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(Sharecast News) - Waste-to-energy technology company Powerhouse has agreed heads of terms with Hydrogen Utopia International (HUI), it announced on Tuesday, for the joint development of a facility at a site in Konin, in the Polish province of Wielkopolska.
The AIM-traded firm said that once full documentation was signed, it would "formalise" its position within the project and the use of its proprietary technology that generates hydrogen from non-recyclable waste plastics.
It said the two parties agreed in principle to establish a joint venture vehicle owned equally by each company, to which Powerhouse and HUI would contribute development costs for Konin on a 50-50 basis.
Under the heads of terms, Powerhouse would not make any entry payments to HUI, but HUI would be allowed to recover its costs to date at financial close of the project, fixed at €0.25m with a €0.25m premium.
The intent was for the ongoing development costs of both parties to be capitalised at financial close, and recovered through an appropriate mechanism, to be agreed.
Powerhouse said its participation in the joint venture was subject to definitive agreements with HUI, including the management and governance of the joint venture company.
The company announced a similar arrangement with HUI at Lanespark in Ireland on 13 July, and also announced it was taking a 50% shareholding in Protos Plastics to Hydrogen No 1 on 15 August.
"This formalises PHE's position in the Konin project and brings to an end speculation within the market on what PHE's role will be," said interim chairman Keith Riley.
"We now have the task of agreeing the detailed documents for all three projects at Protos, Lanespark and Konin, which will conclude PHE's recently adopted policy of holding at least some level of control of the projects on which it embarks.
"I am well aware that this increases our cash flow, so an important aspect of the project controls we are implementing is careful cash management and expenditure control which we have built into the management forecasts."
Riley said HUI had made a "fast start" in Poland, and announced that it had signed a letter of intent with the City of Konin on 3 February last year.
"Events in Eastern Europe since, however, inevitably mean that this project is likely to fall behind.
"In consequence, I am confident that the three developments can be phased."
At 1033 BST, shares in Powerhouse Energy Group were down 2.92% at 1.75p.
Reporting by Josh White at Sharecast.com.
