PROPOSED PLACING AND OPEN OFFER AND NOTICE OF GM

RNS Number : 0685J

Good Energy Group PLC

11 July 2013

 



THIS ANNOUNCEMENT IS RESTRICTED AND IT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA, AUSTRALIA OR NEW ZEALAND OR ANY OTHER STATE OR JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL

11 July 2013

GOOD ENERGY GROUP PLC

PROPOSED PLACING AND OPEN OFFER

AND NOTICE OF GENERAL MEETING

Good Energy Group plc ("Good Energy" or the "Company"), the 100% renewable electricity supplier, today announces its intention to raise up to approximately £3.8 million (approximately £3.6 million net of expenses).

Highlights

·      Proposed Placing to raise approximately £1.8 million and Open Offer to raise approximately £2.0 million

·      Issue price for the Placing and Open Offer of 125 pence per New Ordinary Share

·      Open Offer Entitlement for Qualifying Shareholders of 2 Open Offer Shares for every 15 Existing Ordinary Shares

Pursuant to the Capital Raising, the Board announces that it is proposing to undertake a Placing and Open Offer to raise up to approximately £3.8 million (approximately £3.6 million net of expenses) in aggregate through the issue of up to 3,113,335 New Ordinary Shares (in aggregate) at 125p per New Ordinary Share. 1,440,000 New Ordinary Shares will be issued through the Placing to raise approximately £1.8 million and up to 1,673,335 New Ordinary Shares will be issued through the Open Offer to raise up to approximately £2.0 million assuming full take up of the Open Offer.  Neither the Placing nor the Open Offer are underwritten. The Placing has been arranged by N+1 Singer with new and existing institutional and other investors, including certain directors. The Issue Price represents a discount of 16.9 per cent. to the mid-market closing price on 10 July 2013 (being the last practicable date prior to the publication of this announcement).

Definitions for all terms defined in this announcement are provided at the end of this announcement.

The Placing and Open Offer are conditional, inter alia, on the passing of Resolutions 1 to 3 by Shareholders at the General Meeting. If the Resolutions are passed, the New Ordinary Shares will be allotted immediately after the General Meeting and Admission of the New Ordinary Shares is expected to occur at 8.00 a.m. on 31 July 2013. Should Shareholder approval not be obtained at the General Meeting, the Placing and Open Offer will not proceed. The Placing and Open Offer are not underwritten.

A circular to shareholders will be posted today, extracts of which are set out below, to provide details of, and the background to, the Capital Raising, to set out the reasons why your Board believes that the Capital Raising is in the best interests of the Company and its Shareholders and to seek your approval to the Resolutions at the forthcoming General Meeting, which will be held at the offices of Chippenham Town Hall, High Street, Chippenham, Wiltshire, SN15 1ER on 30 July 2013 at 10 a.m

Copies of the Circular will be available free of charge from the Company's website (www.goodenergygroup.co.uk) and at the offices of N+1 Singer, One Bartholomew Lane, London, EC2N 2AX during normal business hours on any weekday (public holidays excepted).

General Meeting

For the purpose of effecting the Capital Raising, the Resolutions will be proposed at the General Meeting to be held at the offices of Chippenham Town Hall, High Street, Chippenham, Wiltshire, SN15 1ER on 30 July 2013 at 10 a.m.

Enquiries:

Good Energy Group plc                               Juliet Davenport, Chief Executive Garry Peagam, Finance Director	Tel. [phone]
N+1 Singer  (Nominated Adviser and Broker) Andrew Craig / Ben Wright	Tel: [phone]

Notes to editors:

Good Energy Group plc is a vertically integrated utility, supplying 100 per cent. renewable electricity to approximately 34,000 domestic and commercial customers, gas to approximately 10,500 domestic customers and supports a growing community of approximately 52,000 independent green power generators across the UK. Good Energy is a licensed electricity supplier. Good Energy supplies the national electricity grid with an equivalent amount of renewable energy to match its customers' demands over the course of a 12 month period.

The Group also has a renewable electricity generation business which includes a 9.2MW operational wind farm in Cornwall, an 8.2MW wind site in construction in Hampole, Yorkshire, two smaller sites totalling 6MW in planning, and a solar park development pipeline of over 175MW, in order to support the ongoing growth of the supply side of the business.

The Group was founded in May 2000, to lower UK carbon emissions by developing and distributing renewable electricity within the UK. The Group's values were developed by its founders in the late 1990s. It was their belief that climate change was a reality and its effects were likely to be increasingly harmful. Most importantly, they believed that the most effective way of promoting climate change solutions would be through a commercial enterprise returning value to its shareholders. One of the Group's key purposes is therefore to provide individuals and companies in the UK with a means by which they can reduce their contribution to the causes of climate change through selecting the Group to be their energy supplier.

Further information on Good Energy Group plc can be found on the Company's website, www.goodenergygroup.co.uk.

