com:20081119:RnsS5293I
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RNS Number : 5293I  
  
Voller Energy Group PLC  
  
19 November 2008  
  
Voller Energy Group plc   
  
("Voller" or the "Company")  
  
Proposed Capital Reduction, Change of Strategy and Dividend  
  
Further to the announcement on 17 November 2008 the Board has today sent a 
circular to shareholders detailing the Proposed Capital Reduction, Change of 
Strategy and Dividend.    
  
PROPOSED CAPITAL REDUCTION, CHANGE OF STRATEGY AND DIVIDEND  
  
1.    Introduction  
  
The Board intends, subject to the approval of Shareholders and the Court, to 
reduce the Company's capital in order to allow the payment of a cash dividend.  
  
The Board has also decided, for the reasons described below, to discontinue the 
Company's business of designing, developing, manufacturing and marketing 
portable fuel cell systems and to cease trading. If the Company ceases to trade 
as a business, it will be considered a fundamental change of the Company's 
business, resulting in the Company being treated as an "investing company" under 
the AIM Rules. The new strategy of the Company will be to become an investing 
company with a view to seeking acquisition targets who will be attracted to the 
Company's status as an AIM listed holding company.  
  
.  
  
2.     Background to, and reasons for, the proposed Capital Reduction, change of 
strategy and dividend  
  
2.1 Background  
  
Voller was established to design, develop, manufacture and market a range of 
portable fuel cell systems for use as mobile generators and battery chargers. 
Since Admission to AIM in February 2005, Voller has been engaged in the 
development of fuel cell systems which combine reformer technology with existing 
fuel cell stack technology within an integrated and standalone system. 
Specifically, Voller has focused on the development of systems capable of 
operating from standard LPG hydrocarbon fuel, a widely available fuel. 
Importantly, systems which operate on a fuel such as LPG are not reliant on the 
emergence of the hydrogen economy and associated infrastructure.  
  
The result of this development is the "Emerald" fuel cell system, a 1kW class 
transportable product targeted at the construction, leisure, infrastructure, 
back-up power and vehicle APU markets. The Emerald unit acts as an automatic 
battery charger, and is intended to be a more fuel efficient, environmentally 
friendly, cleaner and quieter power system than an equivalent diesel or LPG 
generator. Its performance makes it suitable for a number of applications. 
Furthermore, the expected low servicing needs and fuel efficiency of the units, 
relative to other equivalent generators, means that the overall lifetime costs 
to users are projected to be lower, despite a higher up front capital cost. The 
Emerald system addresses the large and growing market for environmentally 
friendly power generation systems.  
  
Following field trials of prototype Emerald fuel cell systems in 2007, the 
Company began shipping commercial units to initial customers in 2008. The Board 
believes that given access to suitable funding, the Emerald fuel cell technology 
could be the focus of a successful business model whilst also making a 
contribution to the easing of the pressures on global warming. However, the 
requirement to fund ongoing development of the products, the initial high 
manufacturing cost of the units, and the limited number of units shipped to date 
meant that the Company required additional funding to execute its business plan 
and to fully commercialise the technology.  
  
2.2 Strategic review  
  
In February 2008, the Company began a strategic review to explore all options 
available to secure additional funding for the business of the Company and to 
maximise Shareholder value. These options included, but were not limited to, 
strategic alliances, mergers, refinancing or a sale of the business.  
  
The strategic review process has thus far failed to identify any satisfactory 
options for securing additional funding for the Company. Whilst the Board 
continues to have discussions with third parties, it is not known whether these 
will lead to a satisfactory conclusion which will secure the future of the 
Company. The Board remains willing to consider any serious interest from other 
third parties.  
  
2.3 Change of strategy  
  
Given that the Company has not been able to secure future funding or to find a 
suitable strategic partner, the Board has reluctantly concluded that not all of 
the Company's original strategic aims of designing, developing, manufacturing 
and marketing portable fuel cell systems can be achieved by the Company. The 
Board has therefore decided to take steps to cease the Company's trading. The 
Board intends that the Company shall remain listed on AIM but it shall cease to 
have any underlying trading business. This change of strategy will result in the 
Company being treated as an "investing company" under the AIM Rules and the 
Company will require Shareholder approval of its proposed ongoing investing 
strategy by ordinary resolution at the General Meeting.  
  
