TIDMECO
4 August 2009
FOR IMMEDIATE RELEASE
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART,
IN, INTO OR FROM AUSTRALIA, CANADA, SOUTH AFRICA OR JAPAN OR ANY
OTHER JURISDICTION IF TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OF SUCH JURISDICTION
EcoSecurities Group plc
Posting of response circular recommending that EcoSecurities
Shareholders reject the Guanabara Offer
The Board of EcoSecurities has today written to EcoSecurities
Shareholders advising them why the Board considers that the offer of
77 pence per Ordinary Share made by Guanabara Holdings B.V. on 22
July 2009 undervalues the Company and its prospects and why it
recommends that all EcoSecurities Shareholders reject the Guanabara
Offer.
The response circular posted today to EcoSecurities Shareholders sets
out the EcoSecurities Board's reasons for rejecting the Guanabara
Offer and in particular highlights that the Offer:
* Represents a discount of 14 per cent. to the current
EcoSecurities share price1
* Values EcoSecurities at only 37 pence per Ordinary Share
excluding net cash2
* Seeks to exploit the low share price
* Fails to recognise that EcoSecurities has just announced a
maiden profit before tax for the first half of 20093
* Fails to recognise significant revenue growth and increased CER
issuance levels
* Fails to recognise EcoSecurities' significant potential for
future growth as global carbon markets develop, particularly
given recent legislative developments in the United States
EcoSecurities Shareholders representing 19.9 per cent. of the issued
share capital of EcoSecurities have irrevocably undertaken to reject
the Guanabara Offer already.
The Board of EcoSecurities believes the EcoSecurities business, its
market position and the experience and industry expertise of its
people make it well prepared to meet the uncertainties and risks
highlighted by Guanabara in the Offer Document.
The Board of EcoSecurities recommends that EcoSecurities Shareholders
reject the Guanabara Offer.
Commenting on the Offer, Mark Nicholls, Chairman of EcoSecurities,
said:
"The Board considers this offer to be wholly inadequate and this is
reinforced by the Interim Results that the Company announced this
morning. The Board of EcoSecurities remains fully committed to
delivering shareholder value to all its shareholders and therefore
strongly urges shareholders to reject the Guanabara Offer."
Notes
1 Based on the closing price of the Ordinary Shares of 89.5 pence as
at 3 August 2009, being the last dealing day prior to the date of
this announcement
2 Based on the Group's net cash balance of EUR55.3 million at 30 June
2009 and the 118,181,352 Ordinary Shares in issue as at 3 August 2009
and which is equivalent to EUR0.47 per share (approximately 40 pence
per share based on the Euro/Sterling exchange rate quoted on the
Financial Times website (www.ft.com) on 3 August 2009 of 1.17450)
3 Based on the Group's reported profit before income tax of EUR1.058
million for the six months ended 30 June 2009
This announcement should be read in conjunction with, and is subject
to, the appendices to the announcement. Appendix I contains details
of the bases and sources of information contained in this
announcement. Appendix II contains definitions of certain expressions
used in this announcement and Appendix III contains the glossary of
the technical terms used in this announcement.
Enquiries
For further information please contact:
EcoSecurities Group +353 1 613 9814
plc
Bruce Usher, CEO
Adrian Fernando, COO
James Thompson, CFO
RBS Hoare Govett +44 20 7678 8000
Limited
Justin Jones / Hugo Fisher
Citigate Dewe Rogerson +44 20 7638 9571
Ged Brumby / Tom Baldock
General
EcoSecurities Shareholders should read the response circular posted
today to EcoSecurities Shareholders in full as it contains important
information relating to the Company and the views of the Board on the
Guanabara Offer.
Director's Responsibility Statements
The directors of the Company accept responsibility for the
information contained in this announcement. To the best of the
knowledge and belief of the directors of the Company (who have taken
all reasonable care to ensure that such is the case), the information
contained in this announcement is in accordance with the facts and
does not omit anything likely to affect the import of such
information.
Material Change
Other than as set out in this announcement, the Directors are not
aware of any material change in the information previously published
by the Company, or on its behalf, and in particular there has been no
material change in the information specified in Rule 27.1 of the
Takeover Rules.
Financial Advisers
RBS Hoare Govett, which is authorised and regulated in the United
Kingdom by the Financial Services Authority, is acting exclusively
for EcoSecurities and no one else in connection with this matter and
will not be responsible to anyone other than EcoSecurities for
providing the protections afforded to clients of RBS Hoare Govett nor
for providing advice in relation to this matter, the content of this
announcement or any matter referred to herein.