Important notice:

This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any New Ordinary Shares, nor shall it (or any part of it), or the fact of its distribution, form the basis of, or be relied on in connection with or act as any inducement to enter into, any contract or commitment whatsoever with respect to the proposed Placing and Open Offer or otherwise. This announcement is not a prospectus and investors should not subscribe for or purchase any New Ordinary Shares referred to in this announcement. Any offer to acquire New Ordinary Shares referred to in this announcement will be made, and any investor should make his investment, solely on the basis of information in the Circular expected to be published and made generally available in the United Kingdom today.

The distribution of this announcement and/or the transfer of the New Ordinary Shares in or into jurisdictions other than the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about and observe such restrictions. Any failure to comply with such restrictions may constitute a violation of the securities laws of any such jurisdiction. In particular, this announcement should not be distributed, forwarded to, or transmitted in or into the United States, Australia, Canada, Japan, the Republic of South Africa or New Zealand.

The New Ordinary Shares referred to in this announcement will not be offered in or into any jurisdiction unless such an offer can be made without contravention of any unfulfilled registration or other legal or regulatory requirements. The New Ordinary Shares have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction in the United States and may not be offered or sold in the United States absent registration or an exemption from registration. The New Ordinary Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission or other regulatory authority, nor have the foregoing authorities passed upon or endorsed the merits of the Placing and Open Offer or the accuracy or adequacy of the information contained in this announcement or any other document. Any representation to the contrary is unlawful and is a criminal offence in the United States.

N+1 Singer, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for the Company and no one else in connection with the Placing and Open Offer and will not regard any other person (whether or not a recipient of the Circular) as its client in relation to the Placing and Open Offer and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in connection with the Placing and Open Offer or any other matter referred to herein.

Cautionary note regarding forward looking statements:

This announcement includes certain ''forward-looking statements'' with respect to the business, strategy and plans of the Company and its current goals and expectations relating to its future financial condition and performance. Statements that are not historical facts, including statements about the Company's or the Directors' and/or management's beliefs and expectations are forward looking statements. Words such as ''believes'', ''anticipates'', ''estimates'', ''expects'', ''intends'', ''aims'', ''potential'', ''will'', ''would'', ''could'', ''considered'', ''likely'', ''estimate'' and variations of these words and similar future or conditional expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. By their nature, forward looking statements involve risk and uncertainty because they relate to events and depend upon circumstances that will occur in the future. A number of important factors could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements. These factors include, but are not limited to, those discussed in the Circular. Neither the Company nor any member of its group undertake any obligation publicly to update or revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, save in respect of any requirement under applicable laws, the Prospectus Rules, the Disclosure and Transparency Rules and other applicable regulations.

GOOD ENERGY GROUP PLC

PROPOSED PLACING AND OPEN OFFER

AND NOTICE OF GENERAL MEETING

1.   Background to and reasons for the Capital Raising

Good Energy was originally funded by a combination of investment from the management and board, and then during 2002-2007 by three EIS offerings to the Company's customer base, raising a total of £2.7 million. This early stage investment allowed the Company to build up its customer base, purchase the original 4 MW Delabole wind farm, providing at the time around 25 per cent. of the Company's electricity requirement, and invest in the necessary systems to place the Company on a solid operational platform. During this period the Company sold power to customers at around a 10 per cent. premium to the average market price, taking on predominantly early adopter type consumers who were prepared to pay the premium for the commitment to a green energy utility.

In 2008, the market place changed, and as a result of the global downturn, the customer elasticity of price to switch to Good Energy changed, resulting in customers being less prepared to pay a premium for 100 per cent. renewable electricity. The Company updated its strategy and put in place three key areas of work to be able to improve the price proposition of the Company:

·      Investing in Delabole to expand it from a 4 MW site producing 10,000 MWh per year to a 9.2 MW site producing 25,000 MWh per year. The power delivered by this site was bought by the Company and the ability to keep the trading margins in-house Good Energy reduced its cost of power purchase. In 2012, the Company's Delabole site provided over 16 per cent. of customers' requirements;

·      Investing in improvements in the forecasting systems developing, in conjunction with an external provider, a bespoke generation forecasting system based on weather feeds from across the country, helping to improve the forecasts for all the generators Good Energy buys power from; and

·      Investing in improvements to various IT systems, including the pre-cursor to the current Feed-in Tariff (small generator) system, to improve the Company's cost to serve. This enabled us to sign up and administer effectively the 52,000 FIT green electricity generators in the UK.

These investments have enabled the Company to underpin margins, improve the competitiveness of its offerings and to use its strong platform to grow the business. In 2012, the total customer base including gas, electricity and FIT customers grew by 80 per cent. and revenues grew around 30 per cent., with a 30 per cent. increase in PBT.

