KPR KP Renewables

RNS Number:3443T
KP Renewables PLC
20 March 2007



                               KP Renewables Plc
                                ("the Company")

Capital Reorganisation, Proposals for Refinancing the Company, Board Changes and
                       Intention to Seek Relisting on AIM


The Company is pleased to announce that proposals have been finalised to be put
to shareholders which will enable the Company to relist its shares on the AIM
Market.

The Company obtained a quotation on AIM on 29 July 2005 with a strategy to
establish a leading position in the United Kingdom renewable energy sector by
developing, building or acquiring a portfolio of renewable energy projects in
conjunction with small to mid-sized renewable energy generators. During the
period to May 2006, the Company made good progress in identifying suitable
opportunities for development and investment, and entered into a number of
significant development agreements. However, since May 2006, the development
programme has been restricted as a result of a shortage of funds; this shortage
can be attributed indirectly to the illness and subsequent untimely death of the
Company's Chief Executive and Founder, Dr James Richard Watkins, who was leading
the fund raising efforts.

The Board had been hopeful that it would be able to generate value from its
existing portfolio of projects but, in view of the financial position of the
Company, there were insufficient resources to devote to these projects to bring
them to fruition. Indeed, the financial position of the Company was such that,
on 21 September 2006, the Board requested that the Company's Existing Ordinary
Shares be suspended from trading on AIM pending a decision on refinancing.

Since the suspension, the Board has continued to seek to realise value for
Creditors and Shareholders and has taken forward the proposed sale of small wind
farm projects. Negotiations are continuing for their sale; however, there can be
no certainty as to the outcome at this stage. They have considered a number of
other proposals to refinance the Company in its present form but none have
proceeded beyond early stage discussions.

As a consequence, the Board, with the active assistance of its advisers, has
conducted a review of all the available options and concluded that the Proposals
represent the only route to provide some residual value for Creditors and
Shareholders. The Proposals will provide the Company with sufficient new working
capital to enable it to announce its Interim Results and to meet its expected
future obligations and to review its portfolio of projects and, where possible,
resuscitate them. Following approval of the Proposals and the proposed
Refinancing, the Directors will be in a position to announce the interim results
for the financial period to 30 June 2006 and it is expected that the suspension
of the Company's shares from trading on AIM will be lifted.

The Directors believe the Proposals will be a first step towards providing an
opportunity to achieve future value for Shareholders. An Extraordinary General
Meeting of Shareholders has been called, to be held at 11 am on 10 April 2006,
to seek approval, inter alia, for an increase in and reorganisation of the
Company's share capital, for the disapplication of statutory pre-emption rights
to enable the Proposals to be implemented and for these steps to be approved in
order to address the serious loss of capital that the Company has suffered (as
described under the heading Serious Loss of Capital, below).

If the Proposals are approved, the Company will continue to operate in the
renewable energy sector and the immediate priority of the Board will be to
attempt to crystallise value from some of the existing projects in a cost
effective manner for the benefit of Creditors and Shareholders. However, the
Directors recognise that the business will initially be limited in scale and
that it may be in shareholders best interests for consideration to be given
either to a significant further fund raising to support investment in a sizable
project in the renewable energy field or to the acquisition of another business.
In the latter event, this would almost certainly be considered to be a reverse
takeover under the AIM Rules and would be subject to further approval by
shareholders.

Board Changes

In preparation for the Proposals and the EGM, David Lloyd-Jacob, Stephen
Drummond and Paul Goodrow have resigned as directors of the Company, while David
Lindley and John Bryant will remain as directors. Peter Redmond and Richard
Armstrong have agreed to join the Board, subject to the approval and
implementation of the Proposals.

Peter Redmond (aged 60) has over 20 years' experience in corporate finance and
small cap fundraising and is a particular specialist in the reconstruction and
recapitalisation of microcap companies, including Bizzbuild plc (now Optimisa
plc), Weatherly International plc and Future Internet Technologies plc and
assisting them to acquire new businesses. He is the CEO of the corporate finance
house, Merchant House Group Plc, and is a director of AIM-quoted Weatherly
International plc, Bella Media plc and Fortfield Investments plc.

Richard Armstrong (aged 59) is an associate with Fiske plc, the AIM quoted
stockbrokers. He is a former equity analyst with extensive experience in
reconstructing and raising capital for turnaround situations especially in the
quoted microcap sector, including Bizzbuild plc (now Optimisa plc), Weatherly
International plc and Future Internet Technologies plc He is a director of AIM
quoted Fortfield Investments plc.

Serious Loss of Capital

As a consequence of the financial position of the Company its net assets are
less than half the amount of its called up share capital. As a result, under
s142 of the Act, the Company is required to convene an EGM in order to discuss
the Company's financial position. The Directors consider that the Proposals
address this issue.

The Proposals

The Placing

The Company has raised at least #150,000 which provides sufficient funds to
address its immediate priorities and responsibilities to the Creditors through a
conditional placing of New Consolidated Ordinary Shares at the Placing Price.
The Directors anticipate receiving additional commitments to provide funds for
development prior to the EGM to be held on 10 April 2007 and Shareholders will
be informed of the final amount of the Placing in due course.

