TIDMAEG
RNS Number : 6756R
Active Energy Group PLC
04 March 2019
Active Energy Group Plc / EPIC: AEG / Sector: Alternative
Energy
4 March 2019
Active Energy Group Plc ('Active Energy', 'AEG'or the
'Company')
Acquisition of Lumberton Site & Fundraise
Active Energy, the London quoted renewable energy and forestry
management business focussed on biomass, is pleased to announce
that further to the Company's announcement of 11 January 2019, it
has entered into an agreement (the "Agreement") with Alamac
Holdings LLC ("Alamac" or the "Vendor"), a privately owned US
entity, to acquire an industrial site in Lumberton, North Carolina
(the "Acquisition"). The site will become the new base for all
Active Energy's CoalSwitch(TM) operations in the US and house the
first permanent production facility for CoalSwitch.
The site is strategically located close to AEG's joint venture
partner Georgia Renewable Power LLC ("GRP") and is also in a prime
lumber district in the US. It includes up to 415,000 sq ft of
covered factory space and circa 151 acres of surrounding land (the
"Lumberton Site") and is being purchased for a total consideration
of US$3,330,000 (GBP2,511,312).
Completion of the Acquisition is subject to certain customary
conditions which both AEG and Alamac expect to be satisfied during
March 2019.
To part fund the Acquisition, the Company has completed a fund
raising of US$3,413,000 (or GBP2,573,906) (before expenses) through
the subscription of convertible loan notes ("CLNs") by new and
existing institutional investors (the "Fundraise"). The CLNs, which
are being issued as a Series B to the existing CLN instrument (
"Series B CLNs") that the Company issued on 15 March 2017, have a
maturity date of 15 March 2022 and accrue interest at 8% per annum,
payable quarterly in arrears. In addition, the Series B CLNs will
be listed on The International Stock Exchange.
Michael Rowan, Active Energy Chief Executive said, "We continue
to make progress on delivering our first commercial CoalSwitch(TM)
product to market, which is now our main focus. The acquisition of
the Lumberton Site is part of this strategy and I believe the
Fundraise is an endorsement of our drive to prioritise near term
revenue generative opportunities. I am delighted that we have
received the support of our existing institutional shareholders and
that Alamac wanted to take a significant part of the consideration
via the CLNs, which we believe is another strong vote of confidence
in our future growth strategy and our innovative CoalSwitch(TM)
product.
"Lumberton gives AEG an ideal base in the heart of the lumber
production region in North America and the facility is adjacent to
the facility owned by our JV partner Georgia Renewable Power LLC.
In addition, the site provides the foundation of our onward
expansion in the region as the site benefits from proximal access
to the Eastern Seaboard of the United States, ensuring AEG is
connected to established export routes for sales to Europe and
South East Asia. Our focus is now on installing the initial five
tonne per hour CoalSwitch(TM) plant at the Lumberton Site,
utilising existing equipment and facilities from our existing site
in Utah, together with support from our partners, Andritz Group,
the international engineering group. We believe AEG's relationships
with both Andritz and GRP, together with the Acquisition, can
transform the Company's business. We now look forward to providing
updates as development accelerates at the Lumberton Site and we
look to establish first production and sales of CoalSwitch(TM) in
the coming months."
Lloyd W. Coppedge, CEO of Alamac Holdings LLC, said, "We
recognise the importance of Active Energy's objective to deliver
innovative second generation biomass products, that have the
potential to transform the traditional power industry. This has
significant implications in terms of both the environmental impact
of power generation and the economic enrichment of the Lumberton
area and I am delighted to be a part of these developments."
Key Terms of the Agreement and the CLNs
The total consideration for the Acquisition of the Lumberton
Site is US$3,330,000. This includes a cash payment of US$1,080,000,
which AEG has now made to Alamac, with the balance being settled
via the issuance to Alamacof US$2,250,000 of Series B CLNs.
The Series B CLNs are redeemable after March 2020 at the
election of the Company and are secured via a fixed and floating
charge on AEG's assets.
Subject to the Company having the requisite authorities to issue
ordinary shares of 1p ("Ordinary Shares"), Alamac will have the
right to convert the Series B CLNs into Ordinary Shares at any time
prior to the maturity date of 14 March 2022, at a price of 1p per
Ordinary Share.
Completion of the Acquisition is contingent upon customary
closing conditions including AEG's satisfactory review and
acceptance of all inspections of the Lumberton Site and title
thereto, as well as appropriate re-zoning for its recognised
industrial uses. Approvals are expected on or around 18 March 2019
from Robeson County, North Carolina.
Additional Information on the Lumberton Site
The Lumberton Site is fully permitted for operations and the
permits can be transferred to AEG upon completion of the
Acquisition, thus reducing the time to market of the planned
production of CoalSwitch(TM).
Following the completion of the Acquisition, the Company will
focus on establishing its first industrial-scale CoalSwitch(TM)
plant at the Lumberton Site. This is a strategic location close to
the Eastern Seaboard of the United States in the heart of the
lumber production region in North America. The Directors believe
the location of the Lumberton Site will be advantageous for the
Company as it seeks to generate regular sales of its products to
Western Europe and South East Asia.
The Lumberton Site also includes key ancillary facilities, such
as water treatment, an analysis lab, offices and IT hardware, thus
further reducing the amount of capital expenditure required for the
Lumberton Site.
The Directors believe that the size of the Lumberton Site
provides significant scope for the expansion of the initial
CoalSwitch(TM) plant via the addition of extra CoalSwitch(TM)
production facilities. Active Energy is targeting production
capacity increasing to up to 400,000 tonnes per annum during 2021.
Furthermore, the Directors expect that AEG will also benefit from
complementary biomass, saw logging and other commercial
opportunities in the Lumberton area.
As part of Active Energy's due diligence on the Lumberton Site,
the Company's Directors reviewed an independent valuation report on
the Lumberton Site. The report, which was dated November 2017,
valued the Lumberton Site at US$4,550,000.
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
**ENDS**
Enquiries& Further Information:
Website LinkedIn
www.aegplc.com www.linkedin.com/company/activeenergy
--------------------------------------
Enquiries
Active Energy Group Michael Rowan
Plc Chief Executive Officer (Active
Energy)
Antonio Esposito
Chief Operations Officer
(Active Energy)
--------------------------------- ----------------------------
SP Angel Corporate David Hignell / Lindsay Mair Office: +44 (0)20
Finance LLP / Jamie Spotswood 3470 0470
Nominated Adviser
and Joint Broker
--------------------------------- ----------------------------
Optiva Securities Jeremy King Office: +44 (0)20
Ltd Joint Broker 3137 1902
--------------------------------- ----------------------------
St Brides Partners Susie Geliher / Melissa Hancock info@stbridespartners.co.uk
Financial PR Adviser / Gaby Jenner Office: +44 (0) 20
7236 1177
--------------------------------- ----------------------------
About Active Energy Group:
Active Energy Group plc is a London listed (AIM: AEG) renewable
energy company that has developed a proprietary technology which
transforms low-cost biomass material into high-value green fuels.
Its patented product CoalSwitch(TM) is the world's only drop-in
biomass fuel that can be mixed at any ratio with coal or completely
replace coal in existing coal-fired power stations without
requiring plant modification.
Active Energy Group's immediate strategic focus is the
production and commercialisation of CoalSwitch(TM) and
SuperFuel(TM), a low emission CoalSwitch(TM) blend that utilises
waste coal fines.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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