In order to be able to maintain momentum, as part of its Admission to trading on AIM, the Company raised £4 million from institutional investors in July 2012 to support its on-going strategy of:

·      Investing in a pipeline of renewable energy power projects to enable the Company to purchase power from its own sites and underpin the forward power purchasing of the Company;

·      Investing in further improvements in trading systems and procedures to enable the Company to improve margins through improved granularity of trading; and

·      Investing in marketing and brand awareness for the development of new partnerships with national membership organisations and increasing local and national advertising.

The expansion of the development team has been with a focus on providing resource to wind power and solar power projects that are most likely to receive planning consent. The Company now has 50MW in planning and a further 50MW in the final stage of preparation for planning submission across 10 sites.

The investment in the trading systems has resulted in the roll out of a new trading strategy from March 2013. The systems are now fully operational, and the improved ability to trade at a more granular level offered by the new systems appears to be delivering the results which the Board expected, with the potential for further improvements to come.

The business delivered overall growth of 13 per cent. in electricity customers in 2012. The Company can see this improved rate of growth continuing in 2013 and have been investing in new partnerships including National Trust and Soil Association to deliver this. The Board are also considering a new strategy on pricing in light of the new regulations on Retail Market Review, including a suite of payment products for customers, to better reflect their cost to serve. This is underpinned by the planned implementation of a new CRM system to allow us to manage these changes and further support ongoing improvements in cost to serve.

The Company is now looking to raise a further £1.8 million through a firm placing, and up to £2 million through an open offer, to be able to build out the first stage of the development portfolio of solar assets which are in planning at present.

1.1  Generation Portfolio

The Company is targeting a generation portfolio capacity of 110MW by 2016, predominantly through wind and solar, to support customer growth and is targeting 50 per cent. of electricity supply from

generating assets owned by Good Energy.

1.2  Solar & wind development background

Each solar project has a development timeline from site selection through to final construction of approximately 11 months whilst each wind project has a development timeline from site identification through to commissioning of up to 44 months.

A solar project has a total estimated build cost of £1 million per MW and produces around 960 MWh per MW per year, with an estimated levered IRR of 9-12 per cent. The build cost includes all financing, planning and legal costs as well as panel and construction costs.

Wind has a total estimated build cost of £1.5 million per MW and produces around 2,600 MWh per year per MW, with an estimated levered IRR of 14-20 per cent. The build cost includes all financing, planning and legal costs as well as turbine and construction costs.

The difference between the solar and wind project IRRs reflects the timelines and the higher levels of risk attached to developing a wind farm, compared to the contracted timelines and risks related to a solar project.

To support the development of the generation portfolio and to ensure that the long lead time items are ordered in good time to build them out, Good Energy has recently agreed a £7.5million RCF with Lloyds, as announced on 29 April 2013. The facility will be used to fund pre-planning costs, grid and network costs, ahead of financial close. At financial close on generation projects the amounts drawn down will be re-paid to the RCF.

1.3  Near-term solar financing and use of funds

The planning process for solar sites is less complicated than wind sites and we expect the solar sites will be out of planning in the second half of this year. The wind sites currently in planning will take longer, as the average time for a wind site through planning is 18 months.

Following planning determination the Company will decide which solar sites to take forward to financial close. The Company then expects to secure non-recourse project finance from lenders to allow them to be built and brought into operation. The Company already has these types of facilities for Delabole with Cooperative Bank, and for Hampole with Investec Bank, and has been in talks with these and other financial institutions about providing the requisite debt finance.

In addition to traditional project finance, Good Energy is also considering other options including putting in place construction finance, and refinancing post commissioning with a long term debt provider. Other options are to include credit arrangements with EPC contractors, which would effectively act like construction finance, and allow Good Energy to arrange long term finance post commissioning. Each of the potential deals will be considered on their relative merits and risk factors to the Company.

As a base case, the Board believes based on the indicative terms the Company has received from banks, other funders and EPC contractors combined with the proceeds from the Capital Raising, that the Company would be able to fund the construction of up to 10MW of solar sites which would be sufficient to supply around 2,300 homes. The Company's base case also assumes that the Company only receives planning consent for the part of the development portfolio that the Company could build out.

However, if the Company is able to receive planning approval for 100 per cent. of the solar sites, it will look to sell some of those sites in the open market which the Board believe will allow the Company to develop additional MW capacity.

Use of funds will be to repay to the RCF the initial pre-planning expenditure and put the remaining equity required into the solar portfolio for build-out.

The overall strategy of this investment supports the Company's ambition to purchase up to 50 per cent. of its electricity from its own portfolio, providing it with a natural hedge for the future market.

1.4  Generation Team

Mark Shorrock has led the development of the team and has put in place a similar structure to the team he worked with that had 21 successful solar applications for development of sites in 2011. Overall he has been responsible for the development of 67 MW in the UK in wind and solar and became acting Director of Generation in 2012 to lead and build the Good Energy development team.