The Board, having been advised by Seymour Pierce, believes that there is merit 
in the Company remaining as an AIM quoted investing company, with a view to 
acquiring another business. Any transaction of this type would be classified as 
a "reverse takeover" under the AIM Rules and would be subject to Shareholder 
approval and a new Admission document would be required to be published.  
  
2.4 Investing strategy  
  
The Company's proposed investing strategy is to seek to make an acquisition or 
acquisitions which constitute a reverse takeover. The Board believes it is in 
the best interests of the Company to adopt this investing strategy and is 
therefore asking Shareholders to approve it by voting in favour of resolution 1 
at the General Meeting.  
  
The Company must implement its investing strategy described above to the 
satisfaction of the London Stock Exchange within 12 months of resolution 1 
having been passed.  
  
If the Company does not make a reverse takeover within 12 months from the date 
of the General Meeting its listing on AIM will be suspended. If the Company 
subsequently fails to make a reverse takeover within a further six months from 
its date of suspension, its listing on AIM will be cancelled. J E Brown and 
Michael Clarke will work (each for a reduced remuneration of £1,000 per annum) 
with the Company's advisers in trying to source potential reverse takeover 
targets, and the remaining Directors intend to step down from the Board 
following the completion of the Capital Reduction.  
  
If either (i) Shareholder approval of the investing strategy is not obtained at 
the General Meeting, or (ii) Shareholder approval of the investing strategy is 
obtained at the General Meeting but any future proposed reverse takeover 
presented for approval by the Company to the Shareholders is not so approved by 
Shareholders or no suitable reverse takeover targets are found by the Company 
within 12 months of the General Meeting, then the Directors currently propose 
that any remaining cash would be returned to Shareholders by means of a 
distribution on winding up of the Company.  
  
It is intended that myself and Michael Clarke will, at our discretion, take all 
reasonable steps to preserve the intellectual property of the Group during the 
period in which potential acquisition targets are being sought by the Company.  
  
2.5 Dividend  
  
The Board has resolved that, subject to Court and Shareholder approval of the 
Capital Reduction (and subject to the availability of distributable reserves), 
some cash should be returned to Shareholders as soon as possible, with a 
residual reserve retained to meet payments to creditors and costs.  
  
In order to pay a cash dividend to Shareholders, the Company must undertake the 
Capital Reduction. Subject to the Capital Reduction taking effect and subject to 
the creditor protections (if any) which the Court imposes, the Capital Reduction 
should give rise to realised profits which will be credited to the profit and 
loss account of the Company.  
  
3.     Capital Reduction  
  
Under the Act, a company may reduce or cancel its share premium account and 
reduce its share capital provided that it obtains the approval of its 
shareholders by special resolution at a general meeting and that the Court 
confirms the cancellation and the reduction.  
  
As at 30 June 2008, the balance on the Company's profit and loss account stood 
at a deficit of £6,602,000, while the balance of the Share Premium Account stood 
at approximately £8,884,000. The balance on the Share Premium Account is 
attributable to the difference, or 'premium', between the nominal value of the 
Ordinary Shares issued by the Company and the price at which the Ordinary Shares 
were issued.  
  
The Company is seeking the approval of Shareholders to (i) cancel its Share 
Premium Account (ii) reduce its issued share capital from £460,010, divided into 
23,000,513 Ordinary Shares of 2 pence each to £23,000.51, divided into 
23,000,513 Ordinary Shares of 0.1 pence each by cancelling 1.9 pence on each 
Ordinary Share in issue and (iii) sub-divide its unissued share capital so that 
each unissued ordinary share of 2 pence shall be sub-divided into 20 unissued 
ordinary shares of 0.1 pence each. Following the Capital Reduction (and subject 
to any creditor protections which the Court imposes), the profit and loss 
account will be credited by the amount standing to the Share Premium Account and 
the amount by which the Ordinary Share capital is reduced.  
  
It should be noted that the Capital Reduction will not, in itself, involve any 
distribution or repayment of capital by the Company to any Shareholder or 
involve any reduction in the Company's underlying assets. The reduction in the 
nominal value of the Ordinary Shares should not of itself affect their market 
value.  
  
