LONDON (Alliance News) - Active Energy Group PLC said Monday that one of its major shareholders has increased its holding, and it is folding its coal replacement joint venture into the company and issuing equity to its venture partners.
Active Energy said that Gravendonck Private Foundation has converted USD1.4 million in existing debt into equity at 2.65 pence per share, increasing its holding in the company to approximately 30%. Active Energy said the conversion will reduce its interest costs by approximately USD210,000 a year and leave an outstanding loan amount from Gravendonck of USD1.6 million.
Active Energy also said that its joint venture company Biomass Energy Enhancements LLC, formed to develop its coal replacement technology, CoalSwitch, will now be consolidated within the company. As part of the restructuring, its partners in the joint venture have agreed to convert their holdings to equity in Active Energy.
Those partners include Sandy Munro, the founder of Munro & Associates who provided key technical advice on the development process, Philip Scalzo, the inventor and founder of the CoalSwitch technology, and Trident Ltd, the operating company which introduced CoalSwitch to Active Energy.
The majority shareholders in Biomass Energy Enhancements will receive approximately 30 million shares, while Trident Ltd will receive 44.4 million shares, at a price consistent with the Gravendonck conversion.
Active Energy said that in order to carry out the conversions and raise additional funding, it will utilise 62.5 million shares currently held in treasury but it is putting forward a resolution to shareholders for permission to allot another 72.2 million shares, or 10% of the company's total equity. The completion of the transactions could increase the total number of shares in the capital of the company by 26%.
"I believe strongly that the company is at a tipping point; something that has been recognised by our major shareholder and all of the key participants in the CoalSwitch JVA. Their desire to become more closely allied under these proposed agreements underpins the confidence that they have in our ability, together as one focussed team, to deliver significant value going forward," said Richard Spinks, chief executive officer of Active Energy.
Shares in Active Energy were up 12% at 2.90 pence Monday.
By Adam Clark; adamclark@alliancenews.com
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Active Energy (AEG)