Overseas Shareholders
The release, publication or distribution of this announcement in
certain jurisdictions may be restricted by law and therefore any
persons who are subject to the laws and regulations of any
jurisdiction other than Ireland or the UK or EcoSecurities
Shareholders who are not resident in Ireland or the UK should inform
themselves about, and observe, any such restrictions. Any failure to
comply with these restrictions may constitute a violation of the
securities laws of any such jurisdiction. This announcement does not
constitute or form part of any offer to sell, or the solicitation of
an offer to buy or subscribe for, shares in the Company to any person
in any jurisdiction.
Rule 8.3 - Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the Takeover Rules, if any person
(other than a "recognised intermediary") is or becomes "interested"
(directly or indirectly) in 1 per cent. or more of any class of
"relevant securities" of the Company, all "dealings" in any "relevant
securities" of the Company (including by means of an option in
respect of, or a derivative referenced to, any such class of
"relevant securities") must be publicly disclosed in accordance with
Rule 2.9 of the Takeover Rules, including the details set out in Rule
8.6 of the Takeover Rules, by no later than 3.30pm (London time) on
the London business day following the date of the relevant
transaction. This requirement will continue until the date on which
the offer becomes, or is declared, unconditional as to acceptances,
lapses or is otherwise withdrawn or on which the "offer period"
otherwise ends. If two or more persons "act in concert", to acquire
an "interest" in "relevant securities" of the Company, they will be
deemed to be a single person for the purpose of Rule 8.3.
Under the provisions of Rule 8.1 of the Takeover Rules, all
"dealings" in "relevant securities" of the Company by the offeror or
the Company, or by any of their respective "associates", must be
disclosed by no later than 12.00 noon (London) on the London 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, can be found on
the Irish Takeover Panel's website at www.irishtakeoverpanel.ie. The
Irish Takeover Panel also provides an appropriate form for any
disclosures under Takeover Rules 8.1 or 8.3.
'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 Takeover Rules, which can
also be found on the Irish Takeover Panel's website. If you are in
any doubt as to whether or not you are required to make a disclosure
under Rule 8, you should consult the Irish Takeover Panel.
Profit Forecast
The Interim Results constitute a profit estimate for the purposes of
Rule 28.6 of the Takeover Rules (the "profit estimate") and have been
reported on by KPMG and RBS Hoare Govett (the Company's financial
adviser in relation to the Offer) in accordance with Rule 28.3(a) of
the Takeover Rules. The full text of the reports from KPMG and RBS
Hoare Govett is set out in the Company's announcement in respect of
the Interim Results which was made earlier today and will be included
in the response circular posted today to EcoSecurities Shareholders.
The directors of the Company confirm that the profit estimate remains
valid and that KPMG and RBS Hoare Govett have indicated that they
have no objection to their reports continuing to apply.
The following information is the text of the 'Letter from the
Chairman' contained in Part 1 of the response circular posted today
to EcoSecurities Shareholders. Copies of the response circular may be
obtained upon request from the Company Secretary, EcoSecurities Group
Plc, 40 Dawson Street, Dublin 2, Ireland and will also be available
for download from www.ecosecurities.com. References to 'this
document' therefore refer to the response circular posted today to
EcoSecurities Shareholders.
"Dear Company Shareholder
REJECT THE GUANABARA OFFER OF 77 PENCE
Introduction
This letter sets out the reasons why the Board, which has been so
advised by RBS Hoare Govett, considers that the Guanabara Offer
undervalues the Company and its prospects and why it recommends that
all Company Shareholders reject the Guanabara Offer.
Background
On 5 June 2009, Guanabara announced that it was considering making an
offer for the entire issued and to be issued share capital of the
Company at a price of 60 pence per Ordinary Share.
Subsequently, on 8 June 2009, EDF Trading announced that it was also
considering making a cash offer for the entire issued and to be
issued share capital of the Company at a price of at least 75 pence
per Ordinary Share with the ultimate level of any offer dependent on
the satisfactory completion of due diligence.
The Board rejected both unsolicited approaches as being wholly
inadequate and noted that it had recently received and rejected an
indicative conditional proposal of 96 pence per Ordinary Share in
cash from EDF Trading.
