5 February 2025

Active Energy Group plc

("Active Energy" or the "Company") 

Notice of AGM and Notice of GM

Active Energy (AIM: AEG, OTCQB: ATGVF), the biomass-based renewable energy Company, announces that a Notice of Annual General Meeting and Form of Proxy, and Notice of General Meeting (in relation to Section 656 of the UK Companies Act 2006) (the "Notices")  have been posted to shareholders and are also available on the Company's website at: https://aegplc.com/

Extracts from the Notices, including the full text of the Chairman's letter, are set out below.

Enquiries: 

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

Dear Shareholder,

I am writing to you to inform you that due to practical constraints, the AGM which should have been held during the calendar year of 2024 will be held on 27 February 2025. This is primarily due to the delay in the publication of the Audited results for the year ended 31 December 2023, which were published on 4 December 2024. It was not possible to finalise the accounts before 4 December 2024.

Board Changes

James Leahy informed the Company of his intention (and the Company has agreed) to cease to act as Director of the Company (without compensation) at the conclusion of the AGM. Michael Rowan will cease his role as Chief Executive Officer and intends to temporarily remain as a Non-Executive Director of the Company during an orderly hand over period but will cease to act as a Director of the Company (without compensation) at the end of such hand over period.

New Directors

Paul Elliott and Pankaj Rajani each were appointed to the Board with immediate effect on 27 January 2025.

Restoration of admission to trading on AIM

Due to the inability of the Company to publish accounts before 30 June 2024 trading in ordinary shares of the Company was suspended on 1 July 2024. Trading in the Existing Ordinary Shares of the Company recommenced on AIM on 18 December 2024.

1.            Section 656 Meeting

Section 656 of the Act - serious loss of capital

I am also writing to you to inform that, in circumstances where the value of the Company's net assets is less than half of its called-up share capital (constituting a "serious loss of capital" under the Act), the Directors are required, pursuant to Section 656 of the Act, to convene a general meeting of the Company for the purpose of allowing shareholders to consider whether any, and, if so, what, steps should be taken to deal with the situation.

Accordingly, the Board is calling the Section 656 Meeting to ensure that the loss of capital is addressed as required by the Act. The Board welcomes dialogue with the Company's shareholders, and the Section 656 Meeting will provide a forum for such discussions to take place, but no resolutions will be proposed at the Section 656 Meeting.

The Board does not consider it necessary to propose a specific resolution in relation to the serious loss of capital and shareholders will not be asked to vote at the Section 656 Meeting. Instead, the Board invites shareholders of the Company to discuss the serious loss of capital and to put questions to the Board. The Board considers the Resolutions (which are to be voted on at the AGM) to be the appropriate response to the serious loss of capital.

2.            Annual General Meeting

Immediately following the conclusion of the Section 656 Meeting, this year's AGM will be held on 27 February 2025 at 10:15 a.m. Details of the business to be considered at the AGM are set out in the notice of AGM meeting ("AGM Notice") which follows this letter.

Ordinary Resolutions

Resolution 1 - Report and Accounts

To receive the Annual report and Accounts of the Company for the financial year ended to 31 December 2023

Resolution 2 - Re-appointment of Auditors

To re-appoint Gravita Audit Limited as the Company's auditors and to authorise the Directors to fix their renumeration.

Resolution 3 - Auditors' Remuneration

To authorise the directors to determine the remuneration of the auditors of the Company

Resolution 4 - Share Sub-division

As at 4 February 2025, the issued share capital of the Company comprised 161,863,136 Ordinary Shares of 0.35 pence each in the capital of the Company.