The Board have since hired a Head of Generation, who has come from an onshore and offshore wind development background and will join the team in June 2013. He will report directly to Mark, and will be responsible for the build out and longer term development of the portfolio. The Board envisage that Mark's role will continue on identifying new sites and supporting the development capacity of the team, with the Head of Generation reporting to him, over the next two years. Mark is incentivised on a success basis to deliver on the targets set by the Company.

2.   Current Trading

The Company is now supplying electricity to approximately 34,000 domestic and commercial customers and supplying gas to approximately 10,500 domestic customers. As of June 2013 the Company had approximately 52,000 registered sites in its FIT administration business, including individual households and operators of domestic and industrial solar power plants.

The Company continues to trade in line with management expectations for the year.

3.   Details of the Placing and Open Offer

3.1  Structure

The Directors have given consideration as to the best way to structure the proposed equity fundraising, having regard to current market conditions, the composition of the Company's Shareholder register, the level of the Company's share price and the importance of pre-emption rights to Shareholders. After considering these factors, the Directors have concluded that the structure of the fundraising by way of the Placing and Open Offer is the most suitable option available to the Company and its Shareholders as a whole. The Open Offer provides an opportunity for all Qualifying Shareholders to participate in the fundraising by acquiring Open Offer Shares pro rata to their current holdings of Existing Ordinary Shares with the option for subscribing for more pursuant to the Excess Application Facility subject to clawback.

The Issue Price of 125 pence per New Ordinary Share represents a 16.9 per cent. discount to the closing middle market price of 150.5 pence per Existing Ordinary Share on 10 July 2013, the last business day before the announcement of the Capital Raising.

3.2  Principal terms of the Placing

The Company has conditionally raised £1.8 million by means of the placing of 1,440,000 new Ordinary Shares at the Issue Price to the Placees. A General Meeting is being called to seek Shareholders' approval to grant new authorities to enable the Directors, inter alia, to complete the Placing. The Placing is conditional on (amongst other things) Admission and passing of Resolutions 1 to 3 and has not been underwritten.

All of the Placing Shares have been placed with institutions and other investors and are not, therefore, being offered to existing Shareholders and do not form part of the Open Offer. The Placing Shares will, upon issue, rank pari passu with each other, the Existing Ordinary Shares and the Open Offer Shares in issue following the Capital Raising.

The Company has appointed N+1 Singer as its agent to use its reasonable endeavours to procure subscribers for the Placing Shares at the Issue Price.

Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM. It is expected that Admission will become effective and that dealings will commence at 8.00 a.m. on 31 July 2013.

3.3  Principal terms of the Open Offer

Subject to the fulfilment of the conditions of the Open Offer, Qualifying Shareholders are being given the opportunity to subscribe for the Open Offer Shares at a price of 125 pence per Open Offer Share, pro rata to their holdings of Existing Ordinary Shares on the Record Date on the basis of:

2 Open Offer Shares for every 15 Existing Ordinary Shares

Qualifying Shareholders are also being given the opportunity, provided that they take up their Open Offer Entitlement in full, to apply for Excess Shares through the Excess Application Facility.

The Open Offer is conditional on the Placing and Open Offer Agreement becoming or being declared unconditional in all respects and not being terminated before Admission. The principal conditions to the Open Offer are the same as those that apply to the Placing.

Assuming full take-up under the Open Offer, the issue of the Open Offer Shares will raise further gross proceeds of approximately £2.0 million for the Company.

The Open Offer Shares will, upon issue, rank pari passu with the Placing Shares to be issued pursuant to the Placing.

Fractions of Open Offer Shares will not be allotted to Qualifying Shareholders in the Open Offer and entitlements under the Open Offer will be rounded down to the nearest whole number of Open Offer Shares. The fractional entitlements will be aggregated and made available to Qualifying Shareholders under the Excess Application Facility.

Qualifying Shareholders with holdings of Existing Ordinary Shares in both certificated and uncertificated form will be treated as having separate holdings for the purpose of calculating the Open Offer Entitlements.

3.4  Excess Application Facility

The Excess Application Facility will enable Qualifying Shareholders, provided that they take up their Open Offer Entitlement in full, to apply for Excess Open Offer Entitlements. Qualifying non-CREST Shareholders who wish to apply to acquire more than their Open Offer Entitlement should complete the relevant sections on the Application Form. Qualifying CREST Shareholders will have Excess CREST Open Offer Entitlements credited to their stock account in CREST. Applications for Excess Open Offer Entitlements will be satisfied only and to the extent that corresponding applications by other Qualifying Shareholders are not made or are made for less than their Open Offer Entitlements. If applications under the Excess Application Facility are received for more than the total number of Open Offer Shares available following take-up of Open Offer Entitlements, such applications will be scaled back to the number of Excess Shares applied for by Qualifying Shareholders under the Excess Application Facility.

