VLR Voller Energy

    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
 
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