Following their announcement on 8 June 2009, representatives of the
Board held discussions with EDF Trading regarding their interest in
the Company. No proposal from EDF Trading was forthcoming from these
discussions. On 16 July 2009, EDF Trading announced that it did not
intend to progress its possible offer for the Company and had entered
into a conditional purchase agreement with Guanabara to purchase part
of the Group's portfolio in the event that Guanabara completed a
successful offer for the Company.
Later on 16 July 2009, Guanabara announced its intention to make a
cash offer of 77 pence per Ordinary Share for the entire issued and
to be issued share capital of the Company. As with the previous
unsolicited indicative offer by EDF Trading around this level, the
Board rejected the Guanabara Offer as being wholly inadequate and
noted that neither the Company nor its advisers had had any contact
with Guanabara or its advisers.
On 21 July 2009, Tricorona AB (publ) announced it was reviewing the
situation regarding the possibility of making an offer for the
Company.
On 22 July 2009, Guanabara dispatched to you a document containing
the Guanabara Offer.
Recent trading and prospects
Today, the Company announced its interim results for the six months
ended 30 June 2009. These results reported continuing improved
financial and operating results for the Group including:
* Significantly improved financial performance underpinned by a
successful forward sales strategy and management action on
costs.
* Increase in consolidated revenue to EUR60.0 million for the first
half of 2009, an increase of 348 per cent. over the same period
last year.
* Net revenue, including other income, of EUR11.6 million for the
first half of 2009 (EUR4.8 million for the first half of 2008).
* Profit before income tax for the first half of 2009 of EUR1.1
million (EUR10.0 million loss for the first half of 2008).
* Issuance from the Group's portfolio was 820,000 CERs net to
EcoSecurities during the first half of 2009 (595,000 CERs for
the first half of 2008).
* On a net basis to EcoSecurities at 30 June 2009, the pre-2012
CER portfolio's 158 registered projects were capable of
producing 40 million CERs (127 projects and 35 million CERs at
31 December 2008), representing 40 per cent. (34 per cent. at 31
December 2008) of the Group's portfolio.
* Control of administrative expenses has remained tight and
expenditure for the first half of 2009 of EUR11.3 million was 24
per cent. lower than the same period last year.
* The policy of forward sales has resulted in contracted future
revenues of EUR380.6 million at 30 June 2009 with an associated
Net Trading Margin of EUR163.1 million.
* The weighted average sale price of the forward sales was EUR13.80
per CER and the weighted average acquisition price of the
pre-2012 CER portfolio was EUR8.02 per CER at 30 June 2009.
* EcoSecurities continues to retain a strong consolidated net cash
position which amounted to EUR55.3 million at 30 June 2009.
* CER issuances currently anticipated for 2009 remain in line with
the Board's expectations.
In the Interim Results, I commented as follows:
"I am very pleased to report that for the six months ended 30 June
2009, EcoSecurities achieved its first period of profitability. With
EcoSecurities' visibility of revenues provided by the forward sales
contracts, its reduced cost base and strong balance sheet, the Group
is well positioned not only to progress successfully during the
current period of low CER prices and worldwide economic downturn but
also to take advantage of the potential recovery of CER prices in the
latter part of the first commitment period of the Kyoto Protocol. The
Board of EcoSecurities remains fully committed to delivering
shareholder value to all its shareholders."
The Board considers that the Interim Results for the six months ended
30 June 2009 build on the strong financial and operational progress
achieved by the Group, despite the effects of the economic recession
and continuing uncertainties around policies affecting the carbon
markets.
The full text of the Interim Results is set out in Part 2 of this
document, together with the reports issued in respect thereof by KPMG
and RBS Hoare Govett pursuant to the Takeover Rules. Shareholders are
urged to read the whole of Part 2 of this document.
Why the Guanabara Offer undervalues the Company and should be
rejected
The Board is focused on delivering shareholder value. For the reasons
set out below, the Board considers that the Guanabara Offer not only
undervalues the Company but fails to recognise the value of the
Company's current portfolio together with the strong recent progress
being made by the business and its potential. Accordingly, the Board
recommends that all Company Shareholders reject the Guanabara Offer.
Inadequate offer price
The Board considers that the Guanabara Offer is opportunistic as to
its timing and seeks to exploit the low price of the Ordinary Shares
prior to Guanabara's unsolicited announcement on 5 June 2009.
