7th Nov 2007 08:00
Greenko Group plc07 November 2007 This announcement has been prepared by Greenko Group plc (the "Company") inconnection with its application for admission of the entire issued ordinaryshare capital of the Company (the "Ordinary Shares") to AIM and to trading onthe Alternative Investment Market of the London Stock Exchange (the"Admission"). This announcement does not constitute a prospectus relating to theCompany, nor does it constitute or form part of any offer or invitation topurchase, sell or subscribe for, or any solicitation of any such offer topurchase, sell or subscribe for, any securities in the Company nor shall thisannouncement or any part of it, or the fact of its distribution, form the basisof, or be relied on in connection with, any contract therefore. Greenko Group plc Placing of 32,144,011 Ordinary Shares of €0.005 each at €1.40 per share Admission to trading on AIM Greenko Group plc ("Greenko" or "the Company"), the owner and operator of cleanenergy projects in India, announces completion of a successful Placing of32,144,011 Ordinary Shares by Arden Partners plc ("Arden Partners") and itsadmission to trading on AIM today under the ticker GKO. The placing raised approximately €45 million before expenses which will be usedto satisfy commitments in existing projects and fund further growth towards400MW capacity, through acquisition of existing assets, investment in projectswhich are in the process of construction and the building of new plants. Arden Partners, nominated adviser and broker to Greenko, has placed these shareswith institutional and individual investors. Fundraising Statistics +-----------------------------------------+------------------+----------------+|Placing Price | €1.40 | 97.6p |+-----------------------------------------+------------------+----------------+|Number of new Ordinary Shares being | 32,144,011 | - ||placed on behalf of the Company | | |+-----------------------------------------+------------------+----------------+|Estimated net proceeds receivable by the | Approx. €41.7 | Approx. £29.1 ||Company | million | million |+-----------------------------------------+------------------+----------------+|Gross proceeds of Placing | Approx. €45 | Approx. £31.4 || | million | million || | | || | | |+-----------------------------------------+------------------+----------------+|Number of Ordinary Shares in issue | 67,989,237 | - ||immediately following Admission | | |+-----------------------------------------+------------------+----------------+|Market capitalisation following the | Approx. €95.2 | Approx. £66.4 ||Placing at the Placing Price | million | million || | | || | | |+-----------------------------------------+------------------+----------------+ About Greenko • Greenko is a cash generative, profitable Indian clean energy producer with: o Secured assets of 90.5 MW o An experienced management team o A clear strategy for growth across biomass, hydro and wind assets • Greenko operates in, and derives its revenues from, both the Indian electricity market and through the sale of Carbon Emmission Reduction Units (CERs) under the EU Emissions Trading Scheme. • The Indian economy's annual growth rate in each of the last five years is in excess of 8%. This, combined with an existing deficit of energy supplies, an increase in per capita energy consumption and an estimated 44% of households still not connected to the National Grid has led to: o A Government target of an additional 68.5 GW of capacity to be installed between 2007-2012 (current installed capacity 127 GW) o Deregulation of the sector and favourable tariffs for private investment o Regulatory initiative for 10% of all new energy to come from renewable sources • Greenko seeks to capitalise on this by acquiring a portfolio of biomass, hydro and wind plants. Having achieved an installed capacity of 90.5 MW, the Company is now focused on establishing itself as a leading clean energy producer in India • Initially Greenko will use the funds raised to acquire existing schemes and build new projects from which it aims to maximise returns by improving operating efficiencies, selling directly to end users and consolidation of existing financing on more favourable terms Greenko's existing projects are expected to generate approximately 300,000 CERsin 2008 which can be sold on to end users seeking to fulfil their obligationunder the Kyoto Protocol. New acquisitions to the asset portfolio will generatefurther CERs and increase revenues from this area. Commenting on today's announcement, Anil Chalamalasetty, Chief Executive Officerof Greenko Group plc, said: "Our belief that the Indian renewable energy sector represents an attractiveinvestment proposition has been reflected by the positive response frominstitutions to the fundraising. Greenko allows investors to participate in theIndian electricity market which is benefiting from a range of incentives andundergoing rapid expansion in order to meet the growing levels of demand fromboth consumers and industry which India has experienced over the past fiveyears. We look forward to developing Greenko further as a public company." Additional information can be found on their website www.greenkogroup.com orfurther enquiries can be made to: Enquiries: Greenko Group plc Anil Chalamalasetty +91 (0)98 4964 3333 Mahesh Kolli +44 (0)7767 692729 Tim Bowen +44 (0)7973 668 818 Arden Partners plc Christopher Hardie 020 7398 1600 Adrian Trimmings Cardew Group Rupert Pittman 020 7930 0777 Jamie Milton Catherine Maitland NOTES TO EDITORS Background Greenko intends to become a leading owner and operator of clean energy projectsin India. Currently, the Group owns and operates five biomass plants with afifty percent holding in a sixth. The Group has acquired the licence to operatetwo hydro plants which are currently