Statement re Notice of General Meeting Thomson Reuters

METROELECTRIC PLC
("Metroelectric" or the "Company")

Notice of General Meeting

 Metroelectric announces that notice has been sent to Shareholders convening a General Meeting of the Company to be held at 11 a.m. on, 30 April 2014 at 31 Lombard Street, London, EC3V 9BQ.

 A summary of the resolutions to be proposed at the meeting is set out below:

Resolution 1 will be proposed as an ordinary resolution, seeks approval for the Debt Conversion;

Resolution 2 will be proposed as an ordinary resolution, seeks approval for the proposed new Investment Strategy; and

Resolution 3 will be proposed as a special resolution, seeks approval to change the name of the Company to Welney Plc.

The Directors of the Company accept responsibility for this announcement.

--ENDS--

Enquiries:

Metroelectric Plc
Greg Collier
Tel:  078 3018 2501

Peterhouse Corporate Finance Limited
Fungai Ndoro and Eran Zucker
Tel:  020 7469 0934

The text below has been extracted without material adjustment from the circular that has been posted to Shareholders today (the "Circular"). Capitalised terms used but not otherwise defined in this announcement shall have the meanings ascribed to them in the Circular.

Introduction

 I am writing this letter to provide Shareholders with the background to and the reasons for the proposed Debt Conversion, the adoption of the Investment Strategy and the change of name and to explain why I believe these proposals to be in the best interests of the Company and Shareholders as a whole and why Shareholders should vote in favour of the Resolutions at the General Meeting. Greg Collier and Mark Chapman, both of whom are Directors, are interested in the Debt Conversion as creditors of the Company. Accordingly, they will not be recommending the resolution relating to the Debt Conversion. The Company is proposing to transfer its interest in Powabyke to satisfy certain of the Company's outstanding creditors, to formally adopt a new Investment Strategy and to change the Company's name to reflect this new strategy.

Background to the Proposals

 Metrocapital Information Plc was admitted to trading on the PLUS market (now the ISDX Growth Market) in July 2007, as an investment vehicle looking to make investments in the media and information sector. On 26 November 2007, the name of the Company was changed to 'Metroelectric Plc' and the scope of the business changed to allow the Company to invest or trade in the eco-friendly products and technologies sector.

 On 22 December 2009, the Company announced the acquisition of 100% of the shares ofPowabyke Acquisition Limited (now Powabyke EV Limited), the owner of a leading electric powered bicycle businesses, for a consideration of £983,997 which was satisfied, at the time, by a cash payment of £120,000 and the allotment and issue of 107,999,640 Ordinary Shares. The Board at the time believed that as Powabyke was an established, cash generative business, it would provide Metroelectric significant returns which would more than justify the initial investment made by the Company.

The Company's annual results for the twelve months to 30 June 2013, showed an operating loss for the period of £188,435 (2012: loss £255,302). The direct contribution to the revenue of the Company attributable to the Powabyke operation during this period was a loss of £118,571 (2012: loss £123,633).  These results reflect the performance of Powabyke since Metroelectric's initial investment in 2009. Although Powabyke has taken various steps to increase its profitability over the years since Metroelectric invested in the company, the operations of Powabyke have not generated sufficient profits to provide Metroelectric with meaningful returns in relation to the investment in the business over the years. Over the past year in particular, Powabyke has faced considerably difficult trading conditions due to a number of factors including the fact that Powabyke did not have the funds necessary to take advantage of various opportunities including those arising from exploiting economies of scale. As a result, Powabyke has lost its competitive position within the electric vehicle market and is facing challenges raising additional funds to provide the working capital required to enable the brand to gain a meaningful share of the electric vehicle market. The management of Powabyke have been reviewing various fundraising options for the company and conditional upon the approval of the Proposals, they intend on focusing on finding alternative sources of finance for Powabyke.

Following the conclusion of Metroelectric's financial year, 30 June 2012, the Board has been evaluating the investment portfolio of the Company and looking at ways to optimise the performance of its investments in a manner that will generate meaningful returns for Metroelectric Shareholders.

 To this end, on 5 November 2012, the Company announced that it had sold a 30% stake in Powabyke to the Green Automotive Company Corporation ("GACR"). More recently, Metroelectric has further diversified its investment portfolio by acquiring a 30% stake in Aircraft Recycling Limited, a company which has recently won a 36 month contract with a major airline to breakdown and recycle the airline's redundant aircraft and 100% of Blaze and Barney Ltd, a company which was setup to operate a Harris Horizontal baling machine.

 At the same time, the Directors have explored several options with regards to its 70% stake in Powabyke and concluded that the costs associated with continually supporting Powabyke, substantially outweigh the benefits. The Board has therefore concluded that it would be in the Company's best interests to release the Company's interest in Powabyke. They believe that the Debt Conversion, which will have the effect of significantly reducing the Company's debt position and strengthening the balance sheet position of the Company, is the best way of achieving this. The Board believes that Metroelectric would be more strongly supported by returns generated from the other investments made by the Company. It is the Board's belief that Powabyke would be able to raise additional cash to finance its operations as a private company and the management of Powabyke is currently looking at various funding options.