The Board believes neither the Company's share price immediately
prior to the above announcement nor the Guanabara Offer of 77 pence
per Ordinary Share properly reflect the value of the current
EcoSecurities business, including its large and diversified
portfolio, established operating platform, leading reputation in the
global carbon markets and its future prospects as global carbon
markets develop in the coming years.
In holding this view of the underlying value in the Company, the
Board is pleased to note that research coverage published since the
beginning of the Offer Period supports the view that the Guanabara
Offer fails to recognise the value of the Company's business and its
future prospects.
The Board notes that at the close of business on 3 August 2009, being
the last dealing day prior to the date of this document, the
Guanabara Offer of 77 pence represented a discount of 14 per cent. to
the Closing Price of 89.5 pence.
Moreover, the Guanabara Offer represents only a 37 pence premium to
the Group's net cash balance per Ordinary Share at 30 June 2009,
based upon the Group's net cash balance of EUR55.3 million at that date
as announced today in the Interim Results.
The Guanabara Offer of 77 pence is opportunistic, wholly inadequate
and fails to recognise the value of the current EcoSecurities
business and its future prospects.
Failure to recognise the Group's strong recent progress
In setting out its reasons for making the Guanabara Offer, Guanabara
notes "a time of great market volatility and economic uncertainty,
particularly in the carbon markets", declining CER prices and the
"combined effects of the economic recession, a general decline in
stock markets, and continuing uncertainties around the policies
affecting carbon markets".
The Board recognises the difficult trading conditions arising from
the economic recession, together with the regulatory issues and
delays that have adversely affected the carbon markets, and believes
that these have adversely impacted the share price of the Company.
However, the Board also believes the Group's business, its market
position and the experience and industry expertise of its people make
it well prepared to meet these current challenges and is encouraged
in this view by the recent strong progress in growing the business.
As highlighted above, in the paragraph entitled "Recent trading and
prospects", the Group has delivered in the first six months of 2009:
* Its first reported period of profitability;
* Significant consolidated revenue and net revenue growth;
* Increased issuance levels of CERs;
* Growth in registered projects; and
* A strong net cash position of EUR55.3 million at 30 June 2009,
representing 40 pence per Ordinary Share.
The Board is focused on delivering shareholder value and it believes
the Interim Results demonstrate progress in this regard and that the
business is well positioned for the future. This is not recognised by
the Guanabara Offer and so it should be rejected.
EcoSecurities' significant potential for future growth
The Board believes that there are significant potential growth areas
for EcoSecurities arising from:
* In December 2009, the parties to the UNFCCC plan to meet to
advance a new international agreement to replace the Kyoto
Protocol when it expires in 2012. EcoSecurities' CER portfolio
post-2012 amounted to 125 million CERs at 30 June 2009 of which
95 per cent. did not have fixed price obligations. In
expectation that a new international framework will generate
demand for project based offsets, the Board expects
EcoSecurities' post-2012 CER portfolio will deliver further
value.
* The impact of the American Clean Energy and Security Act
(otherwise known as the Waxman Markey Bill) which was approved
by the US House of Representatives on 26 June 2009. Since the US
did not ratify the Kyoto Protocol, this is a significant step
forward for the establishment of a cap and trade scheme for
greenhouse gases in the US and, subject to its passage through
the Senate, this would allow up to 2 billion tonnes of CO2e
offset credits per year of which up to 1.5 billion tonnes CO2e
per annum may be from international offset projects. This
compares with the CDM market size of 1.6 billion tonnes CO2e
expected from registered CDM projects to the end of 2012.
* The Group's network of 29 offices in 26 countries, including its
presence in the US for more than a decade. This provides a
platform from which, in the Board's opinion, EcoSecurities will
be well placed to take advantage of growth opportunities in the
carbon sector arising out of the developing policy framework.
Delisting would damage EcoSecurities' profile
At the time of its admission to trading on AIM, the Board believed
that the admission would raise the public profile of the Company and
so increase its credibility with global customers, suppliers,
partners and project developers.
Some four years on, the Board still retains that view and considers
the intention of Guanabara to de-list the Company to be potentially
damaging to the profile of the Company in its markets.
For these reasons, the Board recommends that all Company Shareholders
reject the Guanabara Offer.