Application will be made for the Open Offer Entitlements and Excess Open Offer Entitlements in respect of Qualifying CREST Shareholders to be admitted to CREST. It is expected that such Open Offer Entitlements and Excess Open Offer Entitlements will be admitted to CREST at 8.00 a.m. on  12 July 2013. Such Open Offer Entitlements and Excess Open Offer Entitlements will also be enabled for settlement in CREST at 8.00 a.m. on 12 July 2013. Applications through the means of the CREST system may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim.

Qualifying non-CREST Shareholders will have received an Application Form which sets out their entitlement to Open Offer Shares as shown by the number of Open Offer Entitlements allocated to them. Qualifying CREST Shareholders will receive a credit to their appropriate stock accounts in CREST in respect of their Open Offer Entitlements on 12 July 2013.

Shareholders should note that the Open Offer is not a rights issue. Qualifying CREST Shareholders should note that although the Open Offer Entitlements and Excess Open Offer Entitlements will be admitted to CREST and be enabled for settlement, applications in respect of entitlements under the Open Offer may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim. Qualifying non-CREST Shareholders should note that the Application Form is not a negotiable document and cannot be traded. Qualifying Shareholders should be aware that in the Open Offer, unlike in a rights issue, any Open Offer Shares not applied for will not be sold in the market or placed for the benefit of Qualifying Shareholders who do not apply under the Open Offer. If applications are made for less than all of the Open Offer Shares available, then the lower number of Open Offer Shares will be issued.

For Qualifying non-CREST Shareholders, completed Application Forms, accompanied by full payment, should be returned by post or by hand (during normal business hours only) to Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol, BS99 6ZY so as to arrive as soon as possible and in any event so as to be received no later than 11 a.m. on 29 July 2013. For Qualifying CREST Shareholders the relevant CREST instructions must have been settled no later than 11 a.m. on 29 July 2013.

3.5  Other information relating to the Capital Raising

The Placing and Open Offer are conditional, inter alia, upon:

(a)  the passing of Resolutions 1 to 3;

(b)  the Placing and Open Offer Agreement becoming unconditional in all respects (other than Admission) and not having been terminated in accordance with its terms; and

(c)  Admission of the Placing Shares and Open Offer Shares becoming effective by not later than 31 July 2013 (or such later time and/or date as N+1 Singer may agree, not being later than 31 August 2013).

Accordingly, if any of such conditions are not satisfied, or, if applicable, waived, the Placing and Open Offer will not proceed.

The Placing and Open Offer will result in the issue of in total 3,113,335 New Ordinary Shares assuming full take up under the Open Offer (representing, in aggregate, approximately 19.9 per cent. of the Enlarged Share Capital). The New Ordinary Shares, when issued and fully paid, will rank pari passu in all respects with the Existing Ordinary Shares and therefore rank equally for all dividends or other distributions declared, made or paid after the date of issue of the New Ordinary Shares. No temporary documents of title will be issued.

Following the issue of the New Ordinary Shares pursuant to the Capital Raising, Qualifying Shareholders who take up their full entitlements, excluding any New Ordinary Shares acquired through the Excess Application Facility, in respect of the Open Offer will undergo a dilution of up to 9.2 per cent. to their interests in the Company because of the Placing. Qualifying Shareholders who do not take up any of their entitlements in respect of the Open Offer will experience a more substantial dilution of approximately 19.9 per cent. to their interests in the Company because of the Capital Raising.

Application will be made to the London Stock Exchange for the Placing Shares and the Open Offer Shares to be admitted to trading on AIM. It is expected that Admission will become effective on 31 July 2013 and that dealings for normal settlement in the New Ordinary Shares will commence at 8.00 a.m. on 31 July 2013.

4.   Related Party Transactions

4.1  Substantial Transactions

Schroders plc, a substantial shareholder in the Company (as defined by the AIM Rules), has conditionally agreed to subscribe for Placing Shares pursuant to the Placing. The participation of Schroders plc in the Placing represents related party transactions for the purposes of the AIM Rules.

The Directors, having consulted with the Company's Nominated Adviser, N+1 Singer, consider the terms of Schroders plc participation in the Placing to be fair and reasonable insofar as Shareholders are concerned. In providing advice to the Directors, N+1 Singer has taken into account the commercial assessment of the Directors.

4.2  Shire Oak Energy Limited

There is a contract dated 10 July 2013 between Good Energy Generation Limited (GEG) and Shire Oak Energy Limited, a company registered in England and Wales under company number 8100687 (SOL). SOL is a related party as defined by the AIM Rules by virtue of the shareholding in it of Mark Shorrock, the husband of Juliet Davenport, the Chief Executive Officer of the Company. SOL has been appointed as a consultant by GEG to, inter alia, introduce sites suitable for development as solar parks to GEG, to mentor and aid GEG in the sourcing of renewable energy generation installation sites, the development and the obtaining of funding for the development of such solar sites and reviewing the potential solar park and wind farm sites in the Group's portfolio.

Under the contract SOL will receive consultancy fees of £750 per day based on time sheets.