under construction bringing the totalenergy generation capacity controlled by Greenko to 90.5 MW. Greenko's mediumterm aim is to build a portfolio of clean energy assets with a combined capacityof approximately 400 MW through acquisition of existing assets and purchase ofplants currently under construction. The Indian renewable energy sector is arelatively young and fragmented market and Greenko intends to be a consolidatorwithin the sector. The Directors believe that operational and financial benefitswill flow from this strategy. The Group earns revenue from the sale of electricity to state electricity boardsand state owned distribution companies with whom it benefits from long termpower purchase agreements and a tariff structure that is favourable to cleanenergy projects. The Group also generates Certified Emission Reduction units("CERs") annually from its clean energy plants which are registered within theClean Development Mechanism - Executive Board. The Indian economy India has a population of over 1.1 billion people, which is currently growing at1.5 per cent. per annum, making it one of the largest populations in the worldwith a median age of approximately 25 years of age and a growing, well educatedworkforce. The Indian economy has benefited from low inflation and recentliberalisation has encouraged strong international investment which has helpedto promote growth in GDP, in real terms, in excess of 8 per cent. per annum ineach of the last five years. This growth in industrial production and GDP percapita has resulted in a strong increase in demand for electricity and has ledto a shortfall of supply, resulting in both brown-outs (where the voltage leveldrops below the normal minimum level specified for the system, thereforeparticularly damaging to electric motors) and black-outs. In addition, the 2001Indian Census reported that 44 per cent. of households did not have access toelectricity. Directors Harish Chandra Prasad Yarlagadda, Non-Executive Chairman Harish is the founder and principal shareholder of Malaxmi, a privateinfrastructure group. He began his career with power project consultants DeseinPrivate Limited, and after a short period with Spectrum Power Generation joinedLanco Group as Managing Director (Power). The initial project, a 368 MW gasplant for Lanco Group, was the first private sector power project in India underthe tariff based international competitive bidding process. During his career,Harish has been responsible for setting up over 3,500 MWs of installed capacityof power plants within India. He is a non-executive director of MIC Electronics,listed on the Bombay Stock Exchange. He is a qualified engineer and has beeninvolved in energy related projects for much of his career. Anil Chalamalasetty, Co-Founder and Chief Executive Officer Anil has had an extended entrepreneurial career during which he was involved inevolving start-up businesses in the information technology, infrastructure andenvironmental sectors in the UK and India. Anil is experienced in merger andacquisitions, transition and project management with a successful track recordof managing operations involving large remote teams. He co-founded and developedGreenko with Mahesh Kolli in 2004 and incorporated it in early 2006 to raisefunds for financing early operations. He is responsible for effectivelyimplementing the strategic business road map of the Group. Anil is a graduate incomputer science and holds a Masters from North West University, USA. Mahesh Kolli, Co-Founder and President Mahesh started his career at a 1,000 MW power plant and went on to build hisentrepreneurial interests in the information technology and environmentalsectors. He is experienced in the emissions trading markets and is co-founder,with Anil Chalamalasetty, of Lytag Asia, an environmental solutions companyfocused on coal gasification and transforming waste from thermal power plantsinto light-weight building products. Within Greenko, he is responsible fordriving the vision, business development and new project initiatives of thegroup. Mahesh is a graduate in mechanical engineering from Karnataka, India. Tim Bowen, Chief Financial Officer Tim has over 20 years of accounting and finance experience within successfulentrepreneurial businesses and from 2000 to 2005 was CFO/COO of IDOX plc, aninformation management group. He was instrumental in its successful AIMflotation in 2000 and subsequently led a number of secondary fundraisings andacquisitions. In 2005, he joined 121 Media Inc. as CFO which rebranded to becomePhorm Inc. in May 2007. Tim initially joined Greenko as a part time CFO in June2006 and has since been responsible for managing pre-IPO fundraisings andsetting up the finance function in Hyderabad. He graduated with B.Sc. (Econ)Hons. in accounting and financial management and is a Fellow of the CharteredInstitute of Management Accountants. Dr Vivek Tandon, Non-Executive Director Vivek, the co-founder and general partner of Aloe Private Equity, S.A.S. is anexperienced international executive and proven entrepreneur with in-depthbackground in building technology companies spanning the telecom, renewableenergy and environmental sectors. He is currently Vice-Chairman of the AdvisoryBoard of Allied Technology Group, an environmental engineering company focusedon waste water treatment, air pollution treatment for power plants and coalgasification. He also sits on the boards of Maxsys Limited, Recupyl S.A.S. andEnvironCom Limited. He has been closely involved with Greenko since itsincorporation and subsequent fundraising. Hari Kiran Vadlamani, Non-Executive Director Kiran is a co-founder of KSK Power Ventur plc, an AIM quoted Indian energycompany. Kiran currently looks after the asset management division of KSK andmanages the SIB fund which is an investor in Greenko. SIB