The sub-division of the unissued share capital of the Company is to ensure that 
the nominal value of the authorised but unissued share capital is consistent 
with that of the issued share capital.  
  
In order to obtain the approval of the Court for the Capital Reduction, it is 
likely that the Company will be required to provide security acceptable to the 
Court in respect of those creditors of the Company who do not consent to the 
cancellation of the Share Premium Account or the reduction of the Company's 
Ordinary Share capital. The Company will put into place such form of creditor 
protection as it may be advised is appropriate to obtain the confirmation of the 
Court to the Capital Reduction.  
  
It is expected that the Capital Reduction will become effective in January 2009. 
The Board reserves the right to abandon or discontinue (in whole or in part) any 
application to the Court if the Board believes that the terms required to obtain 
confirmation of the Capital Reduction are unsatisfactory to the Company.  
  
The existing share certificates which show the present nominal value of 2 pence 
per Ordinary Share will remain valid after the Capital Reduction.  
  
4.    Dividend  
  
As at 31 October 2008, the Company had approximately £1,100,000 in cash. 
However, Shareholders should note that operational and trading costs have been 
incurred by the Company since 31 October 2008, and shall continue to be incurred 
pending the proposed implementation of the investing strategy. In addition, the 
proposed cessation of the Company's trading and any creditor protections imposed 
by the Court and professional fees incurred in connection with the Capital 
Reduction will materially reduce available levels of cash and the Company's 
distributable reserves.  
  
If the Capital Reduction becomes effective (and subject to the continued 
availability of the applicable distributable reserves), the Board intends to 
effect a return of cash to Shareholders as soon as practicable by way of cash 
dividend of approximately 1 pence per Ordinary Share. Given that the amount of 
the proposed cessation and other costs described above is not fixed, there can 
be no certainty that any further dividend will be paid.  
  
Although it is not possible to say precisely when the Capital Reduction will 
become effective, it is currently expected that this will occur in January 2009 
and that the cash dividend will be paid to Shareholders in February 2009 or 
sooner. The record date and payment date for this cash dividend and the amount 
of the cash dividend will be announced through a Regulatory Information Service 
following the Capital Reduction becoming effective.  
  
5.    General Meeting  
  
A General Meeting of the Company will be held at 10.00 am on 12 December 2008. 
At the General Meeting, an ordinary resolution will be proposed to approve the 
Company's investing strategy ("resolution 1") and a special resolution will be 
proposed to approve (a) the cancellation of the Share Premium Account, (b) the 
reduction of the share capital of the Company from £460,010, divided into 
23,000,513 Ordinary Shares of 2 pence each to £23,000.51, divided into 
23,000,513 Ordinary Shares of 0.1 pence each and (c) to sub-divide the unissued 
ordinary share capital of the Company ("resolution 2").  
  
The proposed ordinary resolution will be passed if more than 50 per cent. of the 
votes are cast in favour and the proposed special resolution will be passed if 
at least 75 per cent. of the votes cast are in favour.  
  
The resolutions are proposed as separate resolutions and the passing of 
resolution 2 is conditional on the passing of resolution 1.  
  
6.    Recommendation  
  
The Directors consider the proposals described in this announcement to be in the 
best interests of the Company and of Shareholders. Accordingly, the Directors 
unanimously recommend that Shareholders vote in favour of the resolutions to be 
proposed at the General Meeting as they intend to do in respect of the 2,608,156 
Ordinary Shares in which they are beneficially interested (representing 
approximately 11.3 per cent. of the issued voting share capital of the 
Company).  
  
7. EXPECTED TIMETABLE OF KEY EVENTS  
  
Latest time for receipt of Form of Proxy for the General Meeting                 
                  10.00 am on 10 December 2008  
  
General Meeting 10.00 am on 12 December 2008  
  
Capital Reduction expected to become effective                                   
                              during January 2009  
  
Dividend expected to be paid      by end of February 2009  
  
For further information please contact:  
  
Robin Francis, Chief Executive        
  
Voller Energy Group Plc                                                          
                                    Tel: +44 (0) 1256 813 900  
  
John Depasquale/Richard Feigen  
  
Seymour Pierce                                                                   
                                        Tel +44 (0) 207 107 8000  
  
 
This information is provided by RNS  
  
The company news service from the London Stock Exchange  
  
  END  
  
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