Lignol raises $2.4M, invests in Australian Renewable Fuels
In Canada, Lignol Energy Corporation announced a non-brokered private placement of up to 30 million common shares of the Company at CAD$0.08 per common share to raise up to CAD$2.4 million together with the execution of a Share Purchase Agreement to acquire from Wasabi Energy Limited 275 million ordinary shares of Australian Renewable Fuels Limited for a total purchase price of CAD$4.27 million.
ARW is the largest biodiesel producer in Australia, owning three plants with a total nameplate capacity of 150 million litres per annum, which were built at an aggregate cost of approximately A$150 million. ARW has recently reported two consecutive quarters ending June 30, 2012 with estimated total receipts from customers of A$43.5 million and net operating cash flows of A$4.3 million.
The lead investor in the Private Placement is Difference Capital Funding, who is making a CAD$1 million direct investment in LEC. “We recognize the inherent upside potential value in each of these two companies and especially with Lignol’s value now diversified and underpinned with a meaningful stake in ARW”, said DCF’s Chief Executive Officer, Michael Wekerle. “To the extent ARW is successful executing on its business plan and ARW chooses to pay dividends or the value of the ARW shares increases, Lignol stands to benefit with access to cash to commercialize its patented technology.”
On the closing of the Share Acquisition, Wasabi will hold approximately 19.2% of the issued and outstanding common shares of LEC. Wasabi is listed on the Australian Securities Exchange and the AIM market in London. Wasabi is an emerging power producer based on the Kalina Cycle technology which utilizes low grade, waste heat from industrial facilities or geothermal sources to produce electricity. Stephen Morris, an executive director of Wasabi since 2006, will resign from the Wasabi board of directors and join the board of Lignol.
“Lignol has an impressive technology backed by an advanced pilot plant, a strong intellectual property portfolio and capable management team that we feel positions the Company to become a transformative participant in the emerging renewable fuels and chemicals industry,” stated WAS Chairman, John Byrne. “We are excited to become a major shareholder in a company with such significant potential”.
Other investors joining Difference Capital Funding Inc. in the Private Placement include Lignol management and Jace Ltd., a company headed by Stephen Morris. The Private Placement and the Share Acquisition are expected to close the week of August 20, 2012.
Category: Fuels
