Acta : Update on Legal Action

Acta S.p.A. ("Acta" or "the Company" or "Group")

Update on Legal Action

ACTA S.P.A. (AIM; ACTA), the hydrogen energy company, has been notified that the Company's appeal to suspend the provisional executive authority of the 2010 arbitration award of €1.15m plus costs (in aggregate approximately €1.35m), obtained by a minority shareholder of a Group subsidiary company against Acta in July 2013 has been rejected. The claim is fully provided for in the Company's  accounts, however the rejection of this appeal means the Company is now either required to pay the ruled amount, negotiate a settlement or could be subject to enforced actions.  

The Board is disappointed with the outcome of the Court's decision and is considering all appropriate measures to protect the Company's position and the interests of the shareholders and will provide an update in due course.

Background

An arbitration action was undertaken in 2008 by Mrs Del Bono, a 10% shareholder of IdeaLab S.r.l., a group subsidiary company 90% owned by Acta, relating to a patent owned by IdeaLab, licenced to Acta from 2004 to 2008, and thereafter no longer used by the Group.  The arbitration resulted in an award of €1.15m plus costs against Acta in December 2010.  The initial arbitration judgement provided provisional executive power, such that Mrs Del Bono could take enforcement actions against the Company and its assets to recover the sums due under the award.

Acta appealed to the Florence Court against the award and applied to the same Court to have the provisional executive power suspended. Suspension was granted in December 2011 pending the outcome of the appeal. In July 2013, Acta announced that the appeal had been rejected by the Florence Court.  The Board strongly refutes the claim and has appealed to the High Court, a process which is expected to take a number of years, and applied again to the same Florence Court to have the provisional executive power suspended on the same grounds of the previous application, pending the final outcome of the High Court appeal process. The arbitration decision will not become definitive unless confirmed in due course by the High Court, an outcome which the Board considers to be highly unlikely. Further detail of the legal dispute are set out in note 26 in the Company's 2013 accounts and fully provided for.

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About Acta S.p.A.

Acta S.p.A. is a developer and manufacturer of a range of clean energy products.  Based on its world-leading expertise in alkaline membrane technology, the Company has developed a unique range of low-cost, compact hydrogen generators (electrolysers) which produce pure, dry compressed hydrogen at high efficiency from renewable or grid power.

In April 2013 Acta launched the Acta Power, an integrated electrolyser and fuel cell system for use in back-up power and renewable energy storage applications.  Best understood as a "Hydrogen Battery", the system converts energy from renewable or grid power when it is available and stores it in the form of hydrogen, and then converts the hydrogen back to electrical power when needed due to grid black-out or lack of solar / wind power. 

This system has extensive application as a back-up power unit for telecommunications base stations, where it competes on cost against traditional battery and diesel solutions, while offering a cleaner solution and better service.  In particular, the use of rainwater and the generation of hydrogen on-site removes the cost and logistical barriers of fuel delivery, while also avoiding the theft risk associated with diesel, methanol and battery systems. 

The supply of fuel cell back-up power systems for telecommunications base stations represents a large and fast-growing market, especially in extensively bad-grid and off-grid locations such as in Asia and Africa.  Battery sales to the Chinese telecoms industry are currently valued at $4.7 bn to $7.8 bn per annum (Fuel Cell Today, China).

Acta holds a portfolio of patents and patent applications on its key technologies, manufactures its products through a combination of production, component subcontracting, and final product assembly and quality control, and has established distribution channels through partnerships in China, India, SE Asia, Australia, Africa, Middle East, Germany, UK, USA and South America.

Acta S.p.A. is based near Pisa, Italy, and was admitted to trading on AIM in October 2005.