Response to Interim Results of EcoSecurities plc
12 Agosto 2009 - 3:03PM
UK Regulatory
TIDMECO
RNS Number : 3337X
Guanabara Holdings B.V.
12 August 2009
Guanabara Holdings B.V.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO OR
FROM AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO
DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION
FOR IMMEDIATE RELEASE
Guanabara Holdings B.V. Cash Offer for EcoSecurities Group plc
Guanabara Holdings B.V. ("Guanabara") response to unaudited Interim Results of
EcoSecurities Group plc ("EcoSecurities" or "the Company") and Response Circular
Guanabara notes the unaudited Interim Results for the six months ended 30 June
2009 ("Interim Results") announced by EcoSecurities on 4 August 2009 and the
response circular dated 4 August 2009 in response to Guanabara's Offer.
Following careful analysis, Guanabara believes that the Interim Results serve to
endorse its view that Guanabara's Cash Offer of 77 pence per share represents
fair value for the Company. The main reasons for this conclusion are set out
below.
+-----+-----------------------------------------------------------------------+
| (1) | EcoSecurities reported another reduction in its contracted portfolio, |
| | following a reduction in 2008: |
| | |
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| | |
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| (a) | the total contracted net amount of pre-2012 CERs reduced by circa 20 |
| | million tonnes to 124 million tonnes as at 30 June 2009; and |
| | |
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| | |
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| (b) | there was a significant reduction in the growth rate of expected CER |
| | volumes from registered projects. From 31 December 2007 to 31 |
| | December 2008, there was an increase of 169% (from 13 million tonnes |
| | to 35 million tonnes) but, from 31 December 2008 to 30 June 2009, the |
| | increase was 14% (from 35 million tonnes to 40 million tonnes). |
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| (2) | The announced EUR1.06m profit before tax was predominantly derived from |
| | financial activities as opposed to operational results as it included |
| | net finance income of EUR0.72m. The Company achieved an operating |
| | profit of only EUR0.34m on sales of EUR60.0m. Sales were derived mainly |
| | from: |
| | |
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| | |
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| (a) | the acceleration of deliveries of forward sales above the previously |
| | planned level; |
| | |
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| | |
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| (b) | substantial trading activity, whereby the Company sold 4,274,000 |
| | CERs, 3,712,000 of which had been bought in the secondary market; and |
| | |
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| | |
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| (c) | a significant reduction in the Company's inventory of CERs, from |
| | 1,710,000 CERs as at 31 December 2008 to just 263,000 as at 30 June |
| | 2009. |
+-----+-----------------------------------------------------------------------+
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| (3) | Guanabara expects EcoSecurities' cash holdings to decrease in the |
| | short term as it funds the future development of carbon credits and |
| | as delays in registration, financing and construction continue to |
| | affect CER issuance. This is likely to be exacerbated by the |
| | reduction of the Company's CER inventory. |
| | |
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| | |
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| (4) | EcoSecurities has not provided any guidance as to profitability in |
| | the full financial year and beyond. |
+-----+-----------------------------------------------------------------------+
Guanabara believes that continuing uncertainties in the global economy in
general and the carbon markets in particular create an environment in which the
future financial performance of EcoSecurities is likely to fluctuate
significantly.
Guanabara believes further that the performance of all carbon companies will
continue to be adversely affected by complicated regulation and administrative
delays, as evidenced by Unep Risoe's recent reduction of the amount of CERs it
expects to be generated by the end of 2012, because of increasing delays in the
issuance of credits from projects that have been approved by the UN.
EcoSecurities' stock-exchange listed peers have recently reported write-downs in
their contracted portfolios. Tricorona AB reported (23 July 2009) a reduction in
its portfolio of carbon credits for delivery in the EU's second trading period
2008-2012 from circa 64 million tonnes to circa 55 million tonnes between 31
December 2008 and 30 June 2009. Camco International Limited announced (6 August
2009) a reduction in its risk adjusted contracted portfolio of JI and CDM
projects from circa 94 million tonnes to circa 85 million tonnes between 31
March 2009 and 30 June 2009. Trading Emissions plc reported (11 August 2009) a
reduction in its risk adjusted pre-2012 CER portfolio from circa 47 million
tonnes to circa 43 million tonnes between 27 March 2009 and 11 August 2009.
