PPG Plutus Powergen Plc

TIDMPPG

RNS Number : 8185T

Plutus PowerGen PLC

19 November 2019

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

Plutus PowerGen Plc / Ticker: PPG / Index: AIM

19 November 2019

PLUTUS POWERGEN PLC

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

Operational and financial update

On 29 August 2019 the Company announced that it had received notice, on 27 August 2019, from the non-executive directors of Rockpool Investments LLP ("Rockpool") that the Company's management contracts in connection with the existing six Rockpool EIS funded flexible energy generation ("FlexGen") sites were to be terminated. The notice gave Plutus a six month notice period. The Board is today providing an update on the position with the Company's management contracts with Rockpool and its management agreement with Attune Energy Limited ("Attune Energy").

Following the departure of Paul Lazarevic (the Company's former Operations Director) on 29 October 2019 the Company was potentially in breach of their management contracts with Rockpool due to the Company not having the necessary competent personnel to carry out the obligations stipulated in these management contracts. Under the management contracts the Company had a 60 day period to remedy this breach. Following a recent meeting between the Company, Rockpool, the directors of Plutus's co-investee companies in the FlexGen sites and third parties put forward by the Company to run the FlexGen sites, the Company has been informed that the third parties have withdrawn their offer to run the sites for the period through to the end of the notice period, being on 19 February 2020.

In addition, the Company announces that Attune Energy's management contract with Plutus has been terminated by Attune Energy on a three month notice period and with effect from 21 January 2020. The Company is unable to manage this standby diesel generation site due to not having the requisite in-house operational expertise and has not been able to secure appropriate sub-contractors to manage the site.

As a result of the above developments the Company has, with immediate effect, ceased to receive management fees from its six FlexGen sites and its management contract with Attune Energy. The Company had 60 days from 21 October 2019 to remedy the breaches following which the management fees would be re-instated until the end of the notice periods. However, the Company now believes it will be difficult for it to do this in the timescale afforded. As such Plutus do not anticipate accruing any further management fees on its six FlexGen sites or its management contract with Attune Energy.

The loss of management fees will have a negative impact on the Company's working capital position as this is presently the Group's sole revenue stream. The Group is currently owed to 21 October 2019, through its subsidiary Plutus Energy Limited, c.GBP610,000 in accrued and deferred fees from Rockpool. There can be no certainty as to when these accrued and deferred fees will be received by the Company. As such the Company's current cash resources remain limited and the working capital position of the Group is highly constrained. As announced on 31 October 2019 the Company has implemented a cost control strategy including board members not drawing salaries and the Board are confident the Company would be able to raise further funds to enable the Company's debts to be paid as they fall due, should the need arise.

Whilst the Company will cease to operate the FlexGen sites, it will continue to have an economic interest of c.44.5% in each site through the separate co-investee companies which own the standby diesel generation sites.

As previously outlined Rockpool and Plutus have been exploring opportunities to maximise the value of the FlexGen sites and have been seeking to secure a sale of the portfolio of the six 20MW FlexGen sites and the one gas site they have in development, in which the Company retains a 44.5% equity stake. The Company is in early stage discussions on an indicative offer that has been received for the six 20MW FlexGen sites. Rockpool are the majority investor on these sites and will manage the negotiations on the potential sale of these FlexGen sites.

Should discussions progress on the sale of the FlexGen sites it is likely that the sale of the Company's interests in the FlexGen sites would constitute a fundamental change of business of the Company pursuant to Rule 15 of the AIM Rules for Companies given the FlexGen sites represent the majority of the Company's existing operations and as such would require, inter alia, approval of the Company's shareholders at a general meeting. There is no certainty that a disposal of the FlexGen sites will take place or what the terms of any such potential disposal may be.

Moreover, further to the announcement on 13 November 2019 in respect of receipt of a purported notice of requisition of general meeting, having sought legal advice the Board continue to believe that the requisition notice is invalid and the Company can confirm that at this stage they have not received any further communication from the requisitioners.

The Company will provide further updates at the appropriate time.

**ENDS**

For further information, please visit www.plutuspowergen.com, or contact:

 
                                               +44 (0) 20 8720 
 Plutus PowerGen Plc                            6562 
 Charles Tatnall, Executive Chairman 
 
 Allenby Capital Limited (Nominated Adviser    +44 (0)20 3328 
  and Joint Broker)                             5656 
 Nick Athanas 
  James Hornigold 
 
 Turner Pope Investments (TPI) Limited         +44 (0)20 3621 
  (Joint Broker)                                4120 
 Andy Thacker 
 
 St Brides Partners Limited (Financial         +44 (0)20 7236 
  PR)                                           1177 
 Isabel de Salis 
 

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