Cap Energy Ltd
LSE : CAPP

April 05, 2012 02:01 ET

Proposed Subscription by Global Energy Trade Limited

                                                                                               5 April 2012
                                                                                  GB00B0MH9D42/GBP/PLUS-exn
                                                     
                                            Cap Energy Limited
                                                     
                           Proposed Subscription by Global Energy Trade Limited
                                                     
               Waiver of obligations under Rule 9 of the City Code on Takeovers and Mergers
                                          Capital Reorganisation
                                         Adoption of New Articles
                             Renewal of authorities to allot and issue shares
                                                    and
                                         Notice of General Meeting

1.      Introduction

Cap  is  pleased  to  announce  that it  has reached agreement with GET whereby,  subject,  inter  alia,  to
Shareholder approval, GET will acquire the Subscription Shares at a price of 0.5p per share. Following  this
investment of GBP150,000, GET and the Proposed Directors intend that the Company should become an Investment
Vehicle  focused  on the acquisition of oil and gas exploration and production assets, principally  in  Sub-
Saharan Africa.

Shareholders are required to approve the waiver of certain obligations which would otherwise be  imposed  on
GET by Rule 9 of the City Code as a result of the issue to them of the Subscription Shares. The Subscription
is also conditional, inter alia, upon the Company obtaining approval from Shareholders to grant authority to
the Board to allot the Subscription Shares and to disapply pre-emption rights which would otherwise apply to
the allotment of the Subscription Shares. The Subscription is also conditional upon Admission.

As a condition of the Subscription, the Company is also required by GET to unwind the Company's relationship
with  CSV  through  the cancellation of the Loan Notes held by CSV, the disposal of Cap USA  to  CSV  for  a
nominal sum and the transfer of the CSV Shares to the EBT.

In  addition, at the request of GET, the holders of the Loan Notes, other than CSV, have agreed, subject  to
Admission, to the cancellation of their Loan Notes in exchange for the issue of New Ordinary Shares. CSV has
agreed to the cancellation of the Loan Notes held by it without compensation.

The  Capital  Reorganisation  is  being undertaken to ensure that the Company  has  an  appropriate  capital
structure on completion of the Proposals and the Directors are also proposing to adopt the New Articles.

A  circular  to  Shareholders containing further information about the Proposals  and  convening  a  General
Meeting  of  the  Company  to  be  held at 11.00 a.m.  on 1 May 2012,  at  which  the  Directors  will  seek
Shareholders' approval for the Resolutions, is being posted to Shareholders today.

2.      Background

Cap  was  established  to invest in oil and gas exploration and production focused on  North  America.   The
Company  was admitted to the PLUS-quoted Market on 18 October 2005.  On 27 December 2008, Cap's wholly-owned
subsidiary, Cap USA, completed the acquisition from CSV of interests in Stark's Dome, a producing  oilfield,
and  Iberia  Dome,  a  non-producing gas/condensate field, in southern Louisiana.  The  interests  purchased
comprised  a  25  per cent. working interest in seven producing wells and three wells that were  due  to  be
completed  and put on production; the right to take a 25 per cent. working interest at cost in five  further
infill  wells on the cap of the salt dome; and the right to take a 25 per cent. working interest at cost  in
any further wells drilled on CSV's lease or within certain other agreed areas.

In  October 2009, Cap raised GBP507,490 through the issue of the Loan Notes. The proceeds of the Loan Notes
were  principally used to fund the final consideration due to CSV for the acquisition of Stark's  Dome  and
Iberia  Dome.  CSV is currently interested in 2,615,464 Existing Ordinary Shares representing approximately
29  per cent. of the Issued Share Capital and also holds GBP268,740 nominal of the Loan Notes. CSV retained
a  majority interest in the oilfields and was responsible for their management. Following completion of the
acquisition,  a  work  programme commenced to place the three uncompleted oil wells on  production  and  to
recomplete old oil wells on the Stark's Dome field.

In January 2010, Cap announced that CSV had encountered major problems with the salt water disposal well at
Stark's Dome, which was essential for the field to be able to operate fully.  As a result, output from  the
fields in which Cap had an interest was severely reduced.  Despite several attempts to rectify the problems
at  the  oilfields, production levels remained minimal.  By the end of 2010, Stark's Dome and  Iberia  Dome
were  the  only remaining production interests owned by Cap and, as these interests had failed to  generate
the expected revenues, Cap was required to seek alternative funding.

Cap was unable to secure alternative funding and on 18 August 2011 the Company requested that trading in the
Existing  Ordinary  Shares  on the PLUS-quoted Market be suspended pending clarification  of  the  Company's
financial position. Trading in the Existing Ordinary Shares remains suspended.

On  17  February  2012,  Cap announced that it had signed Heads of Agreement with investors  to  inject  new
capital into the Company and to change the Company's strategic direction.