Immediately upon the passing of the Resolutions at the EGM the Directors intend
to exercise their authority to allot the necessary number of New Consolidated
Ordinary Shares for the purposes of the CVA and the Placing. The Placing is
conditional upon the lifting of the suspension of the trading on AIM of the
Company's Existing Ordinary Shares and admission of the New Consolidated
Ordinary Shares to trading to AIM.

Company Voluntary Arrangement (CVA)

Unsecured creditors are to be offered either a payment of 4p in the # to be paid
in cash or, at the option of individual creditors, a cash payment of 2p in the #
plus an allotment of new ordinary shares to the equivalent value of 2p in the #
at the issue price. Those creditors who choose the cash and share option will be
entitled to annual dividends to be paid by the Supervisor of the CVA which will
represent 60 per cent of the net proceeds generated from existing projects over
the first three years following the commencement of the CVA.

Meetings of Creditors and Shareholders have been convened under the provisions
of the Insolvency Act 1986 for 10 am and 10.15 am, respectively, on 10 April
2007, immediately prior to the EGM. The Proposals, and hence the Resolutions to
be proposed at the EGM, are dependent upon the resolutions proposed at the
Creditors' and Shareholders' meetings in relation to the CVA being passed. In
the event that such resolutions are not passed the Chairman will open, but then
adjourn the EGM and take the necessary steps which will lead to the appointment
of a liquidator.

Capital Reorganisation

The price at which the Company is able to raise additional capital is less than
the current nominal value of its Existing Ordinary Shares. However, the Act
prevents a company from issuing shares at a discount to the nominal value.
Accordingly, it will be necessary to reorganise the share capital of the Company
to allow the Placing to take place at the proposed Placing Price.

Resolutions will be proposed at the EGM to inter alia:

(a) sub-divide each of the issued Existing Ordinary Shares into one New
Sub-divided Ordinary Share of 0.05p and one Deferred Share of 0.95p. The New
Sub-divided Ordinary Shares created will have all the rights of the Existing
Ordinary Shares. The Deferred Shares will have very limited rights which
effectively render them economically valueless with no voting rights, although
they continue to represent a proportion of the Company's permanent capital until
such time as they are cancelled by a subsequent resolution of the holders of the
Company's ordinary shares;

(b) the New Sub-divided Ordinary Shares of 0.05p each will be consolidated into
New Consolidated Ordinary Shares of 1p each on the basis that every 20 New
Ordinary Shares will be consolidated into one New Consolidated Ordinary Share.
This will have no significant effect on Shareholders but will reduce the large
number of New Consolidated Ordinary Shares that would otherwise be in issue; and

(c) subject to the resolutions concerning the Sub-division and Consolidation
being passed, adopt new articles of association of the Company which will
contain, inter alia, the rights and restrictions attaching to the Deferred
Shares.

Increase in share capital, authority to allot and disapplication of pre-emption
rights

In addition to those resolutions described above, the following resolutions will
be put to Shareholders at the EGM:

(a) that the authorised share capital of the Company be increased from the
existing #1,000,000 to #6,000,000;

(b) that the Directors be granted authority to issue and allot a maximum of
553,410,338 New Consolidated Ordinary Shares under section 80 of the Act;

(c) that the Directors be granted authority to allot a maximum of 553,410,338
New Consolidated Ordinary Shares without the application of section 89 of the
Companies Act 1985 which represents approximately 92 per cent of the total
increased issued and unissued ordinary share capital of the Company assuming the
Proposals are implemented; and

(d) the Directors seek the Shareholders' approval of their course of action to
address the serious loss of capital in the Company by the recapitalisation of
the Company under the Proposals.

The Shareholders should note that the Directors are asking for the authority to
issue a substantial number of shares on a non pre-emptive basis. The Board has
considered the Company's position carefully and after consultation with the
proposed new directors it is considered appropriate that such authority should
be sought now in order that the Company is able to raise additional capital
without the need to incur the expense and delay of seeking further shareholder
approval. However, in the event of a reverse takeover, shareholder approval
would be required.

Conditions of the Proposals

The Company has already received commitments from Shareholders to vote in favour
of the Resolutions amounting to 76.75 per cent of the Existing Ordinary Shares.
The Proposals, including the Placing, are conditional only upon the Creditors
and Shareholders approving the CVA, the lifting of the suspension of the trading
of the Company's Existing Ordinary Shares on AIM and admission of the New
Consolidated Ordinary Shares to trading to AIM.

Change of Adviser

Libertas Capital Corporate Finance has been appointed the Company's Nominated
Adviser, in addition to its existing role as broker, with immediate effect.

For further information contact

John Bryant, Chairman, KP Renewables Plc Tel 07768 888359

Andrew Raca, Managing Director, Libertas Capital Tel 0207 569 9650

Oli Rayner, Director, Merchant Capital Plc Tel 0207 332 2200





                      This information is provided by RNS
            The company news service from the London Stock Exchange

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