In addition SOL will be entitled to the following commission payments:

(a)  in relation to the development of a solar site, a commission of:

(i)         up to the lesser of £40,000 per MW installed or 30% of such sum as is produced by the application of an all equity IRR of 8% to the financial close model used by the relevant third party debt or equity provider in connection with the provision of long term finance for the development of a solar park on that site; or

(ii)         where a solar site is not developed by the construction of a solar park but sold, the lesser of 30% of the net proceeds of sale, (but excluding as regards calculation of the net proceeds of sale any long lead time payments for transformers, switchgear and/or disconnectors), or £40,000 per MW permitted for that solar site pursuant to a planning permission for development of that site obtained prior to the sale; and

(b)  in relation to the development of a wind farm site, a commission of:

(iii)        up to the lesser of £75,000 per MW installed or 10% of such sum as is produced by the application of an all equity IRR of 11% to the financial close model used by the relevant third party debt or equity provider in connection with the provision of long term finance for the development of a wind farm on that site; or

(iv)        where a wind farm site is not developed by the construction of a wind farm but sold, the lesser of 10% of the net proceeds of sale, (but excluding as regards calculation of the net proceeds of sale any long lead time payments for transformers, switchgear and/or disconnectors), or £75,000 per MW permitted for that wind farm site pursuant to a planning permission for development of that site obtained prior to the sale.

Commission payable as regards solar sites is subject to deduction of an amount equal to 30% of the relevant costs of solar sites not successfully developed as solar parks where the investment by the Group is written off and as regards wind farm sites is subject to deduction of an amount equal to 50% of the relevant costs of wind farm sites not successfully developed as wind farms where the investment by the Group is written off.

Commission is payable in instalments based on certain milestones being reached.

If planning is obtained in 2013 for the development of 100MW of solar parks which are then either constructed or sold, SOL could be entitled to commission in the order of £3,000,000.

The independent Directors, (being the Directors other than Juliet Davenport), consider having consulted with N+1Singer, consider the Company's nominated adviser, that the terms of the contract are fair and reasonable insofar as the Company's shareholders are concerned.

5.   Directors' Participation

John Maltby, Chairman, and Francesca Ecsery, Non-Executive Director, are participating in the Placing amounting to an aggregate subscription for 122,400 Placing Shares or approximately 8.5 per cent. of the Placing. Following the Placing, and assuming nil take up of the Open Offer, the Directors will beneficially own, in aggregate 8.89 per cent. of the Enlarged Share Capital.

6.   General Meeting

At the General Meeting, the following Resolutions will be proposed:

(a)  a special resolution to amend the articles of association of the Company to increase the stated authorised share capital of the Company from £1,000,000 divided into 20,000,000 Ordinary Shares to £2,000,000 divided into 40,000,000 Ordinary Shares. While the concept of authorised share capital has been abolished by the Act, any statement of authorised share capital in a company's articles of association will act as a limit on the number of shares that can be allotted by that company. The resolution in this paragraph (a) is therefore required in order for the Capital Raising to proceed and to enable the Directors to allot shares pursuant to the general allotment authority and to have share capital for future issue as might be requested and approved by the shareholders;

(b)  an ordinary resolution to grant authority to the Directors to allot up to 3,115,000 New Ordinary Shares in the capital of the Company or to grant rights to subscribe for or convert any security into shares in the capital of the Company pursuant to section 551 of the Act, being up to an aggregate nominal amount of £155,750. The Directors will limit this authority to the allotment of New Ordinary Shares pursuant to the Capital Raising and the authority will expire at the conclusion of the Annual General Meeting of the Company to be held in 2014 after the passing of the Resolution;

(c)  a special resolution to disapply the statutory pre-emption rights contained in section 561(1) of the Act in respect of the allotment of up to 3,115,000 New Ordinary Shares with an aggregate nominal amount of up to £155,750. The Directors will again limit this authority to the allotment of New Ordinary Shares pursuant to the Capital Raising and the authority will expire at the conclusion of the Annual General Meeting of the Company to be held in 2014 after the passing of the Resolution;

(d)  an ordinary resolution to grant a general authority to the Directors to allot up to 1,900,000 shares in the capital of the Company or to grant rights to subscribe for or convert any security into shares in the capital of the Company pursuant to section 551 of the Act, being up to an aggregate nominal amount of £95,000. This authority will represent approximately 12 per cent. of the Enlarged Share Capital and is in line with the Directors' existing share authorities granted pursuant to section 551 of the Act at the Company's last AGM which was held earlier this year; and

(e)  a special resolution to disapply the statutory pre-emption rights contained in section 561(1) of the Act in respect of the allotment of up to 950,000 equity shares with an aggregate nominal amount of up to £47,500. This authority will represent approximately 6 per cent. of the Enlarged Share Capital and is in line with the Directors' existing share authorities granted in respect of the disapplication of section 561(1) granted at the Company's last AGM which was held earlier this year.