3.      The Subscription

GET is proposing to subscribe for the Subscription Shares at a price of 0.5p per share and to transform the
Company  into  an Investment Vehicle focused on the acquisition of oil and gas exploration  and  production
assets,  principally  in  Sub-Saharan Africa. The proceeds of the Subscription will  amount  to  GBP150,000
(gross of any expenses).  Approximately GBP42,000 of the proceeds will be used to pay certain creditors  of
the  Company; the balance will provide working capital to cover costs incurred by the Company in  executing
its  strategy  as  an Investment Vehicle.  GET has agreed to make a further GBP100,000  available  for  the
exclusive use of the Company, if and when additional funds are required.

GET  has  also agreed to pay the transaction costs of implementing the Proposals amounting to approximately
GBP60,000.

The  funds for the Subscription and to meet the other costs referred to above have been provided to GET  by
Lina  Haidar,  Pat  Rocholl, and Alex Haly. Lina Haidar is a director of and shareholder  in  GET  and  Pat
Rocholl and Alex Haly are shareholders in GET, as set out in paragraph 10 below.

As  a  condition  of  the  Subscription,  the Company is required, amongst  other  things,  to  unwind  its
relationship with CSV, cancel the Loan Notes and effect the Capital Reorganisation. Further information  on
each of these proposals is set out below. The Proposals are all conditional on Admission.

The Directors believe that, without the proceeds of the Subscription, there may be no alternative other than
to resolve to put the Company into liquidation.

4.      Arrangements with CSV

As referred to in paragraph 2 above, Cap acquired Stark's Dome and Iberia Dome from CSV in 2008. To satisfy
one of the conditions of the Subscription, CSV and the Company have agreed, subject to Admission, that:

    *   CSV will cancel the GBP268,740  nominal  of  Loan  Notes  held by it and waive any accrued interest
        thereon for no consideration;
        
    *   Cap will sell the entire issued share capital of Cap USA to CSV for a nominal consideration of USD1;
        and
    *   CSV  will  transfer  the CSV  Shares  to Cap Energy Trustees Limited, as trustee of the EBT, for  a
        nominal consideration of GBP1.
        
Due to the persistent operating difficulties at Stark's Dome and Iberia Dome, the Directors believe that it
is  in  the best interests of Shareholders that these assets, which are held by Cap USA, should be sold  to
allow  the Company to proceed as an Investment Vehicle. They also believe that it is appropriate for  CSV's
interest in the Loan Notes and the CSV shares to be cancelled. CSV has agreed that the name of Cap USA will
be changed as soon as possible following Admission.

CSV  has undertaken to vote the CSV shares, which represent approximately 29 per cent. of the Issued  Share
Capital, in favour of the Resolutions at the General Meeting.

5.      Loan Notes and Other Creditors

Loan Notes
At  the request of GET, all of the holders of the Loan Notes (other than CSV whose Loan Notes will be dealt
with  in  accordance with paragraph 4 above) have agreed, conditional on Admission, to the cancellation  of
their Loan Notes in consideration for the issue of New Ordinary Shares.

The New Ordinary Shares to be issued on cancellation of the Loan Notes will be allotted on the basis of  32
New  Ordinary  Shares for every GBP1 nominal of Loan Notes held. On the assumption that  the  New  Ordinary
Shares are valued at par value (0.5 pence per share), the ratio set out above is equivalent to a payment of
16 pence per GBP1 nominal of Loan Notes.

The  Loan Note holders have also agreed to waive their entitlement to accrued, unpaid interest on the  Loan
Notes.

Tim  Hearley  and  John  Killer,  Directors of the Company, hold  GBP3,500  and  GBP13,000  of  Loan  Notes
respectively and have each undertaken, subject to Admission, to cancel all of the Loan Notes held  by  them
and to waive their rights to accrued interest thereon.

On Admission, a total of 7,640,000 New Ordinary Shares will be allotted to former holders of the Loan Notes
as consideration for the cancellation of the Loan Notes. Of these New Ordinary Shares, Tim Hearley and John
Killer will receive 112,000 and 416,000 New Ordinary Shares respectively.

Other Creditors
Approximately GBP42,000 of the proceeds of the Subscription will be applied to repay certain  creditors  of
the  Company  in  cash. This amount includes payments totalling GBP5,272 to Tim Hearley,  John  Killer  and
another officer of the Company as a contribution towards outstanding fees and salaries owed to them by  the
Company.

The remaining amounts owed by the Company to Directors and other creditors are proposed to be satisfied  by
the  allotment  of New Ordinary Shares at a rate equivalent to 9 pence for each GBP1 owed by  the  Company.
Under  these  arrangements,  Tim Hearley and John Killer will receive a further  314,584  and  315,900  New
Ordinary Shares respectively.