Guanabara's future strategy for the Company
The Offer Document highlights the risks and uncertainties Guanabara
believes the Company is facing. However, save for converting the
Company to a private company and ceasing to trade on AIM, Guanabara
provides no clear insight as to how it would manage these risks or
uncertainties. Given that Guanabara does not currently have a
business in the carbon markets and has stated that it does not intend
to significantly change the business of the Company or the location
of the Company's business, the Board considers it difficult to judge
how Guanabara will develop the Company's business. However, the Board
recognises Guanabara's statement that, "Since its creation in 1997,
the Company has continuously evolved to adapt to changes in the
carbon market" and the Board believes this is, and will continue to
be, the case where EcoSecurities remains a public company.
The Board welcomes the confirmation by Guanabara that it will
safeguard the existing statutory employment rights of management and
employees of the Group should it complete its offer. However, the
Board also notes that Guanabara cannot rule out rationalisation and
other appropriate measures, including possible redundancies, should
Guanabara consider it necessary.
Strong management team and industry expertise
The Group has an experienced management team and a depth of industry
expertise that will enable it to build on the recent operational and
financial progress.
On 11 February 2009, Bruce Usher, Chief Executive Officer, announced
his intention to step down as Chief Executive Officer when a suitable
successor has been appointed. Mr Usher, who is stepping down to
pursue personal interests, remains fully committed to the Company and
intends to continue to sit on the Board as a non-executive director
of the Company after he has stepped down. The Board is actively
engaged in the search for a new Chief Executive Officer and Mr Usher
will continue in his current role until the appropriate candidate is
appointed.
Irrevocable undertakings to reject the Guanabara Offer
The Company has received irrevocable undertakings already from the
following Company Shareholders to reject the Guanabara Offer:
* Mark Nicholls, Chairman of the Company, in respect of 20,000
Ordinary Shares, representing approximately 0.02 per cent. of
the issued share capital of the Company.
* Thomas Byrne, a Non-executive Director of the Company, in
respect of 20,000 Ordinary Shares, representing approximately
0.02 per cent. of the issued share capital of the Company.
* Bruce Usher, Chief Executive Officer of the Company, in respect
of 3,356,000 Ordinary Shares, representing approximately 2.84
per cent. of the issued share capital of the Company.
* Adrian Fernando, Chief Operating Officer of the Company, in
respect of 100,000 Ordinary Shares, representing approximately
0.08 per cent. of the issued share capital of the Company.
* Marc Stuart, director of new business development and a founder
of the Company, in respect of 10,122,000 Ordinary Shares held by
the Stuart Family Trust (of which Mr Stuart is a trustee),
representing approximately 8.56 per cent. of the issued share
capital of the Company.
* Credit Suisse International, in respect of 9,918,621 Ordinary
Shares, representing approximately 8.39 per cent. of the issued
share capital of the Company.
In aggregate, Company Shareholders holding 23,536,621 Ordinary
Shares, representing 19.91 per cent. of the issued share capital of
the Company, have irrevocably undertaken to reject the Guanabara
Offer already.
Particulars of these irrevocable undertakings are set out in
paragraph 2.8 of Appendix I to this document.
Additional information
Your intention is drawn to the additional information contained in
Appendices I, II, III and IV of this document.
Action to be taken
* Company Shareholders are strongly urged to reject the Guanabara
Offer.
* The way to reject the Guanabara Offer is to take no action.
* Do not sign any document or form which Guanabara or its advisers
have sent you.
Recommendation
The Board, which has been so advised by RBS Hoare Govett, its
financial advisers, unanimously recommends that Company Shareholders
reject the Guanabara Offer and take no action in respect of their
shareholdings. In providing advice to the Board, RBS Hoare Govett has
taken into account the commercial assessment of the Board.
The Directors will not be accepting the Guanabara Offer in respect of
their own shareholdings of Ordinary Shares which comprise 3,496,000
Ordinary Shares, representing 2.96 per cent. of the issued share
capital of the Company.
Yours faithfully,
Mark Nicholls
Chairman"
Appendix I: Presentation of Information, Bases and Sources
A. FORWARD-LOOKING STATEMENTS
This announcement contains statements that are or may be
"forward-looking" with respect to the financial condition, results or
operations and business of the Company. In some cases, these
forward-looking statements can be identified by the use of
forward-looking terminology, including the terms "believes",
"estimates", "forecasts", "plans", "prepares", "anticipates",
"expects", "intends", "may", "will" or "should" or, in each case,
their negative or variations or comparable terminology. Such
forward-looking statements involve known and unknown risks,
uncertainties and other factors, which may cause the actual results,
performance or achievements of the Company, or the industry in which
is operates, to be materially different from any future results,
performance or achievements expressed or implied by such
forward-looking statements.