The nature and scope of the carbon regulatory framework for the period following
2012 is as yet unknown. Recent press coverage from sources including Point
Carbon, has highlighted that any agreement on the post-Kyoto period continues to
be highly dependent on the political willingness of some of the world's largest
countries and there continue to be many points which still require agreement. In
particular, whilst there have been some developments in relation to potential
new climate change regulations in the United States, there can be no certainty
that a new regime will be agreed in the foreseeable future or that whatever
regime does ultimately emerge will allow EcoSecurities to become active in the
US market.
Guanabara's Offer is in cash and is the only offer currently available to
EcoSecurities shareholders. In the event that Guanabara's Offer were to lapse
and there was no alternative offer, the EcoSecurities share price would depend
on the Company's trading performance and might not be maintained.
Guanabara would also like to highlight that all the parties which have given
irrevocable undertakings not to accept Guanabara's Offer are connected in some
way with the Company and its current management, either as directors, employees
or, in the case of Credit Suisse International, have board representation. No
independent shareholders have given any such undertakings.
The Offer price of 77 pence per share represents a substantial premium of
approximately 141 per cent to 32 pence, the Volume Weighted Average Trading
Price of an EcoSecurities Share over the six month period up to 5 June 2009, and
a premium of approximately 69 per cent to the Closing Price of 45.5 pence per
EcoSecurities' share on 4 June 2009, the last Business Day prior to the date of
the announcement by Guanabara that it was considering an offer for
EcoSecurities.
The Cash Offer represents an opportunity for EcoSecurities' Shareholders to
monetise their investment in EcoSecurities shares at a time of great market
volatility and economic uncertainty, particularly in the carbon markets.
The first closing date of Guanabara's Offer is 11 a.m. on 20 August 2009.
Commenting on EcoSecurities' Interim Results and response circular, Pedro Moura
Costa, Guanabara's chairman, said:
"EcoSecurities' results illustrate the difficulties this company faces and why
it needs a change of strategy. An operating profit of only EUR341,000 on
significant sales volumes and after years of investment should give shareholders
cause for concern. Our Offer represents the only certainty for shareholders at a
time when both EcoSecurities and the carbon markets face significant
uncertainty."
+------------+--------------+
| Enquiries: | |
+------------+--------------+
| Guanabara | |
| B.V. | |
+------------+--------------+
| Dr Pedro | Tel: +44 |
| Moura | 77 1116 1149 |
| Costa | |
+------------+--------------+
| Dresdner | |
| Kleinwort | |
| Limited: | |
| Financial | |
| Adviser | |
| to | |
| Guanabara | |
+------------+--------------+
| Marc | Tel: +44 |
| Monasch | 207 475 5385 |
+------------+--------------+
| Noble & | |
| Company: | Tel: +44 |
| Corporate | 207 763 2314 |
| Broker to | |
| Guanabara | |
| Peter | |
| Tracey | |
+------------+--------------+
| James | Tel: +44 |
| Staveley | 207 763 2317 |
+------------+--------------+
| Maitland: | |
| PR | |
| adviser | |
| to | |
| Guanabara | |
+------------+--------------+
| Neil | Tel: +44 |
| Bennett | 207 379 5151 |
+------------+--------------+
| Rowan | Tel: +44 |
| Brown | 207 379 5151 |
+------------+--------------+
Dresdner Kleinwort Limited, which is authorised by the Financial Services
Authority, is acting as sole financial adviser to Guanabara and no one else in
connection with the Cash Offer and will not be responsible to anyone other than
Guanabara for providing the protections afforded to clients of Dresdner
Kleinwort Limited, or for affording advice in relation to the transaction or any
other matter referred to herein.
Noble & Company, which is authorised and regulated by the Financial Services
Authority, is acting as corporate broker to Guanabara and no one else in
connection with the Cash Offer and will not be responsible to anyone other than
Guanabara for providing the protections afforded to clients of Noble & Company
or for affording advice in relation to the transaction or any other matter
referred to herein.
Terms defined in the Offer Document issued on 22 July 2009 have the same meaning
in this announcement unless otherwise stated.