On  Admission,  a  total of 1,240,144 New Ordinary Shares will be allotted in settlement of  the  Company's
outstanding creditors.

6.      Capital Reorganisation

The  Capital Reorganisation, which is conditional on the Resolutions being passed, will take place  in  two
stages:

    *   Firstly, every  10  Existing  Ordinary Shares will be consolidated into one Interim Ordinary Share.
        (Interim Ordinary Shares will  not be  held by Shareholders but are an integral part of the Capital
        Reorganisation process) (the "Consolidation").
             
    *   Secondly, each Interim Ordinary Share will be sub-divided into 1 New Ordinary Share and 9 Deferred
        Shares (the "Sub-division").
             
The  Consolidation  will give rise to Fractions where a Shareholder's total holding  of  Existing  Ordinary
Shares  is  less  than 10 or is not exactly divisible by 10 at the Record Date. Fractions of  New  Ordinary
Shares will not be allotted. Shareholders who hold less than 10 Existing Ordinary Shares will therefore not
receive New Ordinary Shares under the Proposals.

The  effect  of the Capital Reorganisation will be to convert the 8,797,372 Existing Ordinary  Shares  into
879,723 New Ordinary Shares, approximately 10 per cent. of the number of Existing Ordinary Shares.

The  table  below gives some examples of the effect of the Capital Reorganisation on specific shareholdings
of Existing Ordinary Shares:

    Number of Existing Ordinary Shares                New Ordinary Shares issued
                        9                                        NIL
                       10                                         1
                       25                                         2
                       39                                         3
                       87                                         8
                      100                                        10


Pursuant to the New Articles, the Deferred Shares created by the Capital Reorganisation will be effectively
valueless  as  they will not carry any voting rights or dividend rights. In addition, holders  of  Deferred
Shares  will  only be entitled to a payment on a return of capital or on a winding up of the Company  after
each of the holders of New Ordinary Shares have received a payment of GBP10,000,000 on each such share. The
Deferred Shares will not be listed or traded on PLUS and will not be transferable without the prior written
consent  of  the Board. No share certificates will be issued following the Capital Reorganisation  for  the
Deferred Shares. In addition, the Board may appoint any person to act on behalf of all the holders  of  the
Deferred  Shares  to  procure the transfer all such shares back to the Company  (or  its  nominee)  for  an
aggregate consideration of 1 penny.

7.      Directors

It  is proposed that John Killer and Clair Opsal will resign as Directors of the Company on Admission.  Tim
Hearley will remain with the Company as non-executive Chairman and the Proposed Directors, Lina Haidar  and
Pat  Rocholl,  will be appointed as executive Directors on Admission. Further information on  the  Proposed
Directors is set out in paragraph 10 below.

8.      Investment Vehicles
        
If  the Proposals are approved, the Company will become an Investment Vehicle, which is defined in the PLUS
Rules as:


"An  issuer  whose actual or intended principal activity is to invest in the securities of other businesses
(whether  publicly  traded  or  not),  or to acquire a particular business,  in  accordance  with  specific
investment criteria."

As  an  Investment Vehicle, any substantial acquisition or investment in accordance with of the  investment
strategy  set out in paragraph 9 below is likely to be treated as a reverse takeover under the  PLUS  Rules
and will therefore be subject to, inter alia, Shareholders' approval.

Shareholders should be aware that an investment in an Investment Vehicle should be regarded as long term in
nature, as it may take some time for such a company to fully implement its investment strategy.

9.      Proposed Investment Strategy
        
The  Proposed  Directors  intend that the Company's investment strategy will  focus  on  the  oil  and  gas
exploration and production sector, predominantly in Sub-Saharan Africa. The Proposed Directors believe that
Sub-Saharan Africa is a particularly promising area for hydrocarbon prospecting and that the relatively low
cost  of  acquiring  licences  in  the  region and its geology make the  region  an  attractive  investment
proposition.  Furthermore, the Proposed Directors believe that their experience  across  a  wide  range  of
industries  in the region, particularly in the oil and gas sector, will enable them to identify appropriate
investment opportunities for the Company.

Investments will be strictly determined by criteria including, inter alia, a stable economy, the prevailing
rule  of law, minimal regulations regarding the export of capital and no currency constraints. The business
(or  businesses)  which the Company invests in or acquires will, it is envisaged, meet  certain  conditions
which, the Proposed Directors believe, will best position the Company to maximise Shareholder value.

The  investment  opportunities which the Proposed Directors intend to focus  on  will  meet  the  following
principal criteria:

    *   they  will  be  ready  for investment without the need for material re-structuring by  the Company;
    *   geological  data  will be available confirming the potential  presence of hydrocarbons in the area;
    *   they   will  be  in  areas  where  oil  and gas are already being  produced,  such  that  necessary
        infrastructure is in place;
    *   they will be able to benefit from the Proposed Directors' existing network of contacts; and
    *   they will have the potential to deliver significant returns for the Company.
    
