suspended pending recapitalisation negotiations, page-5

Solco Limited

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Shareholders in Europe (almost 100 shareholders with a total of approx. 4.7 million shares) intend to issue an open letter to Management and Board of SOLCO Ltd.
We request all SOLCO shareholders to participate and add questions, comments and suggestions to the text down below. Thank you for your co-operation.
For confidential messages email: [email protected]


“On behalf of a number of European shareholders (see attached listing for details) we would like to express our gravest concerns about the recent recapitalisation plans as well as the lack of adherence to due process in terms of keeping shareholders informed about events that lead to the current financial crisis.

As a starting point we would like to note that SOLCO Ltd initially advertised its activities using words such as "ethical" and "sustainable", "service" and "results", which instilled trust and made shareholders believe, that SOLCO Ltd was worthwhile investing. Shareholders are concerned that, given the recent events, SOLCO Ltd is not fulfilling its promises implicitly contained in its company value statements as proclaimed on the web-site nor living up to its obligations towards shareholders.

In particular, the shareholders would point to the following shortcomings in terms of shareholder communication and commitment:

· SOLCO's share price was subject to a very substantial devaluation, experiencing a fall by more than 50 per cent since March 2006 with expectations of further share price erosion when trading will resume in mid-November this year;
· shareholders were not notified of significant and grave financial problems caused by warranty claims in the hot-water-solar branch and consequently were prevented from and unable to act appropriately;
· following investments in excess of AUS$3,5 million undertaken by the management for restructing purposes in 2006, no results have been made public nor have shareholders been informed about progress on such restructuring;
· shareholders are aware that the global SMS-licenses business is experiencing difficulties, however shareholders have not been officially notified by the SOLCO management;

In relation to the present recapitalisation proposal, shareholders are concerned that these restructuring activities will mainly benefit Mr. David Richardson and will exert enormous pressure onto shareholders.
· Firstly, shareholders will be subject to a very significant dilution in terms of share value and consequential loss of their invested money;
· if shareholder approval will be given, Mr. Richardson will own 47 % of SOLCO Ltd.(including his wages); and
· if shareholder approval is not given, Mr. Richardson will claim AUS$1,5 million from the company.
The above begs the question, what will become of SOLCO Ltd and shareholders are concerned that the future of SOLCO is at best dim and entirely uncertain in terms of reassurance of their investments."

please!!!