B. PRESENTATION OF FINANCIAL AND OPERATING INFORMATION
Unless otherwise stated, the financial information concerning the
Company has been extracted from internal financial and management
information, the published annual reports and accounts of the Company
for the relevant periods, the Interim Results and other information
made publicly available by the Company. Financial information is
reported under Irish GAAP unless otherwise stated.
C. THIRD PARTY SOURCES
The Company confirms that the information in this announcement
obtained from third party sources has been correctly and fairly
reproduced. So far as the Company is aware and has been able to
ascertain from information published by such third parties, no facts
have been omitted which would render the reproduced information
inaccurate or misleading.
The Company does not have access to the facts and assumptions
underlying the data extracted from publicly available sources. As a
result, the Company is unable to verify such.
D. SOURCES AND BASES
Unless otherwise stated, information regarding Guanabara's Offer is
sourced from the Offer Document and other material made publicly
available by Guanabara or any other person mentioned in the Offer
Document.
E. REFERENCES
The relevant bases of calculation and source of information are
provided below in the order in which the relevant information appears
in this announcement. Where financial or operating information is
based on the underlying sources and bases described in paragraph B,
the underlying sources and bases are not repeated again. Where
information is repeated in this announcement, the underlying bases
and sources are generally cited once and not repeated again.
The reference to the current Company share price is based on the
closing price of the Ordinary Shares of 89.5 pence as at 3 August
2009, being the last dealing day prior to the date of this
announcement.
The reference to the Guanbara Offer valuing the Company at 37 pence
per Ordinary Share excluding net cash is based on the Group's net
cash balance of EUR55,300,000 at 30 June 2009 as recorded in the
Interim Results and 118,181,352 Ordinary Shares in issue as at the
Latest Practicable Date, which is equivalent to EUR0.47 per share
(approximately 40 pence per share based on the Euro/Sterling exchange
rate quoted on the Financial Times website (www.ft.com) on 3 August
2009 of 1.17450). The offer price of 77 pence per Ordinary Share less
40 pence equals 37 pence per Ordinary Share.
The reference to the low share price is based on the discrepancy
between the average share price of the
Company since its admission to trading on AIM, being 160.4 pence, and
the share price immediately prior to commencement of the Offer
Period, being 45.5 pence.
The references to the profit before tax in the first half of 2009,
significant revenue growth and increased CER issuance levels are
based on the Interim Results.
The reference to the recent legislative developments in the United
States is based on the approval by the US House of Representatives of
the American Clean Energy and Security Act on 26 June 2009.
The reference to Company Shareholders representing 19.91 per cent. of
the issued share capital having
undertaken to reject the Guanabara Offer is based on the irrevocable
undertakings received by the Company from such Company Shareholders.
The reference to the Company's market position is based on the
independent market research report by
Verdantix of December 2008 and the industry awards referred to below.
The reference to the experience and industry expertise of the
Company's people is based on internal management information.
The reference to Guanabara announcing that it was considering making
an offer for the entire issued share capital of the Company at a
price of 60 pence per Ordinary Share is sourced from the announcement
made by Guanabara on 5 June 2009 entitled 'Guanabara - Rule 2.4
Announcement'.
The reference to EDF Trading announcing that it was also considering
making a cash offer for the entire issued share capital of the
Company at a price of at least 75 pence per Ordinary Share is sourced
from the announcement made by EDF Trading on 8 June 2009 entitled
'EDF Trading - Rule 2.4 Announcement'.
The reference to the Board rejecting both unsolicited approaches as
being wholly inadequate and noting that the Board had recently
received and rejected an indicative conditional proposal of 96 pence
per Ordinary Share in cash from EDF Trading is sourced from the
announcements made by EcoSecurities on 5 June 2009 entitled
'EcoSecurities Response to Possible Offer made by EDF Trading' and on
8 June 2009 entitled 'EcoSecurities Response to Possible Offer made
by Guanabara'.
The reference to EDF Trading announcing that it did not intend to
progress its possible offer and had entered into a conditional
purchase agreement with Guanabara is sourced from the announcements
made by EDF Trading on 16 July 2009 entitled 'EDF Trading - Statement
Re Possible Offer for EcoSecurities' and 'EDF Trading - Portfolio
Purchase Agreement with Guanabara in relation to EcoSecurities'.