Terms of the Debt Conversion

The Board has reached agreements with certain creditors of the Company to settle their outstanding debts, amounting to a total of £133,052.75. The Debt Settlement would result in a substantially reduced debt position, which will be reflected in the Company's future results. The Debt Conversion involves the writing-off of outstanding amounts due to the Creditors, for which the Company will transfer ordinary shares in Powabyke. As part of the Debt Conversion, Peterhouse Corporate Finance Limited, the Company's ISDX Corporate Adviser, will be given shares in Powabyke in proportion to its outstanding debt.

Completion of the Debt Conversion and the transfer of the relevant ordinary shares in Powabyke to the Creditors shall take place within 48 hours after the passing of the resolution of the Company approving the proposals for the Debt Conversion.

The terms of the Debt Conversion are calculated on the basis that the underlying value to be placed on Powabyke would be £215,471. The Independent Director considers that such a valuation basis is equitable in the circumstances.

Mark Chapman, Non-Executive Director of the Company, is currently owed £20,500 in outstanding fees and expenses, by the Company. As part of the Debt Conversion, Mr. Chapman has agreed to convert his entire debt of £20,500, into 9,054 ordinary shares of Powabyke.

 Gregory Collier, Executive Director of Metroelectric, is the sole director of Powabyke. Mr. Collier is currently owed £76,237.58 relating to outstanding fees and loans advanced to Metroelectric. As part of the Proposals, Mr. Collier has agreed to convert his entire debt of £76,237.58 into 33,678 ordinary shares of Powabyke.

Following the Debt Conversion, Metroelectric will continue to hold 4,222 ordinary shares representing 4.69 per cent. of the shares in Powabyke.

 Proposed Investment Strategy

The Directors are seeking to broaden the Company's activities to focus on investment in waste and recycling management opportunities, in addition to eco-friendly products and technologies. The Company aims to focus on opportunities in the fields of Recycling and Waste to Energy, initially in the UK; the Board may consider opportunities outside of the UK if they believe that these will enhance the value of the Company's portfolio. The Directors feel that the new emphasis will enable the Company to create and realise sustainable value in order to maximise value for its shareholders.

The criteria set out above are not intended to be exhaustive and the Directors may make an investment which does not fulfil any or all of the investment criteria if they believe it is in the best interests of Shareholders as a whole to proceed with such an investment.

Metroelectric will seek investment opportunities which can be developed through the investment of capital or where part of or all of the consideration could be satisfied by the issue of Ordinary Shares or other securities in the Company.

The Directors feel that their combined experience in investment valuation as well as in the environmental and 'green' sectors, gives the Board the necessary management and investment experience to make investments that fit the Company's strategy, to improve the net asset value of the Company's portfolio of investments.

The Company intends to be an active investor in situations where the Company can make a clear contribution to the progress and development of the investment. To this end, where the Directors believe that an investee company could significantly benefit from the expertise and input of the Directors, then the Directors would seek representation on the board of the investee company. In respect of other, more substantial investment opportunities, the Directors expect that the Company will be more of a passive investor.

Proposed Change of Name

Subject to Shareholders' approval of the Proposals, it is proposed that the name of the Company be changed to Welney Plc.

Action to be taken

Shareholders will find a Form of Proxy enclosed for use at the General Meeting. Whether or not you intend to be present at the General Meeting, you are requested to complete and return the Form of Proxy in accordance with the instructions printed thereon as soon as possible. To be valid, completed Forms of Proxy must be received by the Company's registrars, Share Registrars, not later than at 11.00 a.m. on 28 April 2014, being 2 business days before the time appointed for holding the General Meeting. You are entitled to appoint a proxy to attend and to exercise all or any of your rights to vote and to speak at the General Meeting instead of you. Completion of the Form of Proxy will not preclude you from attending and voting at the General Meeting in person if you so wish. Your attention is drawn to the notes to the Form of Proxy.

Recommendation

The Directors consider the Proposals to be in the best interests of the Company and the Shareholders as a whole. For the reasons set out above, Greg Collier and Mark Chapman are not giving a recommendation on Resolution 1, to approve the Debt Conversion. I, as the Independent Director, however, recommend that you vote in favour of Resolution 1 and all the Directors recommend that you vote in favour of Resolutions 2 and 3. The Board intends to vote in favour of all of the Resolutions in respect of their direct and indirect shareholdings totalling 4,100,000 shares representing approximately 0.27 per cent. of the issued share capital of the Company.

Yours faithfully,

Cameron Luck
Chief Executive Officer




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The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Metroelectric Plc via Globenewswire

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