The Ordinary Shares share price on AIM at close on 3 February 2025 was 0.33p which is below the nominal value of such shares. Under the Companies Act 2006, a company is unable to issue shares at a subscription price which is less than the nominal value of shares of the same class. This means that, as the nominal value of the Ordinary Shares is currently 0.35p, the Company could not issue further Ordinary Shares at a price of less than 0.35p per share, without a sub-division of the Ordinary Shares. The Board, therefore, considers it prudent to implement the proposed Sub-division in order that the nominal value of the New Ordinary Shares becomes lower than the current trading price of the same, therefore allowing the Company the possibility to raise funds at a discount to the current price per Ordinary Share by issuing further Ordinary Shares, should the Directors elect to do so in due course. 

Consequently, the Directors consider that the proposed share Sub-division (as briefly summarised below) will result in a more appropriate share capital structure for the Company.

Also, under the terms of existing Notes (constituted by the Loan Notes Instrument) recently issued to Zen Ventures Limited ("Zen") (see announcement made on 1 November 2024, summarising the terms of the Notes) (making Zen a Noteholder), the Company is also required to reorganise the Company's share capital in order to allow the Directors to allot shares deriving from the conversion of part of the Notes into New Ordinary Shares at 0.04p per New Ordinary Share.

Therefore, the Directors are proposing to sub-divide ("Sub-division") each Ordinary Share into one New Ordinary Share (of 0.035 pence each in the capital of the Company) and 9 New Deferred Shares (of 0.035 pence each in the capital of the Company).  The total nominal value of the Company's entire issued share capital remains the same following the proposed Sub-division.

It is not intended to issue new share certificate(s) to the holders of the New Ordinary Shares following the Sub-division. Existing share certificate(s) will remain valid for the same number of shares but with a different nominal value of 0.035 pence per share. The nominal value of shares already held in CREST will be updated at approximately 8.00 a.m. on 28 February 2025.

Resolution 4, which is proposed as an ordinary resolution conditional on the passing of Resolution 9, will, if passed, effect the proposed Sub-division.

The holders of the New Deferred Shares shall not, by virtue or in respect of their holdings of New Deferred Shares, have any right to receive notice of any general meeting of the Company nor the right to attend, speak or vote at any such general meeting. Save as required by law, the Company need not issue share certificates to the holders of the New Deferred Shares in respect of their holding thereof. The holders of New Deferred Shares shall not be entitled to receive any dividend or distribution and shall only be entitled to any repayment of capital on a winding up once the holders of the New Ordinary Shares have received £10,000,000 in respect of each New Ordinary Share held by them. The Company may acquire from a holder of New Deferred Shares all of their New Deferred Shares for a total price of £1.

Creating the New Deferred Shares will also require the Company's Articles to be amended (see Resolution 9 - Adoption of New Articles).

The New Ordinary Shares shall have the same rights as the Existing Ordinary Shares save as to their nominal value (as set out above). 

Resolution 5  - Directors' authority to allot shares

Section 549 of the Companies Act 2006 ("Act") stipulates that directors cannot allot shares or rights to subscribe for shares in a company (other than the shares allotted in accordance with an employees' share scheme) unless they are authorised to do so by its shareholders in general meeting. Resolution 5, which is proposed as an ordinary resolution and conditional upon Resolutions 4 and 9  being passed, seeks new authority from shareholders (to the exclusion of the previous general authority granted at last year's annual general meeting) for the Directors to allot relevant securities up to an aggregate nominal value £195,822.08  (equating to 559,491,647  New Ordinary Shares of 0.035 pence each in the share capital of the Company). 

Of 559,491,647 New Ordinary Shares to be allotted, this will comprise 69,040,053 shares to Zen reflecting the conversion of part of their existing indebtedness from the Company, the provision for an additional 250,000,000 shares to be issued in a future equity transaction and the provision for an additional authority to allot a further 50 per cent of the enlarged share capital i.e. 240,451,594 shares which may or may not be exercised.

This general authority equates to approximately 346 per cent of the nominal value of the issued share capital of the Company.

The Directors consider this authority necessary to:

1              issue and allot any shares to a Noteholder if any Notes are converted into ordinary shares in the capital of the Company (in accordance with the terms of such Notes); and

2              sufficient authority to issue additional shares so that the Directors and the Company can more readily take advantage of possible opportunities.