The reference to the Board rejecting the Guanabara Offer is sourced
from the announcement made by
EcoSecurities on 16 July 2009 entitled 'EcoSecurities - Intended
Offer From Guanabara, Withdrawal of Possible Offer from EDF and
Portfolio Purchase Agreement'.
The reference to Tricorona AB reviewing the situation regarding the
possibility of making an offer for the
Company is sourced from the announcement made by Tricorona AB on 21
July 2009 entitled 'Tricorona -
Possible Offer for EcoSecurities'.
The financial information and the quotation from Mark Nicholls
contained in the "Recent trading and prospects" section are based on
and sourced from the Interim Results.
The reference to the strong financial and operational progress
achieved by the Group is based on the Interim Results and the
Company's Annual Report and Accounts 2008.
The reference to the value of the Group's current portfolio is based
on the Company's internal portfolio
information, the Interim Results, its forward sales position and the
Director's view of potential future Carbon Credit prices.
The references to the Guanabara Offer being opportunistic as to its
timing and seeking to exploit the low share price are based on the
discrepancy between the average share price of the Company since its
admission to trading on AIM, being 160.4 pence, and the share price
immediately prior to commencement of the Offer Period, being 45.5
pence.
The reference to the Company's large and diversified portfolio is
based on the Company's internal portfolio information, the Interim
Results and the Company's Annual Report and Accounts 2008.
The reference to the Company's leading reputation in the global
carbon markets and its market position are based on the number of
industry awards that the Company has obtained in recent years and
market research reports, including:
(a) 'Environmental Finances' award for 'Best CDM/JI Project Developer
2008' for the second year in a row
alongside the award for 'Best Voluntary Market Project Developer';
(b) New Carbon Finance award for 'Top Carbon Off-taker by Number of
Deals' in 2008; and
(c) Verdantix, identifying the Company in their 'Helping you Change
with the Climate' research report of December 2008 identifying the
Company as one of the 4 leading firms in the carbon market in their
Green Quadrant 'Analysis of CDM Project Developers'.
The reference to research coverage published since the beginning of
the Offer Period is based on the following:
(a) a report from KBC Peel Hunt entitled 'Morning Note -
EcoSecurities - Buy' dated 17 July 2009; and
(b) a report from Mirabaud entitled 'EcoSecurities Clean Technology -
Any More Bids? Mark II' dated 17 July 2009; and
(c) a research report from Matrix Corporate Capital entitled 'New
Energy - Two Steps Forward..' dated 23 June 2009.
The reference to Guanabara's reasons for making the offer and the
quotations used are sourced from the Offer Document.
The reference to the regulatory issues and delays that have adversely
affected the carbon markets is based on the report of the UNFCCC
entitled "Call for Inputs on Efficiency in the Operation of the CDM
and Opportunities for Improvement" available at:
http://cdm.unfccc.int/public-inputs/2009/cdmimprov/index.html.
The reference to the Group's strong progress in growing the business
is based on the Interim Results and the Company's Annual Report and
Accounts 2008.
The reference to the Group having delivered significant consolidated
revenue and net revenue growth, increased issuance levels of CERs,
growth in registered projects and CER production and a strong net
cash position of EUR55.3 million at 30 June 2009 is based on and
sourced from the Interim Results.
The reference to the Company's CER portfolio post-2012 amounting to
125 million CERs at 30 June 2009 of which 95 per cent. did not have
fixed price obligations is sourced from internal management and
financial data.
The reference to a cap and trade scheme for greenhouse gases in the
US that would allow up to 2 billion tonnes of offset credits per
year, of which up to 1.5 billion tonnes of CO2e per annum may be from
international offset projects, is based on the American Clean Energy
and Security Act (H.R. 2454) approved by the US House of
Representatives on 26 June 2009.
The reference to the CDM market size of 1.6 billion tonnes CO2
expected from registered CDM projects to the end of 2012 is based on
data from the UNFCCC website, sourced at
http://cdm.unfccc.int/Statistics/index.html;
The plan for the UNFCCC parties to meet in December 2009 is sourced
from the information about the COP15 meetings to be held in
Copenhagen contained in the following websites: http://en.cop15.dk/;
and http://unfccc.int/2860.php.
The reference to the Board's belief at the time of the Company's AIM
admission is sourced from the Company's AIM admission document dated
14 December 2005.
The reference to Guanabara's intention to delist the Company is
sourced from the Offer Document.