However,  these  criteria  are not intended to be definitive or exhaustive and  the  Company  may  make  an
investment which does not fulfil any or all of the investment criteria if the Board believes it is  in  the
best  interests  of Shareholders as a whole. Any acquisition of a company would be put to Shareholders  for
their approval at the appropriate time.

The  Proposed Directors envisage that investments made by the Company will be long term and do  not  intend
that the Company should exit for the foreseeable future once any investment is made.

The Proposed Directors believe that their broad collective experience together with their extensive network
of  contacts  will  assist  them in the identification, evaluation and funding  of  appropriate  investment
opportunities. When necessary, other external professionals will be engaged to assist in the due  diligence
on  prospective  targets and their management teams. The Proposed Directors will also  consider  appointing
additional directors with relevant experience if required.

The  Proposed Directors recognise the investment strategy outlined above carries a certain degree of  risk.
However,  they  believe  that the successful implementation of such an investment strategy  may  result  in
strong capital growth for Shareholders.

The Company may seek to raise additional funding either prior to or at the same time as the Company carries
out  any  substantial  acquisition or investment. The Company may also seek admission  to  AIM  or  another
appropriate market in conjunction with any substantial acquisition or investment.

The  Proposed  Directors will not draw any remuneration from the Company in cash  until  such  time  as  an
investment  or acquisition is made and all expenditure by the Company will be kept to a minimum until  that
stage  is  reached. At that time, the remuneration of the Board will be reviewed and suitable  remuneration
arrangements shall be agreed with the Board and any new persons appointed to the Board. In the  intervening
period,  the  Board  will accrue entitlement to remuneration, but this will only become  payable  once  the
Company  has raised GBP2.0 million or more from an issue of Ordinary Shares. Any accrued remuneration  will
be  settled by the issue of Ordinary Shares or in cash or a combination of Ordinary Shares and cash, at the
option of the Board member.

As  referred to in paragraph 3 above, the cash held by the Company on Admission will principally be used to
cover  costs incurred by the Company in identifying potential acquisitions and investments. Operating costs
will  be maintained at the minimum level consistent with the Company's status as a publicly quoted company.
The  Company  will  not  acquire  premises of its own or engage any full-time  employees  before  making  a
significant investment or acquisition.

If  the  Company  fails to complete any acquisition or investment as outlined above within 12  months  from
Admission, the Board will seek Shareholders' approval for the further pursuit of its investment strategy.

10.     Information on GET and the Proposed Directors

GET is a private limited company incorporated in the British Virgin Islands with registered number 1601997,
whose registered address is PO Box 71, Road Town, Tortola, British Virgin Islands. GET was incorporated  on
24  October  2010,  has not traded and, as permitted by the law of the British Virgin  Islands,  has  never
published financial accounts.

GET  has no assets other than approximately GBP300,000 in cash. The impact of the Subscription on GET  will
be to reduce its cash resources.

The shareholders of GET are as follows:

Lina Haidar (age 45) - proposed Chief Executive Officer

Lina  Haidar  is a Nigerian citizen, with an extensive portfolio of business and charitable  interests.  In
1991,  Ms.  Haidar  founded OEP Nigeria Ltd ("OEP"), a company which is now a leading provider  of  turnkey
office,  residential accommodation and housing development solutions in Nigeria. OEP's clients include  the
Nigerian  government, blue chip companies in the oil and gas, construction and communications  sectors  and
high  net worth families. From 2004 to 2011, Ms. Haidar was responsible for financial and corporate affairs
at  GMT  Limited,  a company which she co-founded and which provides IT solutions and logistics  throughout
West Africa. Ms Haidar graduated from the University of Monaco with an MBA in 2007. Ms. Haidar is an active
supporter  of charities and is currently the ambassador of the Monaco and France division of the  Wellbeing
Foundation Africa. Ms. Haidar is also the sole director of GET.

Patrick (Pat) Rocholl (age 54) - proposed Chief Financial Officer

Pat  has  extensive experience in operational financial and commercial roles within the oil and gas sector,
extending to corporate advisory roles in Mergers and Acquisitions.  Pat was Finance Director at Chariot Oil
&  Gas  Limited in the run up to that company's AIM flotation in May 2008 and was responsible for  managing
the  delivery of its work programme on a timely and innovative basis and significantly within budget.  From
2006  to  2007  Pat  was the Director responsible for Mergers and Acquisitions at Calash Limited  after  an
extended  career in senior finance positions at both Schlumberger and Halliburton. Pat is also currently  a
director of Pygmalion Consulting Limited, HiCog Energy Limited and Giles Rocholl Photography Ltd.

