17 May 2017

Dear Shareholder,

I am writing after a period of considerable silence to let you know that IPSA Group PLC has finally achieved a position of stability after teetering on the edge of bankruptcy for a number of years. IPSA is now also subject to a recommended share offer from Encor Power plc, a developer of electricity storage power plants in England, which will permit IPSA shareholders to benefit from this new type of smart grid power generation in a country less volatile than South Africa while also offering investors wishing to dispose of their resultant Encor share interest in a liquid market when Encor's full listing on the London Stock Exchange occurs in the early summer.

Following the disposal of IPSA's original power business in South Africa back in February 2016, Susan Laker and I joined the Board of IPSA as its sole, unpaid directors with the challenging task of resolving running disputes with Ethos Energy and Rurelec PLC over unpaid amounts due to and from IPSA. I am delighted to report that a comprehensive agreement with all parties was finally achieved in April of this year which also resulted in enough cash being paid or committed to IPSA to allow a settlement with all of IPSA's long suffering trade creditors. This now allows IPSA the breathing space to sell its remaining residual ancillary power equipment in storage in Italy.

In turn, IPSA has been able to agree terms with Encor for a recommended share exchange which gives Encor the benefit of IPSA's track record in developing and installing gas engines and small gas turbines as well as the potential economic contribution of IPSA's accumulated tax losses at some future date as Encor realises investment in its portfolio of U.K. power projects.

The last ten years have been turbulent for IPSA as it entered the South African power market only to see its hopes dashed by a government which reversed its policy of encouraging private investment in the power sector. The financial losses suffered by IPSA have caused considerable damage and for a period of time they threatened to overwhelm the company. The patience of IPSA shareholders was then further tested when the company was forced to delist from the AIM market, thereby stranding investors in IPSA shares who had no platform from which to trade their shares. I hope that the remedial actions of the last fourteen months will at least bring some relief once Encor shares are listed and the merged entity begins to install power generation capacity on a number of consented sites in England.

Yours faithfully,

Peter Earl

CEO, IPSA Group PLC

IPSA Group plc published this content on 25 May 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 25 May 2017 09:55:16 UTC.

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