The Directors have irrevocably undertaken to vote or procure the voting in favour of the Resolutions in respect of 1,267,939 Existing Ordinary Shares, in aggregate, representing approximately 10.1 per cent. of the existing issued ordinary share capital of the Company.

7.   Directors' recommendation

The Directors consider the Placing and Open Offer to be in the best interests of the Company and its Shareholders as a whole.

Accordingly the Directors unanimously recommend that Shareholders vote in favour of the Resolutions to be proposed at the General Meeting.

Expected Timetable of Principal Events

	2013
Record Date for entitlement under the Open Offer	Close of business on 8 July
Announcement of the Placing and Open Offer	11 July
Posting of this Circular, Forms of Proxy and, to Qualifying non-CREST Shareholders only, the Application Forms	11 July
Open Offer Entitlements and Excess CREST Open Offer Entitlements credited to stock accounts in CREST of Qualifying CREST Shareholders	8.00 a.m. on 12 July
Latest recommended time and date for requesting withdrawal of Open Offer Entitlements and Excess CREST Open Offer Entitlements from CREST	4.30 p.m. on 24 July
Latest time for depositing Open Offer Entitlements and Excess CREST Open Offer Entitlements into CREST	3 p.m. on 25 July
Latest time and date for splitting Application Forms (to satisfy bona fide market claims)	3 p.m. on 25 July
Latest time and date for receipt of Forms of Proxy	10 a.m. on 28 July
Latest time and date for receipt of completed Application Forms and payment in full under the Open Offer or settlement of relevant CREST instruction (as appropriate)	11 a.m on 29 July
Expected time and date of announcement of results of the Placing and Open Offer	7.00 a.m. on 30 July
General Meeting	10 a.m. on 30 July
Expected time of announcement of results of the General Meeting	by 4.30 p.m. on 30 July
Admission effective and dealings in the Placing Shares and Open Offer Shares expected to commence on AIM	8.00 a.m. on 31 July
Expected date for crediting of Placing Shares and Open Offer Shares in uncertificated form to CREST stock accounts	8.00 a.m. on 31 July
Expected date of despatch of share certificates in respect of Placing Shares and Open Offer Shares in certificated form	12 August

Definitions

Act means the Companies Act 2006 (as amended)

Admission means the admission to trading on AIM of the New Ordinary Shares to be issued pursuant to the Capital Raising taking place in accordance with the AIM Rules for Companies

AIM means the market of that name operated by the London Stock Exchange

AIM Rules for Companies means the AIM Rules for Companies, as published and amended from time to time by the London Stock Exchange

AIM Rules for Nominated Advisers means the rules for nominated advisers to AIM companies, as published and amended from time to time by the London Stock Exchange

Applicant means a Qualifying Shareholder or a person entitled by virtue of a bona fide market claim who lodges an Application Form under the Open Offer

Application Form means the application form which accompanies this Circular for Qualifying non-CREST Shareholders for use in connection with the Open Offer

Articles means the existing articles of association of the Company as at the date of this Announcement

Board means the board of directors of the Company from time to time

Business Day means any day (excluding Saturdays and Sundays) on which banks are open in London for normal banking business and the London Stock Exchange is open for trading

Capital Raising means together, the Placing and Open Offer, details of which are set out in this Announcement

CCSS means the CREST courier and sorting service, established by Euroclear UK & Ireland to facilitate, inter alia, the deposit and withdrawal of certified securities

certificated or certificated form means not in uncertificated form

Company or Good Energy means Good Energy Group PLC

CREST means the relevant system for the paperless settlement of trades and the holding of uncertificated securities operated by Euroclear UK & Ireland in accordance with the CREST Regulations

CREST member means a person who has been admitted by Euroclear UK & Ireland as a system-member (as defined in the CREST Regulations)

CREST participant means a person who is, in relation to CREST, a system participant (as defined in the CREST Regulations)

CREST payment shall have the meaning given in the CREST Manual issued by Euroclear UK & Ireland

CREST Regulations means the Uncertified Securities Regulations 2001, as amended

CREST sponsor means a CREST participant admitted to CREST as a CREST sponsor

CREST sponsored member means a CREST member admitted to CREST as a sponsored member (which includes all CREST Personal Members)

Directors means the directors of the Company at the date of this Announcement

Enlarged Share Capital means the issued ordinary share capital of the Company immediately following Admission

enabled for settlement means in relation to Open Offer Entitlements or Excess Open Offer Entitlements, enabled for the limited purpose of settlement of claim transactions and unmatched stock event transactions (each as described in the CREST Manual issued by Euroclear UK & Ireland)

Euroclear UK & Ireland or Euroclear means Euroclear UK & Ireland Limited, the operator of CREST

Excess Application Facility means the arrangement pursuant to which Qualifying Shareholders may apply for Open Offer Shares in excess of their Open Offer Entitlement