focuses on investingin power generation companies. As a manager to the fund, he has invested in 14project companies across India and has successfully exited from 4. He is aqualified chartered accountant, and prior to KSK worked as a consultantspecialising in the areas of corporate finance, capital markets and merger andacquisition transactions. Persons who wish to subscribe for and/or purchase Ordinary Shares pursuant tothe Placing are reminded that any such subscription and purchase should only bemade on the basis of the information contained in the admission document in itsfinal form to be published in connection with the Admission and not on theinformation contained in this announcement. No reliance may be placed, for anypurposes whatsoever, on the information contained in this announcement or on itscompleteness, accuracy or fairness and this announcement should not beconsidered a recommendation by the Company, Arden Partners plc ("Arden"), or anyof their respective affiliates in relation to any purchase of or subscriptionfor securities of the Company. Arden has NOT authorised the contents of, or anypart of this announcement and no reannouncement or warranty, express or implied,is given by or on behalf of the Company or Arden, or any of their respectivedirectors, partners, officers, employees, advisers or any other persons as tothe accuracy, fairness or sufficiency of the information or opinions containedin this announcement and none of the information contained in this announcementhas been independently verified by Arden or any other person. Save in the caseof fraud, no liability is accepted for any errors, omissions or inaccuracies insuch information or opinions. This announcement is being made only in the UnitedKingdom and is directed only at (i) persons having professional experience inmatters relating to investments, i.e. investment professionals within themeaning of Article 19(5) of the Financial Services and Markets Act 2000(Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worthcompanies, unincorporated associations and other bodies within the meaning ofArticle 49 of the FPO and (iii) persons to whom it is otherwise lawful to makethe announcement. The investment or investment activity to which thisannouncement relates is available only to such persons and will be engaged inonly with such persons. Persons who fall outside categories (i) and (ii) abovemust check that they fall within category (iii). If they do not, they may notattend this announcement. Any person who does not fall within categories (i) -(iii) above may not act upon the matters communicated at this announcement. Anyperson falling outside categories (i) - (iii) who has received any documentforming part of this announcement must return it immediately. Neither thisannouncement nor any copy of it may be (i) taken or transmitted into the UnitedStates of America, (ii) distributed, directly or indirectly, in the UnitedStates of America or to any US person (within the meaning of regulations madeunder the Securities Act 1933, as amended), (iii) taken or transmitted into ordistributed in Canada, Australia, the Republic of Ireland or the Republic ofSouth Africa or to any resident thereof, or (iv) taken or transmitted into ordistributed in Japan or to any resident thereof. Any failure to comply withthese restrictions may constitute a violation of the securities laws or the lawsof any such jurisdiction. The distribution of this document in otherjurisdictions may be restricted by law and the persons into whose possessionthis document comes should inform themselves about, and observe any suchrestrictions. This announcement is being made on the basis that the recipientskeep confidential any information contained herein or otherwise made available,whether orally or in writing, in connection with the Company. This announcementis confidential and must not be copied, reproduced, published, distributed,disclosed or passed to any other person at any time without the prior writtenconsent of Arden, as agent for the Company. Arden, which is regulated by theFinancial Services Authority, is acting only for the Company in connection withthe proposed Placing and Admission and is not acting for or advising any otherperson, or treating any other person as its client, in relation thereto and willnot be responsible for providing the regulatory protection afforded to clientsof Arden or advice to any other person in relation to the proposed Placing andAdmission. Any other person attending this announcement should seek their ownindependent legal, investment and tax advice as they see fit. By attending thisannouncement, you agree to be bound by the foregoing terms. Certain Statementsincluded herein, including those regarding customers, costs, potential marketshare and other statements that express the Directors of the Company'sexpectations or estimates of the Company's future performance, constitute"forward-looking statements", Forward-looking statements are necessarily basedupon a number of estimates and assumptions that, while considered reasonable bymanagement are inherently subject to significant business, economic andcompetitive uncertainties and contingencies. Such forward-looking statementsinvolve known and unknown risks, uncertainties and other factors that may causethe actual financial results, performance or achievements of the Company to bematerially different from its estimated future results, performance orachievements expressed or implied by those forward-looking statements and theCompany's forward-looking statements are not guarantees of future performance.The Company expressly disclaims any intention or obligation to update or reviseany forward-looking statements whether as a result of new information, events orotherwise. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
GKO.L