The references to Guanabara in the paragraph headed 'Guanabara's
future strategy for the Company' are all based on information
provided in the Offer Document.
Appendix II: Definitions:
"AIM" means the AIM market of the London Stock Exchange plc;
"Associate" means any person who is an associate of the Company by
virtue of any of paragraphs (a) to (l) of the definition of
"Associate" in Rule 2.2 of the Takeover Rules;
"Board" means the board of directors of the Company from time to
time;
"Company" or "EcoSecurities" means EcoSecurities Group Plc;
"Company Shareholders" or "EcoSecurities Shareholders" means the
registered holders of Ordinary Shares;
"Directors" means the directors of the Company from time to time;
"EDF Trading" means EDF Trading Limited, a wholly owned subsidiary
of Électricité de France S.A.;
"Group" means the Company and any subsidiary of the Company and a
"Group Company" means any one of them;
"Guanabara" means Guanabara Holdings B.V.;
"Guanabara Offer" or the "Offer" means the offer made by Guanabara in
the Offer Document;
"Interim Results" means the unaudited interim results of the Company
and its subsidiaries for the six month period ended 30 June 2009 as
set out in Part 2 of the response circular posted today to
EcoSecurities Shareholders;
"Irish GAAP" means the generally accepted accounting principles in
Ireland;
"Latest Practicable Date" means 3 August 2009 (being the last
practicable date before the publication of the response circular
posted today to EcoSecurities Shareholders);
"Offer Document" means the offer document issued by Guanabara on 22
July 2009;
"Offer Period" means the period commencing on 5 June 2009;
"Ordinary Shares" means ordinary shares of EUR0.0025 each in the share
capital of the Company, each an "Ordinary Share";
"RBS Hoare Govett" means RBS Hoare Govett Limited;
"Takeover Rules" means the Irish Takeover Panel Act, 1997, Takeover
Rules 2007 and 2008 available at www.irishtakeoverpanel.ie; and
"US" or "United States" means the United States of America.
Appendix III: Glossary of technical terms
"Carbon Credits" means greenhouse gas Emission Reduction benefits
arising from project-level activities;
"CDM" means Clean Development Mechanism, being the provision of the
Kyoto Protocol that governs project level carbon credit transactions
between developed and developing countries;
"CER" means Certified Emission Reduction, being carbon credits
created by CDM projects. 1 CER corresponds to 1 tonne of CO2e
Emission Reductions;
"CMIA" means the Carbon Market Investors Association - an
international trade association representing businesses working to
reduce carbon emissions through the market mechanisms of the UNFCCC
and the Kyoto Protocol;
"CO2e" means carbon dioxide equivalent and the unit used in the Kyoto
Protocol;
"Emission Reductions" means units ascribed to the reduction of
greenhouse gas related emissions;
"GHG" means greenhouse gases, such as CO2 that trap heat in the
atmosphere;
"Gross" means in respect of contracted and portfolio acquisitions of
Emission Reductions, the total project volumes without adjustment for
EcoSecurities' share of Emission Reductions from individual
contracts;
"IETA" means the International Emissions Trading Association - an
international trade association involved in the development of an
active, global greenhouse gas market and the creation of systems and
instruments to ensure effective business participation;
"JI" means Joint Implementation, the provision of the Kyoto Protocol
that governs project-level carbon credit transactions between
entities located in Annex 1 countries;
"Kyoto Protocol" means the international agreement under which
industrialised countries commit to reduce GHG emissions;
"Net" means in respect of contracted and portfolio acquisitions of
Emission Reductions, adjusted for EcoSecurities' share of Emission
Reductions from individual contracts;
"Net Trading Margin" means the net spread on principal arrangements,
net agency fees (after commission to third parties) and project
development margins, and excludes other direct cost inputs and fixed
cost allocations;
"Portfolio" means rights to buy or receive Carbon Credits from
Emission Reduction projects that are capable of producing up to a
stated level of Carbon Credits;
"tCO2e" means tonnes of carbon dioxide equivalent, units for carbon
dioxide equivalent calculations;
"UNFCCC" means the United Nations Framework Convention on Climate
Change, signed in 1992; and
"VER" means Verified Emission Reduction, being carbon credits created
through voluntary emission reduction projects. One VER corresponds to
1 tonne of CO2e Emission Reductions.
- ENDS -
=--END OF MESSAGE---
This announcement was originally distributed by Hugin. The issuer is
solely responsible for the content of this announcement.
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