Investors in KP Renewables have voted for a Company Voluntary Arrangement (CVA) and a search for a deal as a shell.

Shares in KP, which was floated on AIM in 2005 with Deloitte as nominated adviser to back renewable energy projects, fell 99.5 per cent to 1.75p this morning as they returned from a seven-month suspension. The company had lost its way with the illness and later death of founder and chief executive officer Dr James Watkins. Losses for the six months to last June surged from �84,000 to �2.3 million, �400,000 more than the previous full-year deficit, with more than half the interim losses reflecting provisions against assets now deemed worthless.

Chairman John Bryant and his board persuaded creditors and shareholders that a CVA would be the only route by which they could obtain any residual value. The process has involved a �575,000 emergency placing and a hefty share consolidation.

Creditors and shareholders who voted for the cash and shares option contained in the CVA are theoretically entitled to 60 per cent of any net proceeds that may flow from KP-backed projects over the coming three years. But the board is being restructured to steer KP into either a new investment in renewables or, more likely, a reverse takeover deal as a shell.

Out go David Lloyd-Jacob, former finance director of Consolidated Goldfields and rescue chief of scandal-ridden Butte Mining, Stephen Drummond and Paul Goodrow. In come small company corporate finance specialists Peter Redmond and Richard Armstrong, former prot�g� of broker Fiske’s shellmeister Derec Holmes (affectionately known in the City as the “White Rat”), and, like Redmond, a director of shell group BWA and ex-director of Victoria Oil & Gas.

KP’s prospects now depend on the final successful and clean conclusion of its restructuring and refinancing and whatever reverse-takeover deal Redmond, Armstrong and Bryant can find for the company.

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