The availability of the Cash Offer to persons outside Ireland may be affected by
the laws of the relevant jurisdiction. Such persons should inform themselves
about and observe any applicable requirements. The Cash Offer will not be made,
directly or indirectly, in or into Australia, Canada, Japan, South Africa or any
other jurisdiction where it would be unlawful to do so, or by use of the mails,
or by any means or instrumentality (including, without limitation,
telephonically or electronically) of interstate or foreign commerce, or by any
facility of a national securities exchange of any jurisdiction where it would be
unlawful to do so, and the Cash Offer will not be capable of acceptance by any
such means, instrumentality or facility from or within Australia, Canada, Japan,
South Africa or any other jurisdiction where it would be unlawful to do so.
Accordingly, copies of this announcement and all other documents relating to the
Cash Offer are not being, and must both not be, mailed or otherwise forwarded,
distributed or sent in, into or from Australia, Canada, Japan, South Africa or
any other jurisdiction where it would be unlawful to do so. Persons receiving
such documents (including, without limitation, nominees, trustees and
custodians) should observe these restrictions. Failure to do so may invalidate
any related purported acceptance of the Cash Offer. Notwithstanding the
foregoing restrictions, Guanabara reserves the right to permit the Cash Offer to
be accepted if, in its sole discretion, it is satisfied that the transaction in
question is exempt from or not subject to the legislation or regulation giving
rise to the restrictions in question.
This announcement has been prepared for the purposes of complying with Irish
law, the rules of the AIM and the Takeover Rules and the information disclosed
may not be the same as that which would have been disclosed if this announcement
had been prepared in accordance with the laws and regulations of any
jurisdiction outside of Ireland.
This announcement does not constitute an offer to sell or an invitation to
purchase or subscribe for any securities or the solicitation of an offer to
purchase or subscribe for any securities. Any response in relation to the Cash
Offer should be made only on the basis of the information contained in the Offer
Document or any document by which the Cash Offer is made.
The directors of Guanabara accept responsibility for all the information
contained in this announcement, save that the only responsibility accepted by
them in respect of information in this announcement relating to the
EcoSecurities Group which has been compiled from public sources is to ensure
that such information has been correctly and fairly reproduced and presented.
Subject as aforesaid, to the best of the knowledge and belief of the directors
of Guanabara (who have taken all reasonable care to ensure that such is the
case), the information in this announcement for which they accept responsibility
is in accordance with the facts and does not omit anything likely to affect the
import of such information.
Any person who is the holder of 1 per cent or more of any class of shares in
EcoSecurities or Guanabara may be required to make disclosures pursuant to Rule
8.3 of the Takeover Rules with effect from 5 June 2009, the date of the
announcement which commenced the offer period in respect of the Cash Offer.
Appendix I
Presentation of Information, Bases and Sources
A. Third Party Sources
Guanabara confirms that the information in this document obtained from third
party sources has been correctly and fairly reproduced. So far as Guanabara is
aware and has been able to ascertain from information published from such third
parties, no facts have been omitted which would render the reproduced
information inaccurate or misleading. Guanabara does not have access to the
facts and assumptions underlying the data extracted from publicly available
sources. As a result, Guanabara is unable to verify such.
B. Throughout the Document (except where otherwise specified)
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| (1) | The financial information relating to EcoSecurities has been extracted or |
| | derived (without any adjustments) from annual reports and accounts of |
| | EcoSecurities for the relevant periods and other information made publicly |
| | available by Ecosecurities, including the Interim Results and Response |
| | Circular dated 4 August 2009; and |
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| | |
+-----+----------------------------------------------------------------------------+
| (2) | Information regarding the Guanabara Offer is sourced from the Offer |
| | Document and other material made publicly available by Guanabara. |
+-----+----------------------------------------------------------------------------+
C. Rounding
Values stated throughout the document have been subjected to rounding and are
given to the stated number of decimal places. As a result of this rounding, the
totals of values presented in this document may vary slightly from the actual
arithmetic totals of such values.
D. References
The relevant bases of calculation and sources of information are provided below
in the order in which such information appears in this document. Where such
information is repeated in this document, the underlying bases and sources are
not.