Alexander (Alex) Haly (age 29)

Alex  is the founder and Managing Director of Petroserve Holding BV, an operator of offshore supply vessels
with  a  number  of contracts with major oil industry participants in Congo and Cameroon and  an  expanding
footprint in the West African Region. Alex is also a director of World Natural Resources Limited.

The interests of Lina Haidar, Pat Rocholl and Alex Haly in GET are as follows:

                              Number of shares in GET                    %
                                                                       
Lina Haidar                          8,335                             16.67
                                                                       
Pat Rocholl                          8,335                             16.67
                                                                       
Alex Haly                           33,330                             66.66
                                                                       
None of GET, Lina Haidar, Pat Rocholl or Alex Haly has any interest in the Existing Ordinary Shares.

On  Admission,  Lina Haidar will become Chief Executive of the Company and Pat Rocholl  will  become  Chief
Financial Officer of the Company.

The  Proposed  Directors intend that the Company will become an Investment Vehicle following completion  of
the  Proposals.  On Admission, the registered office of the Company will be changed to 5th Floor, 1 Warwick
Road,  London SW1E 5ER. Until such time as the Company completes a significant acquisition, the  registered
office will be the Company's principal place of business.

If  the  Proposals  are  implemented in full, GET will be the beneficial owner of 30,000,000  New  Ordinary
Shares, representing 75.45 per cent. of the Enlarged Issued Share Capital. The acquisition of this interest
would,  in  the  absence of the Waiver, give rise to an obligation on GET to make a general  offer  to  all
Shareholders under Rule 9 of the Takeover Code.

As  set out in paragraph 3 above, the Directors believe that if the Subscription is not made, there may  be
no alternative other than to resolve to put the Company into liquidation.  GET is only prepared to make the
Subscription  on the basis that it will not be obliged to make a general offer to acquire all the  Existing
Ordinary  Shares  under the Takeover Code. Moreover, the Directors would not be prepared to  recommend  the
Proposals in circumstances which would lead to GET becoming obliged to make such a general offer.

Accordingly,  the Directors are seeking Shareholders' approval for GET to acquire 30,000,000  New  Ordinary
Shares, representing 75.45 per cent. of the Enlarged Issued Share Capital, without triggering a requirement
for GET to make a mandatory cash offer for the Company under Rule 9 of the Takeover Code.

11.     The Takeover Code
     
The terms of the Subscription give rise to certain considerations under the Takeover Code. Brief details of
the Panel, the Takeover Code and the protection they afford are given below.

The  purpose  of  the Takeover Code is to supervise and regulate takeovers and other matters  to  which  it
applies.  The Takeover Code is issued and administered by the Panel. The Company is a company to which  the
Code  applies and, as such, Shareholders are therefore entitled to the protections afforded by the Takeover
Code.

Under  Rule 9 of the Takeover Code, where any person acquires, whether by a single transaction or a  series
of transactions over a period of time, an interest (as defined in the Takeover Code) in shares which (taken
together with shares in which persons acting in concert with him are interested) carry 30 per cent. or more
of  the  voting rights of a company which is subject to the Takeover Code, that person is normally required
by the Panel to make a general offer, in cash, to all the remaining shareholders to acquire their shares.
        
Rule  9 of the Takeover Code further provides that, inter alia, where any person who, together with persons
acting in concert with him, is interested in shares which in aggregate carry not less than 30 per cent.  of
the  voting  rights of a company but does not hold shares carrying more than 50 per cent.  of  such  voting
rights  and  such person, or any such person acting in concert with him, acquires an interest in additional
shares which increase his percentage of shares carrying voting rights, such person is normally required  by
the Panel to make a general offer to the remaining shareholders to acquire their shares.
        
An offer under Rule 9 must be made in cash and at the highest price paid by the person required to make the
offer  or  any person acting in concert with him, for any interest in shares of the company during  the  12
months prior to the announcement of the offer.

If the Proposals are implemented in full, the percentage interest of GET in the Company will be as follows:

                  New Ordinary Shares held                   % of Enlarged Issued Share Capital
                                                             
GET               30,000,000                                 75.45
                                                             
If  the  Proposals  are implemented in full, GET will hold more than 50 per cent. of the  Company's  voting
share  capital  and  may  accordingly  be able to increase its shareholding  without  incurring  a  further
obligation under Rule 9 of the Takeover Code to make a general offer.

The  Panel has agreed, subject to the approval of Shareholders on a poll at the General Meeting,  to  waive
the obligation for GET to make a general offer under Rule 9 of the Takeover Code that would otherwise arise
as a result of the Subscription.

Accordingly, Resolution 1 is being proposed at the General Meeting and will be taken on a poll. The Company
has  received  an  irrevocable  undertaking from CSV in respect  of  2,615,464  Existing  Ordinary  Shares,
representing  approximately  29  per cent. of the Issued Share Capital,  to  vote  in  favour  of  all  the
Resolutions at the General Meeting.