Excess CREST Open Offer Entitlement means, in respect of each Qualifying CREST Shareholder, the entitlement to apply for Open Offer Shares in addition to his Open Offer Entitlement credited to his stock account in CREST, pursuant to the Excess Application Facility, which is conditional on him taking up his Open Offer Entitlement in full and which may be subject to scaling back

Excess Open Offer Entitlement means an entitlement for each Qualifying Shareholder to apply to subscribe for Open Offer Shares in addition to his Open Offer Entitlement pursuant to the Excess Application Facility which is conditional on him taking up his Open Offer Entitlement in full and which may be subject to scaling back

Excess Shares means New Ordinary Shares in addition to the Open Offer Entitlement for which Qualifying Shareholders may apply under the Excess Application Facility

Excluded Territories means the United States, Australia, Canada, Japan, the Republic of South Africa, the Republic of Ireland and any other jurisdiction where the extension or availability of the Open Offer would breach any applicable law or regulations

Existing Ordinary Shares means the existing issued ordinary shares of 5p each in the capital of the Company as at the date of this Circular

Form of Proxy means the form of proxy relating to the General Meeting being sent to Shareholders with this Circular

FCA means the Financial Conduct Authority of the United Kingdom

FSMA means the Financial Services and Markets Act 2000 (as amended)

General Meeting means the general meeting of the Company convened at 10 a.m. on 31 July 2013 (or any adjournment of it)

Group means the Company and its subsidiary undertakings

IRR means the internal rate of return

ISIN means International Securities Identification Number

Issue Price means 125 pence per New Ordinary Share

London Stock Exchange means London Stock Exchange plc

Member Account ID means the identification code or number attached to any member account in CREST

New Ordinary Shares means up to 3,113,335 ordinary shares of 5p each in the capital of the Company to be issued pursuant to the Capital Raising

N+1 Singer means N+1 Singer of One Bartholomew Lane, London, EC2N 2AX, the Company's Nominated Adviser and Broker

Official List means the Official List of the UK Listing Authority

Open Offer means the invitation to Qualifying Shareholders to subscribe for Open Offer Shares at the Issue Price on the terms of and subject to the conditions set out or referred to in Part IV of this Circular and, where relevant, in the Application Form

Open Offer Entitlement means the pro rata basic entitlement for Qualifying Shareholders to apply to subscribe for 2 Open Offer Shares for every 15 Existing Ordinary Shares held by them on the Record Date pursuant to the Open Offer

Open Offer Shares means the 1,673,335 New Ordinary Shares for which Qualifying Shareholders are being invited to apply under the terms of the Open Offer

Overseas Shareholders means Shareholders who are resident in, or who are citizens of, or who have registered addresses in, territories other than the United Kingdom

Participant ID means the identification code or membership number used in CREST to identify a particular CREST member or other CREST participant

Placees means the persons who conditionally agree to subscribe for the Placing Shares

Placing means the conditional firm placing by N+1 Singer of the Placing Shares at the Issue Price pursuant to the Placing and Open Offer Agreement, as described in Part I of this Circular

Placing and Open Offer Agreement means the agreement dated 11 July 2013 between the Company, and N+1 Singer relating to the Placing and Open Offer

Placing Shares means the 1,440,000 New Ordinary Shares which have been placed conditionally with investors by N+1 Singer pursuant to the Placing

Prospectus Rules means the rules made by the FCA under Part VI of FSMA in relation to offers of transferable securities to the public and admission of transferable securities to trading on a regulated market

Qualifying CREST Shareholders means Qualifying Shareholders whose Existing Ordinary Shares on the register of members of the Company at the close of business on the Record Date are held in uncertificated form

Qualifying non-CREST Shareholders means Qualifying Shareholders whose Existing Ordinary Shares on the register of members of the Company at the close of business on the Record Date are held in certificated form

Qualifying Shareholders means holders of Existing Ordinary Shares on the Company's register of members at the Record Date (other than certain Overseas Shareholders)

RCF means a revolving credit facility

Record Date means close of business on 8 July 2013

Registrar, Receiving Agent or Computershare means Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol, BS99 6ZY

Resolutions means the resolutions set out in the notice of the General Meeting

Shareholders means holders of Existing Ordinary Shares

stock account means an account within a member account in CREST to which a holding of a particular share or other security in CREST is credited

subsidiary means a subsidiary undertaking as that term is defined in the Act

uncertificated or uncertificated form means recorded on the relevant register or other record of the share or other security concerned as being held in uncertificated form in CREST, and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST

UK Listing Authority means the FCA acting in its capacity as the competent authority for the purposes of Part VI of FSMA

United Kingdom or UK means the United Kingdom of Great Britain and Northern Ireland

£ or Pounds means UK pounds sterling, being the lawful currency of the United Kingdom

US Securities Act means the United States Securities Act of 1933, (as amended).

 

END

 

 

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