Britain and Northern Ireland;
"Wider SESA Group" SESA and its subsidiary undertakings, associated undertakings
and any other undertakings in which SESA and such undertakings
(aggregating their interests) have a substantial interest; and
"Wider Econergy Group" Econergy and its subsidiary undertakings, associated
undertakings and any other undertakings in which Econergy and
such undertakings (aggregating their interests) have a
substantial interest.
For the purposes of this Announcement, subsidiary, subsidiary undertaking and parent undertaking have the respective meanings given to
them by the UK Companies Act 1985 (but for this purpose ignoring paragraph 20(1)(b) of Schedule 4A of the Companies Act 1985).
This information is provided by RNS
The company news service from the London Stock Exchange
END
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