Unless renewed, revoked, varied or extended, this authority will expire at the conclusion of the next annual general meeting of the Company. If this authority is not granted, the Company may be in breach of the conditions of the Notes which may lead to the Company being required to repay them.

Under the terms of the Notes, a Noteholder cannot convert the Notes into more than 29.9% of the enlarged share capital of the Company. 

Resolutions 6 and 7 - Election of Directors - Paul Elliott and Pankaj Rajani

As announced on 27 January 2025, Paul Elliott and Pankaj Rajani were both appointed as Directors of the Company (the "Board") with effect from 27 January 2025. In accordance with the Articles, both Paul Elliott and Pankaj Rajani are required to each put themselves forward for election by shareholders at the first AGM following their appointment and accordingly does so at the forthcoming AGM.

Paul Elliott

Paul is a property developer and entrepreneur with over 30 years of experience in the real estate industry. Starting his career at NatWest Bank, he transitioned to property management, co-founding his own agency. Paul's keen eye for potential and strategic investments led to the development, rental, and sale of numerous properties, including commercial buildings and Victorian conversions. His portfolio boasts successful turnarounds of distressed assets.

Pankaj Rajani

Pankaj qualified as a Chartered Accountant with KPMG in 1987 and has since established an accountancy firm that delivers exceptional success for its clients. As a founding partner of Macalvins Moore in 1990, Pankaj has played a pivotal role in the firm's organic growth and the recent merger that led to the formation of today's Macalvins. Pankaj excels in Corporate Finance transactions, international trade, joint ventures, and investor relations.

Resolution 8 - Electronic Communications with Shareholders

Resolution 8 seeks to allow the Company to take advantage of the electronic communications rules contained in the Act, such rules relating to communications between companies, their shareholders and others.

Under the Act, the Company can write to Shareholders asking for their consent to receive communications via the Company's website, or by other electronic means. Such request may apply to all documents including the Company's annual financial report and accounts, notices of general meeting (including the annual general meeting), any document the Company is required to send to Shareholders under applicable law, and any documents sent pursuant to the Company's articles of association.  Any Shareholder who does not respond in 28 days of receiving such request will be deemed to have consented to the use of the website, and the use of other electronic communications means, for the purposes of receiving documents. 

The resolution, if passed, would enable the Company to use electronic communications with Shareholders as a default position by placing documents, such as the annual financial report and accounts, notices of general meeting (including the annual general meeting), on its website, rather than having to send them in hard copy, subject to, and in accordance with, the Act.  The Company will notify Shareholders by post or email, if they have not provided an email address, that any such documents are available on the website.  Shareholders can, however, still request a hard copy of such document at any time.

If this resolution is passed, the new arrangements are expected to result in potential administrative printing and postage cost savings for the Company, whilst preserving Shareholders' rights to receive hard copy documents.

Special Resolutions

Resolution 9 - Adoption of New Articles

Resolution 9, which will be proposed as a special resolution conditional on the passing of Resolution 4, seeks Shareholder approval to adopt the New Articles in order to update the Company's current Articles of Association.

The proposed amendments being introduced in the New Articles relate to the Company's proposed Sub-division and the proposed creation of the new class of New Deferred Shares (having the rights set out above) as a consequence of the proposed Sub-division. 

A summary of the rights attaching to both the New Deferred Shares and the Existing Deferred Shares are set out below:

1.    the holders of any Deferred Shares shall only be entitled to participate in the assets of the Company on a return of assets on liquidation or capital reduction or otherwise after the holders of the Ordinary Shares shall have received the sum of £10,000,000 in respect of each Ordinary Share held by them and, save as aforesaid, the holders of any Deferred Shares shall not be entitled to any participation in the profits or the assets of the Company; and

2.    none of the Deferred Shares shall carry any right to receive notice or attend or vote at any general meeting of the Company.

