TIDMAEG
RNS Number : 4920G
Active Energy Group PLC
24 July 2019
Active Energy Group Plc / EPIC: AEG / Sector: Alternative
Energy
24 July 2019
Active Energy Group Plc
('Active Energy', 'AEG' or the 'Company')
Joint Venture Agreement for Saw-Logging Operations at
Lumberton
Active Energy, the London quoted renewable energy business
focussed on biomass, is pleased to announce that it has entered
into a joint venture agreement (the "JV"), with Renewable Logistics
Systems LLC ("RLS"), a supplier of saw-logs, pulpwood and wood
chips to international and domestic markets. The JV will enable AEG
to enter the saw logging export market via the commencement of
operations at the Company's Lumberton Site, in Robeson County,
North Carolina ("Lumberton") and will also provide further revenue
opportunities for the Company.
Highlights
-- Pursuant to the terms of the JV, AEG and RLS have
incorporated Renewable Energy Systems LLC ("RES") as an LLC to
enter the saw-logging export market and to handle forthcoming
logistics operations at Lumberton.
-- AEG will have an initial 30% equity share in RES and a right
to increase this to 49%, when a 50 tonne per hour ('tph')
CoalSwitch(TM) plant which AEG expects to be operational before the
end of 2020.
-- Forestry waste products from RES's activities at Lumberton
will be utilised as an additional feedstock resource for the
production of all pelletised fuels including CoalSwitch(TM).
-- RES will manage the material handling within Lumberton for
AEG and the transportation services for the delivery of production
of both saw logs and pellets to customers.
-- RES will enter into contracts for products from Lumberton and
anticipates generating short term revenues from the export of the
saw-logs.
-- Lumberton will be the initial operating site for RES.
-- AEG estimates the throughput of RES activities will be in the
range of 200-500 containers per month of saw-logs for the export
market, equivalent to 5,000-15,000 m3 per month.
-- As per the Company's announcement of 26 June 2019, AEG and
RLS have an existing lease agreement; pursuant to the terms of the
JV, the leased area will increase to cover 30 acres generating
further rental income for Company.
Michael Rowan, CEO of Active Energy Group, said, "This JV with
RLS is another important milestone and represents a further
complimentary revenue stream for AEG. It also establishes an
additional source of feedstock supply for the production of
pelletised fuels, and importantly accommodates all the near-term
logistics requirements for Lumberton for the supply of existing and
new pelletised renewable fuels to customers.
"Revenue from the JV will be utilised for the future development
of Lumberton and further demonstrates the value of our new
operational centre, as it provides valuable commercial
opportunities for the Company through being an industrial hub
located strategically in the heart of America's forestry
industry."
Key Terms of JV
RLS is a supplier of saw logs, pulpwood and wood chips to
international and domestic markets. Pursuant to the terms of the
JV, RLS will provide the following:
-- An established saw-logging export operation at Lumberton with
all requisite equipment, including vehicles, handling equipment and
personnel.
-- Additional equipment to allow for material handling services
required for the efficient operation of a pelletised plant
operations for the initial 5 tph plant once in production and to
accommodate the planned production capacity of up to 50 tph and a
feedstock and handling requirements of up to one million tonnes per
year.
-- New long-term lease agreement between AEG and RLS to cover 30
acres secured at Lumberton with appropriate space to perform the
required material handling services and expand to meet the
expansion plans at Lumberton.
-- In return, AEG will provide full utilisation of facilities at Lumberton for RES.
In addition, RES will be responsible for providing the following
services:
-- Yard management, including:
o Receiving and storing feedstock at Lumberton;
o Organising the saw logging operations at Lumberton; and
o Providing and storing additional feedstock for pelletised fuel
production.
-- Transportation, including:
o Hauling output material to shipping locations both within the
US and internationally; and
o Co-ordinating with AEG customers for product delivery.
-- External feedstock material handling, including:
o Organising and operating a material handling facility within
or in the proximity of Lumberton.
AEG and RLS have agreed that to perform the services stipulated
in this JV, it will be necessary to acquire and install some
additional equipment including a weigh scale, trucks, a tipper and
wheel loader. This equipment shall be purchased by RES following
consultation with Active Energy. RLS's core equipment will start
arriving at Lumberton before the end of July 2019.
Related Party Transaction
Mr Antonio Esposito, the Company's Chief Operations Officer, is
a former director of RLS. In addition, when aggregated with his
wife's holding, Mr Esposito is the beneficial holder of more than
30% of the shares in RLS, with voting rights.
As such, the formation of Active Energy's JV with RLS
constitutes a related party transaction in accordance with AIM Rule
13. Michael Rowan and Simon Melling are considered to be
independent Directors for these purposes and, having consulted with
the Company's Nominated Adviser, consider the terms of Active
Energy's JV with RLS to be fair and reasonable insofar as the
Shareholders are concerned.
Furthermore, Antonio Esposito has been excluded from any of
AEG's commercial negotiations with RLS and is precluded from voting
on any matters relating to the JV between AEG and RLS.
Additional Information on Lumberton
Lumberton comprises of 415,000 sq. ft of covered factory space
and 151 acres of surrounding land in Lumberton,
North Carolina. The Company is currently focussed on establishing its first five-tonne per hour industrial-scale CoalSwitch(TM) plant at Lumberton however due to the size of the site, the Company has the scale of facilities to expand production of pelletised fuels including CoalSwitch(TM) and over the next 36 months targeting production of up to 400,000 tonnes per annum during 2021. The facility is also large enough to accommodate complementary activities including biomass, saw logging and other commercial opportunities in the Lumberton area and is intended to become an environmentally friendly manufacturing hub developing a range of complementary renewable technologies.
Lumberton includes all requisite ancillary facilities for the
production of CoalSwitch(TM), including all relevant power
supplies, water treatment facilities, an analysis lab and offices.
Furthermore, the Company can benefit from additional near-term
commercial opportunities including complementary biomass, saw-logs
export and other opportunities in the Lumberton and North Carolina
areas.
Lumberton 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.
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 CO SBP +44 (0) 20
Plc Chief Executive Officer (Active 7236 1177
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 Broker
--------------------------------- ----------------------------
St Brides Partners Melissa Hancock / Gaby Jenner info@stbridespartners.co.uk
Financial PR Adviser 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 biomass
renewable fuels. Included in its products is its patented product
CoalSwitch(TM) as one of the world's first 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 other
blended biomass pellets .
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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