HEGY Helius Eng

TIDMHEGY

RNS Number : 0905C

Helius Energy Plc

14 January 2015

14(th) January 2015

Helius Energy plc

("Helius" or the "Company")

Update & change of registered office

Further to the RNS announcing the strategic review on 16(th) September 2014 and the RNS announcing the restructuring and cost-reduction programme on the 4(th) November 2014, the Company provides the following update on progress.

CoRDe project

The CoRDe project continues to perform well and is operating in line with expectations. During the period October to December 2014 the plant exported 14,301 MWh of electricity and processed 133,000 tonnes of distillery residues.

The Company originally invested c.GBP7.85m in the project on financial close in April 2011 and continues to hold its 50% plus one share stake. The plant's strong operational performance since the start of the financial year is expected to lead to total project revenues for the three month period to December 2014 of c.GBP3.65m, EBITDA of c.GBP1.61m and profit before tax of c.GBP0.41m. The outlook for project revenues is robust, with c.30% per cent derived from fixed gate fees, c.34% per cent from sale of ROCs and c.20% per cent from sale of electricity (with a large proportion of this supported by a floor price in the Power Purchase Agreement). The balance of income is derived from other revenue streams, including the sale of syrup into the animal feed market and fees from the operation of the Effluent Treatment Plant.

Avonmouth project

The Company continues to endeavour to secure funding for its Avonmouth project and is in early discussions with a new potential funder. No material third party cost commitments will be made to the project unless and until there is a clear pathway to funding. The Company expects to be in a position to provide a further update in respect of the funding of the project before the end of March 2015.

Corporate update

The Company's cost reduction programme has so far resulted in annualised savings in excess of GBP1m as a result of, amongst other things, the surrender of the head office lease, details of which are in the relevant section below, a reduction in staff numbers and a reduction in other overheads.

Revised operating costs (excluding any project specific costs) are expected to be c.GBP0.84m per annum, before annual income from management service agreements of c.GBP0.22m. The Board continues to review opportunities to further reduce costs and will work with CoRDe in respect of the timing of the first cash dividend to be paid by the CoRDe project to its shareholders, including the Company.

While continuing to focus on the performance of the CoRDe project and to seek an investor or acquirer for the Avononmouth project, the Board is also considering other options to secure value for shareholders. These options include the potential sale of all or part of its interest in the CoRDe project, for which it would target a valuation substantially in excess of that which it invested prior to construction.

The Board will also continue to consider other opportunities for maximising value for shareholders and is accordingly undertaking a careful evaluation of the Company's business plan, operational assets, development strategy, market valuation and capital structure.

It remains the case that, in the event the Company is unable to secure financing for the Avonmouth Project, generate value from CoRDe or its other assets, or to secure a dividend from CoRDe by March 2015, it is likely that the Company will need to raise additional financing.

Change of registered office

As part of the Company's ongoing cost reduction programme, undertaken pursuant to its strategic review announced on 16 September 2014, the Company has agreed to surrender the lease of its head office at 242 Marylebone Road, London. As a result, with effect from 14(th) January 2015, the Company's registered office will be:

Europarc Innovation Centre

Innovation way

Grimsby DN37 9TT

John Seed, Executive Chairman commented "We have made good progress with the cost reduction programme announced in November, have delivered robust performance from the CoRDe plant during the period October to December 2014, and continue to work towards finalising funding and commencing construction of our Avonmouth project. However, there can be no assurance that the Company's efforts will be successful or that this process will result in any transaction or change in status. The Company is therefore carefully evaluating its options to ensure that it maximises shareholder value. The Helius CoRDe plant's successful operation and the on-going efforts to secure funding for the Avonmouth Project will be unaffected by this review process."

For more information please contact:

Helius Energy plc Tel: +44 (0) 20 7723 6272

John M. Seed, Executive Chairman

William J. Ingram Hill, Chief Operating Officer

Alan Lyons, Chief Financial Officer

Numis Securities Ltd Tel: +44 (0) 20 7260 1000

Jamie Lillywhite (as Nominated Adviser)

James Black (as Corporate Broker)

Citigate Drewe Rogerson Tel: +44 (0) 20 7282 2867

Chris Gardner

Malcolm Robertson

This information is provided by RNS

The company news service from the London Stock Exchange

END

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