Following  completion of the Proposals, if GET's holding in the Company is reduced  at  any  point  in  the
future  to  less than 50 per cent., whilst GET remains interested in 30 per cent. or more of the  Company's
voting share capital, any subsequent increase in GET's interest in Ordinary Shares would be subject to Rule
9 of the Takeover Code.
        
12.     Financial information on the Company

The  Company's audited results for the year ended 31 December 2011 were announced today. These results show
that the Company made a loss of GBP101,691 (2010: loss of GBP553,761) on nil revenue (2010: GBP4,641).

Certain  financial information relating to the Company is available as set out in Part IV of the  Circular.
The  financial  information comprises the Company's annual report and accounts for the two years  ended  31
December  2010  and  2011, which are being posted to shareholders today. A notice convening  the  Company's
Annual General Meeting in respect of the year ended 31 December 2011 will be posted to shareholders in  due
course.

13.     Adoption of New Articles

The  Company is proposing to adopt new articles of association in line with the provisions of the Companies
Act.   The  New Articles will reflect current corporate practice and, amongst other things, allow  for  the
creation of the Deferred Shares as part of the Capital Reorganisation. A summary (which does not purport to
be  complete  or  exhaustive) of the rights attaching to the New Ordinary Shares as  set  out  in  the  New
Articles is set out in Part V of the Circular.

The  Directors also intend to re-register the Company as a public limited company after the Proposals  have
been completed, as they believe that conversion to plc status will enhance the Company's credibility as  an
Investment Vehicle. Adoption of the New Articles will facilitate the intended re-registration.

14.     Application to PLUS

Application will be made for the New Ordinary Shares arising from the Proposals to be admitted  to  trading
on  the  PLUS-quoted Market. It is expected that the Company's' trading facility on the PLUS-quoted  Market
will be restored and that dealings in the New Ordinary Shares will commence on 3 May 2012.

All  the New Ordinary Shares will, on Admission, rank pari passu in all respects and will rank in full  for
all dividends and other distributions hereafter declared, paid or made on the ordinary share capital of the
Company.

15.     CREST and Share Certificates

CREST  is  a  paperless settlement system enabling securities to be evidenced otherwise than by certificate
and transferred otherwise than by written instrument in accordance with the CREST Regulations. The Articles
and  the New Articles permit the Company to issue shares in uncertificated form and the New Ordinary Shares
will be admitted to CREST.

It is expected that New Ordinary Shares will be credited to Shareholders' CREST accounts on 3 May 2012.

CREST is a voluntary system and shareholders who wish to receive and retain share certificates will be able
to  do  so.   However, certificates representing Existing Ordinary Shares will no longer be valid following
Admission. Certificates in respect of New Ordinary Shares are expected to be posted to Shareholders  on  11
May 2012.

16.     Options and the EBT

Options  granted  to the Directors over a total of 870,000 Existing Ordinary Shares will  be  cancelled  on
Admission.  Subject to Admission, the Company has established the EBT, which in due course may be  used  by
the Board to provide appropriate share based incentives to senior management of the Company.

On  Admission,  the EBT is expected to be interested in 256,546 New Ordinary Shares, representing  0.6  per
cent.  of  the  Enlarged Issued Share Capital. The EBT's shareholding comprises Ordinary Shares  previously
held by CSV.

17.     Lock-in Agreement
        
Conditional on Admission, GET has signed a lock-in agreement with the Company and St Helens Capital whereby
it  agrees  that, except in certain circumstances specified in the agreement, it will not  dispose  of  any
interest in the Subscription Shares for a period of 12 months following Admission. A summary of the Lock-in
Agreement is set out in paragraph 3.4 of Part III of the Circular.

18.     General Meeting
        
A  notice convening a General Meeting of the Company to be held at 11.00 a.m. on 1 May 2012 is set  out  at
the end of the Circular.

At the General Meeting, resolutions will be proposed as follows:

Ordinary Resolutions

Resolution 1         to approve the Waiver

Resolution 2         to authorise the Directors to allot New Ordinary Shares pursuant  to  section 551  of 
                     the  Act for  the purposes of, amongst other things, the Subscription, the  Loan Note 
                     Conversion and the Debt Capitalisation
                     
Special Resolutions
                     
Resolution 3         to approve the Capital Reorganisation

Resolution 4         to adopt the New Articles

Resolution 5         to  authorise  the  Directors  to  allot  New  Ordinary  Shares  for  cash, free  from 
                     pre-emption  rights,  pursuant to section 570 of the  Act  for  the  purposes  of  the
                     Subscription,  the Loan Note Conversion and the Debt Capitalisation and  otherwise  up
                     to an aggregate number of 3,900,000 New Ordinary Shares.
                     
19.     Recommendation

The  Directors,  who have been so advised by St Helens Capital, consider the Proposals to be  in  the  best
interests  of the Company and Shareholders as a whole.  In giving its advice, St Helens Capital  has  taken
into account the Directors' commercial assessments.

