China New Energy Ltd Trading Update, Subscription and Issue of Equity (6206Z)
March 16 2017 - 2:01AM
UK Regulatory
TIDMCNEL
RNS Number : 6206Z
China New Energy Ltd
16 March 2017
16 March 2017
China New Energy Limited
("CNE" or "the Company")
Trading Update, Subscription and Issue of Equity
The Board of CNE (AIM:CNEL), the AIM quoted engineering and
technology solutions provider to the bioenergy sector, provides the
following trading update:
TRADING UPDATE
The Board pleased to report that the Company continued to
perform well in the second half of 2016 and, whilst subject to
audit, revenue for the year to 31 December 2016 is expected to have
risen to approximately RMB72 million. Following the return to
profitability in the six months to 30 June 2016, the Company has
continued to perform in line with our expectations.
The Company also provides the following update on its project
pipeline:
China
The Company is pleased to advise that after a long bidding
process, it has won a number of contracts from COFCO Corporation
("COFCO"), a Fortune 500 Company, one of the largest food
manufacturers in China and an existing customer. The contracts are
to expand COFCO's current production capacity of edible alcohol and
fuel alcohol.
The contracts that were signed with the subsidiary Guangxi COFCO
Biomass Energy Co., Ltd, in aggregate, total approximately RMB20.8
million and will be subject to a payment schedule based on project
milestones. The contracts are expected to take approximately 5
months and commissioning is expected in Q3 of 2017.
The remaining contracts were signed with COFCO Biochemical
(Anhui) Limited, in aggregate, total approximately RMB60 million
and will be subject to a payment schedule based on project
milestones. The contracts are expected to take approximately 7
months and commissioning is expected in Q3 of 2017.
Canada
The Board is also pleased to report the Company's first success
from its programme to expand into international markets and
diversify its product range. CNE has now successfully delivered and
installed the isomaltooligosaccharide ("IMO") production line at
BioNutura which will produce natural fibre sweeteners for the food
industry.
Hungary
The Board is disappointed to learn that the Company's
involvement in the prospective project in Hungary is unlikely to
proceed in 2017 due to uncertainties in the European ethanol market
and investor finance. CNE invested $250,000 to acquire 24 per cent.
of the equity in the project company Visontai Bioetanol Fejleszt
Korlátolt Felel sségű Társaság that may now not be recoverable. The
Company is evaluating its options and will keep the market
appraised.
Sub-Saharan Africa
The board remains confident that the project pipeline with all
of its partners in Sub-Saharan Africa that includes Ghana, Nigeria,
Sierra Leone, Zambia and Zimbabwe remain strong prospective sales.
The negotiations are ongoing and the details are commercially
sensitive and must therefore remain confidential. Sunbird Bioenergy
has reported that they have submitted their environmental impact
assessment ("EIA") to the relevant authorities in Zambia, and once
the requisite approval is given, we expect to enter into the formal
negotiations.
Thailand
The company continues to be in discussion with our customers in
Thailand with respect to new projects and upgrades to existing
projects. To date, no orders have been confirmed.
SUBSCRIPTION AND ISSUE OF EQUITY
The Company is also pleased to announce that it has raised
approximately GBP700,000 (RMB 6 million) by way of a subscription
from Mr. Lv Jingbin, a Chinese resident, for 46,808,809 new
ordinary shares at a price of GBP0.015 per share representing 9.53%
of the enlarged issued share capital and a premium to the current
share price.
The proceeds of the subscription will provide the Company with
additional working capital and to assist in funding the initial
development costs of the COFCO contracts.
Application will be made for 46,808,809 new ordinary shares to
be admitted to trading on AIM which is expected on or around 22
March 2017. Following this issue of equity, the issued share
capital of the Company will be 491,256,350 ordinary shares. The new
ordinary shares will rank pari passu with the existing ordinary
shares.
In accordance with the Financial Conduct Authority's Disclosure
and Transparency Rules, the Company hereby announces that it has
491,256,350 ordinary shares of 0.025p each in issue, each share
carrying the right to one vote. The Company does not hold any
ordinary shares in treasury.
The above figure of 491,256,350 ordinary shares may be used by
shareholders in the Company as the denominator for the calculations
by which they will determine if they are required to notify their
interest in, or a change to their interest in, the share capital of
the Company under the Financial Conduct Authority's Disclosure and
Transparency Rules.
Mr Yu, Chairman, commented: "We believe we are entering this New
Year with a firm order book and a strong sales pipeline that will
ensure that we continue to develop the business in 2017."
For further information, please visit www.chinanewenergy.co.uk
or contact:
China New Energy Limited
Nick Brooks nick.brooks@hotmail.co.uk
Richard Bennett Tel: +44 7920 060218
rbennett@zkty.com.cn Tel:
+44 7966 388 374
Ivy Xu xuhj@zkty.com.cn Tel: +86
20 8705 9371
Cairn Financial Advisers
LLP (Nomad)
Jo Turner / Liam Murray Tel: +44 20 7213 0880
Daniel Stewart and Company
(Broker)
David Lawman Tel: +44 20 7776 6550
This information is provided by RNS
The company news service from the London Stock Exchange
END
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