Exercise of Mountain Energy Call Option
[29/05/2009]
Running River PLC, the PLUS-quoted company formed to invest in the renewable energy sector, is pleased to announce that it has now exercised the option to acquire the balance of the shares in Mountain Energy Corporation Limited (“MEC”), details of which were originally announced on 6 February 2008.
MEC, in which the Company already holds a 2.6 per cent. interest, has formed a joint venture company with an investment fund managed by a major international investment bank to develop and operate hydro-electric power projects in India. Under the terms of the joint venture agreement, the joint venture partner has invested US$5 million in equity and has committed to make available a further US$10 million through a convertible loan agreement in return for a 27.78 per cent holding in the joint venture company. MEC retains the remaining 72.22 per cent. prior to conversion under the loan agreement if any.
Furthermore, the joint venture company has completed the acquisition of interests in an Indian company, which holds licences to construct and operate two run-of-river hydro-electric plants in Northern India.
As a result of this progress, Running River has exercised its call option to acquire the remaining shares in MEC from its other shareholders for £13.636 million. This will be satisfied by the issue of new ordinary shares in Running River, which will be issued at a price of 1.5p per share or, if lower, the price at which the Company issues shares in a placing at the time of completion of the acquisition. The acquisition of the outstanding 97.4 per cent. of MEC's issued share capital will constitute a reverse takeover in accordance with the PLUS Rules for Issuers and is conditional, amongst other things, on approval by Running River shareholders and on admission of the enlarged group to trading on PLUS, or possibly on AIM. A circular will therefore be sent to shareholders and an Extraordinary General Meeting will be held to seek approval for the acquisition. In the meantime, the Company has requested for its shares to be suspended from trading on PLUS.
Running River Chairman John Woolgar said, “This acquisition represents a tremendous opportunity for the Company to become involved at an early stage in renewable power generation in one of the world’s fastest growing economies. We look forward to updating shareholders on our progress and relevant timings relating to the acquisition in due course.”
The Directors of Running River accept responsibility for this announcement.
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Running River PLC, the PLUS-quoted company formed to invest in the renewable energy sector, is pleased to announce that it has now exercised the option to acquire the balance of the shares in Mountain Energy Corporation Limited (“MEC”), details of which were originally announced on 6 February 2008.
MEC, in which the Company already holds a 2.6 per cent. interest, has formed a joint venture company with an investment fund managed by a major international investment bank to develop and operate hydro-electric power projects in India. Under the terms of the joint venture agreement, the joint venture partner has invested US$5 million in equity and has committed to make available a further US$10 million through a convertible loan agreement in return for a 27.78 per cent holding in the joint venture company. MEC retains the remaining 72.22 per cent. prior to conversion under the loan agreement if any.
Furthermore, the joint venture company has completed the acquisition of interests in an Indian company, which holds licences to construct and operate two run-of-river hydro-electric plants in Northern India.
As a result of this progress, Running River has exercised its call option to acquire the remaining shares in MEC from its other shareholders for £13.636 million. This will be satisfied by the issue of new ordinary shares in Running River, which will be issued at a price of 1.5p per share or, if lower, the price at which the Company issues shares in a placing at the time of completion of the acquisition. The acquisition of the outstanding 97.4 per cent. of MEC's issued share capital will constitute a reverse takeover in accordance with the PLUS Rules for Issuers and is conditional, amongst other things, on approval by Running River shareholders and on admission of the enlarged group to trading on PLUS, or possibly on AIM. A circular will therefore be sent to shareholders and an Extraordinary General Meeting will be held to seek approval for the acquisition. In the meantime, the Company has requested for its shares to be suspended from trading on PLUS.
Running River Chairman John Woolgar said, “This acquisition represents a tremendous opportunity for the Company to become involved at an early stage in renewable power generation in one of the world’s fastest growing economies. We look forward to updating shareholders on our progress and relevant timings relating to the acquisition in due course.”
The Directors of Running River accept responsibility for this announcement.
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