Accordingly, the Directors unanimously recommend that Shareholders vote in favour of all of the Resolutions
to  be  proposed  at  the  General Meeting, as the Directors intend to do in respect  of  their  beneficial
holdings amounting, in aggregate, to 320,167 Existing Ordinary Shares, representing 3.64 per cent.  of  the
Issued Share Capital.

Enquiries
Cap Energy Limited
John Killer, Managing Director
Tel: 07979 903673

St Helens Capital Partners LLP
Mark Anwyl or Duncan Vasey
Tel: 020 7368 6959


EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Publication of the Circular                                                                     5 April 2012
                                                                                                            
Record date for the Consolidation                                                 5.30 p.m. on 27 April 2012
                                                                                                            
Latest time and date for receipt of Forms of Proxy                               11.00 a.m. on 29 April 2012

General Meeting                                                                     11.00 a.m. on 1 May 2012
                                                                        
Admission                                                                                         3 May 2012
                                                                                                            
New Ordinary Shares credited to CREST accounts                                                    3 May 2012

Definitive share certificates for New Ordinary Shares dispatched                                 11 May 2012

DEFINITIONS

The following definitions apply throughout this Announcement, unless the context requires otherwise:

"Act" or the "Companies Act"               the Companies Act 2006, as amended
                                           
"Admission"                                admission  of the New Ordinary Shares to trading on  the  PLUS-
                                           quoted Market, which is expected to take place on 3 May 2012
                                           
"AIM"                                      the AIM market of the London Stock Exchange
                                           
"Allotment Authorities"                    the  authorities being sought at the General Meeting  to  allow
                                           the Directors to allot and issue New Ordinary Shares
                                           
"Announcement"                             this announcement dated 5 April 2012

"Articles"                                 the existing articles of association of the Company
                                           
"Board"                                    the Board of Directors of the Company from time to time
                                           
"Business Day"                             means a day other than a day which is a Saturday, a Sunday or a
                                           public holiday in England
                                           
"Cap" or the "Company"                     Cap  Energy Limited, a limited company incorporated in  England
                                           and Wales with registered number 05351398
                                           
"Capital Reorganisation"                   the proposed Consolidation and Sub-division
                                           
"Cap USA"                                  Cap  Energy  USA,  Inc.,  the wholly owned  subsidiary  of  the
                                           Company
                                           
"certificated" or                          where  a security is not held in uncertificated form (i.e.  not
"in certificated form"                     in CREST)
                                           
"Circular"                                 the circular to Shareholders dated 5 April 2012

"Consolidation"                            the  proposed  consolidation of every 10  issued  and  unissued
                                           Existing Ordinary Shares into 1 Interim Ordinary Share
                                           
"CREST"                                    the  relevant  system (as defined in the CREST Regulations)  in
                                           respect of which Euroclear is the Operator (as defined  in  the
                                           CREST Regulations)
                                           
"CREST Regulations"                        the Uncertificated Securities Regulations 2001 (SI 2001/3755)
                                           
"CSV"                                      CSV  Holdings, Inc., a Colorado Corporation with its  principal
                                           offices  at  310 S. St Mary's Street, Suite 1515, San  Antonio,
                                           Texas 78205
                                           
"CSV Shares"                               the  2,565,464  Existing Ordinary Shares  held  by  CSV  (which
                                           excludes   50,000  Existing  Ordinary  Shares  which   CSV   is
                                           transferring  to  a third party), which will be transferred  to
                                           the EBT in the form of 256,546 New Ordinary Shares on Admission
                                           
"Debt Capitalisation"                      means  the capitalisation of certain debts of the Company  into
                                           New  Ordinary Shares, details of which are set out in paragraph
                                           5 of this Announcement
                                           
"Deferred Shares"                          deferred  shares of 0.5p each in the Company arising  from  the
                                           Capital Reorganisation and having the rights set out in the New
                                           Articles
                                           
"Directors"                                the directors of the Company at the date of this Announcement
                                           
"EBT"                                      The Cap Energy Employee Benefit Trust
                                           
"Enlarged Issued Share Capital"            the issued share capital of the Company on Admission
                                           
"Existing Ordinary Shares"                 existing issued and unissued ordinary shares of 0.5 pence  each
                                           in the capital of the Company
                                           
"Euroclear"                                Euroclear UK & Ireland Limited, the operator of CREST
                                           
"Form of Proxy"                            the  form  of proxy for use by Shareholders in connection  with
                                           the General Meeting
                                           
"Fractions" or  "Fractional                those  fractions  of Interim Ordinary Shares  arising  where  a
Entitlements"                              Shareholder's total holding of Existing Ordinary Shares is less
                                           than 10 or is not exactly divisible by 10 at the Record Date
                                           