The reference to another reduction in the contracted portfolio of EcoSecurities
following a reduction in 2008 is sourced from the published annual report of
EcoSecurities and the Interim results as detailed below:
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| (a) | According to the 2008 Annual Report, the contracted CER Portfolio as |
| | at the 31 December 2008 was 144 million tonnes (page 10); and |
| | |
+-----+-----------------------------------------------------------------------+
| (b) | According to the Interim Results, the contracted CER Portfolio as at |
| | the 30 June 2009 was 124 million tonnes (page 2). |
+-----+-----------------------------------------------------------------------+
The reference to a significant reduction in the growth rate of expected CER
volumes from the Company's registered projects is sourced from the following:
+-----------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------+
| (a) According to the 2007 Annual Report, registered projects as at the 31 |
| December 2007 represented 13 million CERs (page 11); |
| (b) According to the 2008 Annual Report, registered projects as at the 31 |
| December 2008 represented 35 million CERs (page 10); and |
| (c) According to the Interim Results, registered projects as at the 30 |
| June 2009 represented 40 million CERs (page 2). |
| |
+-----------------------------------------------------------------------------+
The reference to EUR1.06m profit before tax is sourced from the Interim Results
(page 12).
The reference to the contribution of net finance income of EUR0.72m to the
Company's profit before tax is sourced from the Interim Results (page 12).
The reference to operating profit of EUR0.34 m is sourced from the Interim Results
(page 12).
The reference to sales of EUR60.0 is sourced from the Interim Results (page 1).
The reference to the acceleration of deliveries of forward sales above the
previously planned level is sourced from the Interim Results (page 7).
The reference to the Company's substantial trading activity and the relevant
number of CERs is sourced from the Interim Results (page 7).
The reference to the reduction in the Company's inventory and to the relevant
numbers of CERs is sourced from the Interim Results (page 8)
The reference to EcoSecurities not providing any guidance as to profitability in
the full financial year and beyond is based on the absence of such statement
either in the Interim Results or the Response Circular dated 4 August 2009.
The reference to market uncertainties is sourced from the article "Pressure
mounts as UN negotiators resume talks" published on 7 August 2009 by Point
Carbon on http://www.pointcarbon.com and, among other sources, from the other
articles mentioned below with respect to recent press coverage.
The reference to the recent reduction in pre-2013 CER forecasts by Unep Risoe is
sourced from an article entitled ""UN revises down CER Forecast" from the
publication Carbon Market Daily, Volume 5, Issue 155 published on 10 August 2009
(page 3) by Point Carbon.
The references to write-downs in the contracted portfolio of EcoSecurities' peer
group and to the relevant figures are based on:
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| (a) | Tricorona AB's Interim Report dated 23 July 2009 for the six months |
| | to 30 June 2009 (page 8); |
| | |
+-----+-----------------------------------------------------------------------+
| (b) | Camco International Limited's Trading Update published on 6 August |
| | 2009; and |
| | |
+-----+-----------------------------------------------------------------------+
| (c) | Trading Emissions plc's Trading Statement published on 11 August |
| | 2009. |
+-----+-----------------------------------------------------------------------+
The reference to recent press coverage is sourced from the following articles:
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| (a) | "Pressure mounts as UN negotiators resume talks" published on 7 |
| | August 2009 by Point Carbon on http://www.pointcarbon.com; |
| | |
+-----+-----------------------------------------------------------------------+
| (b) | "Big oil pumps up the cash amid US climate debate" published on 31 |
| | July 2009 by Point Carbon on http://www.pointcarbon.com; |
| | |
+-----+-----------------------------------------------------------------------+
| (c) | "Ban Ki-moon warns of catastrophe without world deal on climate |
| | change" published on 10 August 2009 by the Daily Telegraph on |
| | http://www.telegraph.co.uk; and |
| | |
+-----+-----------------------------------------------------------------------+
| (d) | "Time 'runs short' on climate deal" published on 10 August 2009 by |
| | the BBC on http://news.bbc.co.uk |
+-----+-----------------------------------------------------------------------+
The reference to parties which have given irrevocable undertakings not to accept
Guanabara's Offer and their connection with the Company and its current
management is sourced from the Response Circular dated 4 August 2009 and the
list of the companies' directors as published on the Company's website
(www.ecosecurities.com) on the date of publication of this document.
Details of the Offer price, premium and Volume Weighted Average Trading Price
are extracted from the Offer Document (pages 3 and 4).
Appendix II
Documents Available for Inspection
In addition to copies of the documents listed as available for inspection in the
Offer Document and in the Guanabara letter to EcoSecurities Shareholders dated
22 July 2009, a copy of this document will be available for inspection at the
offices of A&L Goodbody, IFSC, North Wall Quay, Dublin 1 during normal business
hours on any weekday (Saturday, Sunday and public holidays excepted) whilst the
Cash Offer remains open for acceptance.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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