Engyco Plans IPO

Engyco was founded by a group of industry leading individuals from the European utility and solar industries. Its intention is to offer a high dividend yield stock with significant growth prospects to its investors by rapidly building a large-scale independent electricity producing utility. This will be achieved by acquiring, on a de-geared basis, existing power-producing photovoltaic operations, initially in Spain.

Engyco is pleased to provide an update on its progress towards establishing itself as the first European listed solar power utility. Engyco intends to pursue its corporate objectives with equity funding raised from institutional investors through admission to the Official List of the London Stock Exchange. Engyco has appointed Numis Securities Limited and Ambrian Partners as advisers.

In May 2007, the Spanish Government offered a particularly attractive incentive regime establishing a feed-in tariff (RD 661/2007) offering unprecedented returns to developers for solar plants in operation before 28 September 2008. Once an RD 661 licence has been granted, off-take pricing is set for the life of an asset at full tariff for 25 years and 80 per cent. of tariff thereafter, with annual increases linked to Spanish inflation less 0.25 per cent. until 2012 and less 0.5 per cent.

The establishment of such an attractive tariff regime, together with the abundant availability of debt at the time, resulted in a very large quantity of such solar assets being built, often by owners for whom solar power is a non-core activity. In 2008 Spain accounted for half of global solar new build (around 2,500MWp) and c20 per cent. of global aggregate capacity, bringing the installed value under RD 661 to approximately €15 billion. Since the end of 2008, the cost of capital has risen sharply and Spain has experienced a collapse in its real estate, construction and property sectors. As a result, many owners of RD 661 solar assets are willing to sell these non-core assets, which provides a plentiful supply of operating solar assets for Engyco to acquire.

Engyco is progressing with its IPO and intends to raise up to €1bn in equity funding from institutional investors through admission to the Official List of the London Stock Exchange. Engyco has appointed Numis Securities Limited and Ambrian Partners as advisers. Engyco's differentiated strategy is to purchase solar assets on a de-geared basis, paying off existing project finance debt and it has in hand signed agreements with vendors of solar assets producing 86MWp for approximately €640 million. Engyco continues to pursue other opportunities to acquire additional solar assets. As Engyco's approach is to acquire assets for cash, they are seen as a preferred purchaser in the market at present. Following the acquisition of assets, Engyco intends to use the technical expertise of its board and management team to make certain operational and financing improvements, in order to improve the productivity and economic returns of the acquired assets.

John Roberts, Chairman of Engyco, commented:
"I am delighted to chair a board of such talent and experience. The opportunity that Engyco has identified is compelling and the team which has been assembled to pursue it could not be stronger. The assets which we intend to manage enjoy both favourable operating conditions and a highly attractive pricing regime. I am confident that we will be successful in achieving our objectives, including that of becoming the first UK listed solar utility."

Engyco has made a series of new appointments to its Board, which add to the wealth of industry and technical expertise already at its disposal:

Appointment of John Roberts as Non-Executive Chairman
John Roberts is one of the world's most experienced operators in the electricity industry, having worked for over 25 years in top level positions at Manweb, South Wales Electricty and Hyder, before serving as Chief Executive of United Utilities plc. He is currently a non-executive director of International Power plc and of Blackrock New Energy Investment Trust.

Appointment of Thomas Krupke as Chief Executive Officer
Thomas Krupke joined SOLON SE in 2002 and became CFO in July 2004 and Chief Executive in August 2006, a position he held until he decided to join Engyco in April 2010. SOLON is one of the leading European manufacturers of solar modules and photovoltaic power plants. It was co-founded by Engyco's Executive Vice Chairman Alexander Voigt.

Appointment of Pedro Mielgo as a Non-Executive Director
Pedro Mielgo has had a distinguished international career in the electricity industry, predominantly in Spain. As chairman of Spain's national grid company REE (Red Eléctrica de España), he led the firm through a period of international expansion and investment.

Appointment of Martin Nègre as a Non-Executive Director
Martin Nègre is a Non-Executive Director of Northumbrian Water Group plc, having served as its CEO when it was owned by Suez. He is currently the Chairman of Ecofin Global Utilities Hedge Fund Limited, an Irish Stock Exchange listed fund. He also serves on the boards of a number of funds which focus on utilities.