"FSMA"                                     the Financial Services and Markets Act 2000 (as amended)
                                           
"General Meeting"                          the  general meeting of the Company (or any adjournment of such
                                           meeting) convened for 11.00 a.m. on 1 May 2012, notice of which
                                           is set out at the end of the Circular
                                           
"GET"                                      Global   Energy  Trade  Limited,  a  private  limited   company
                                           incorporated  in  the  British Virgin Islands  with  registered
                                           number 1601997
                                           
"Group"                                    the Company and its subsidiary, Cap USA
                                           
"Interim Ordinary Shares"                  the ordinary shares of 5p each arising from the Consolidation
                                           
"Investment Vehicle"                       shall have the meaning as set out in the PLUS Rules
                                           
"Issued Share Capital"                     the  issued share capital of the Company as at the date of this
                                           Announcement
                                           
"Loan Notes"                               the  GBP507,490 8% Convertible Unsecured Loan Notes 2012 of the
                                           Company
                                           
"Loan Note Conversion"                     the  conversion  of  the Loan Notes into New  Ordinary  Shares,
                                           details   of  which  are  set  out  in  paragraph  5  of   this
                                           Announcement
                                           
"New Articles"                             the new Articles of Association of the Company to be adopted at
                                           the General Meeting
                                           
"New Ordinary Shares                       new  ordinary shares of 0.5p each to be issued pursuant to  the
                                           Proposals and having the rights set out in the New Articles
                                           
"Notice of Meeting"                        the  notice  of  General Meeting set out  at  the  end  of  the
                                           Circular
                                           
"Official List"                            the Official List of the UK Listing Authority

"Options"                                  the  options to subscribe for Ordinary Shares issued to certain
                                           Directors in  2009
                                           
"Ordinary Shares"                          ordinary shares of 0.5p each in the Company
                                           
"Panel"                                    the Panel on Takeovers and Mergers
                                           
"PLUS-quoted Market" or "PLUS"             the  primary  market for unlisted securities operated  by  PLUS
                                           Stock Exchange plc
                                           
"PLUS Rules"                               the  PLUS  Rules  for  Issuers, which  set  out  the  admission
                                           requirements  and  continuing obligations of companies  seeking
                                           admission to PLUS and whose shares have been admitted to PLUS
                                           
"Proposals"                                the  Subscription, the Waiver,  the Capital Reorganisation, the
                                           adoption of the New Articles and the Allotment Authorities
                                           
"Proposed Directors"                       Lina Haidar and Patrick Horst Rocholl
                                           
"Record Date"                              5.30 p.m. on 27 April  2012
                                           
"Register"                                 the register of shareholders of the Company
                                           
"Resolutions"                              the  resolutions  set  out in the Notice  and  a  reference  to
                                           "Resolution" shall be construed accordingly
                                           
"Shareholders"                             holders of Ordinary Shares
                                           
"SLC Registrars"                           a  division of David Venus & Company Limited and the  Company's
                                           Registrars
                                           
"St Helens Capital"                        St   Helens  Capital  Partners  LLP  which  is  authorised  and
                                           regulated  by  the Financial Services Authority  and  which  is
                                           acting  as  Rule 3 Adviser to the Directors in accordance  with
                                           the Takeover Code
                                           
"Sub-division"                             the proposed sub-division of each Interim Ordinary Share into 1
                                           New Ordinary Share and 9 Deferred Shares
                                           
"Subscription"                             the  proposed  subscription by GET for 30,000,000 New  Ordinary
                                           Shares at a price of 0.5p per share
                                           
"Subscription Agreement"                   the  agreement dated 4 April  2012 between the Company and  GET
                                           relating to the Subscription
                                           

"Takeover Code"                            the City Code on Takeovers and Mergers
                                           

"uncertificated"  or                       recorded  on  the register of members of the Company  as  being
"in  uncertificated   form"                held  in  uncertificated form in CREST and title to  which,  by
                                           virtue of the CREST Regulations, may be transferred by means of
                                           CREST
                                           
"UKLA"                                     the  Financial Services Authority acting in its capacity as the
                                           competent authority for listing in the UK
                                           
"United Kingdom" or "UK"                   the United Kingdom of Great Britain and Northern Ireland
                                           
"Waiver"                                   the  waiver by the Panel, conditional upon the passing  of  the
                                           Waiver Resolution, of the obligation on GET to make a mandatory
                                           offer under Rule 9 of the Takeover Code
                                           
"Waiver Resolution"                        the  ordinary resolution to be held on a poll for  approval  of
                                           the Waiver set out in the Notice as Resolution 1
                                           
"GBP"                                      UK pounds sterling
                                           
"USD"                                        US dollars


The Directors of Cap Energy Limited are responsible for the contents of this announcement.



Contact Information

  • Cap Energy Ltd