Notwithstanding any of the provision of these Articles, the Company shall have the power and authority at any time to purchase all or any of the Deferred Shares for an aggregate consideration of £1, which shall be applied for the benefit of the Company.

A copy of the proposed New Articles containing the proposed changes to the Existing Articles accompanies this Document.

Resolution 10 - Directors' authority to allot shares for cash

Resolution 10, which is proposed as a special resolution conditional on Resolutions 2, 4 and 9 being passed, authorises the Directors in certain circumstances to allot equity securities for cash other than in accordance with statutory pre-emption rights (which require a company to offer all allotments for cash first to existing shareholders in proportion to their holdings). The relevant circumstances are either where (i) the allotment takes place in connection with a rights issue or (ii) the allotment is limited to a maximum nominal amount of £145,327.24 (equating to 415,220,690 New Ordinary Shares of 0.035 pence each in the share capital of the Company), representing approximately 257 per cent of the nominal value of the issued ordinary share capital of the Company.  Unless renewed, revoked, varied or extended, this authority will expire at the conclusion of the next annual general meeting of the Company.

The Directors consider that the power proposed to be granted by Resolution 10 is necessary, as in addition, to allowing flexibility, this Resolution permits the Directors to non-pre-emptively issue and allot any shares to an existing Noteholder if any Notes are converted into ordinary shares in the capital of the Company (in accordance with the terms of such Notes).

3.            Outstanding Indebtedness of Zen Ventures

Following completion of this Annual General Meeting, Zen Ventures continues to hold indebtedness amounting to £284,883.98 as at the date of this circular.

4.            Annual General Meeting

Set out at page 14 of this document is a notice convening the Annual General Meeting to be held at either 10.15 a.m. on 27 February 2025 or at the conclusion of the Section 656 Meeting if later than 10.15 a.m. at the offices of Blake Morgan LLP on 6 New Street Square, London, EC4A 3DJ at which the Resolutions will be proposed.

The purpose of the Annual General Meeting is to comply with obligations under company law and to consider and, if thought fit, pass the Resolutions, as set out in full in the AGM Notice.

5.            Action to be taken

Enclosed with this Circular is a Form of Proxy for use by Shareholders. Information on the completion and return of Forms of Proxy is set out below and in the notes to the AGM Notice.

Your proxy may be submitted online by visiting www.shareregistrars.uk.com, clicking on the "Proxy Vote" button and then following the on-screen instructions (you can locate your user name and access code on the top of the proxy form), or by post by completing the enclosed Form of Proxy and returning it to the Company's Registrar, Share Registrars Limited at 3 The Millennium Centre, Crosby Way, Farnham, Surrey GU9 7XX not less than 48 hours (ignoring any part of the day that is not a working day) before the time appointed for the meeting, being 10:15 a.m. on 27 February 2025, or any adjournment thereof together with, if appropriate, the power of attorney or other authority (if any) under which it is signed or a certified copy of such power of attorney. CREST members who wish to appoint a proxy or proxies via the CREST electronic proxy appointment service should refer to the Notes of the Notice of Annual General Meeting and Form of Proxy.

As the Directors do not consider any resolution needs to be proposed at the Section 656 Meeting no further action need be taken by shareholders and no forms of proxy have been sent in relation to the Section 656 Meeting.

6.            Recommendation

The Board considers that the Resolutions (to be proposed at the AGM) are in the best interests of the Company and of its shareholders as a whole and unanimously recommend shareholders to vote in favour of them, as each of the directors intends to do in respect of his own beneficial holdings.

Yours faithfully,

James Gerald Leahy

Non-Executive Chairman

Expected timetable of principal events

All references to times in this timetable are to London times and each of the times and dates are indicative only and may be subject to change.

Terms used and not defined in this announcement shall have the same meanings given to them in the AGM Notice.

Definitions

The following definitions apply throughout the AGM Notice and in the Form of Proxy, unless the context requires otherwise: