Active Energy Regulatory News (AEG)

10 July 2013

Active Energy Group plc

("Active", "AEG"' or 'the Company')

Issue of Equity, Directors' Shareholding and Issue of Options

Active Energy, the pan-European supplier of high quality woodchip and associated timber products for green energy Biomass power generation and MDF manufacturing, announces that it has conditionally raised £472,000, through a subscription (the "Subscription") of 39,760,000 Ordinary Shares in the capital of the Company ("Subscription Shares") and 12,586,666 warrants to subscribe for Ordinary Shares at 1.25p per Ordinary Share by Gravendonck Private Foundation and Colin Hill, a director of the Company.

In addition, as set out in the shareholders circular dated 4 June 2013, Colin Hill and Richard Spinks, both directors of the Company, have agreed to capitalise certain fees owed to them amounting to £85,000 at the same price, resulting in them receiving an aggregate of 6,800,000 Ordinary Shares and 2,266,666 warrants.

As a result of the creation of the Company's newly established Joint Share Ownership Plan ("JSOP"), described in further detail below, and the subsequent initial award made under the JSOP, Colin Hill, Non-Executive Chairman, has a potential beneficial interest in 15,000,000 ordinary shares in the Company.

The ordinary shares issued to the directors, together with the resultant holdings in the enlarged issued share capital, are as follows:

* shares issued at 1.5p under the JSOP

Furthermore, the Company has also agreed today to issue 1,600,000 Ordinary Shares in satisfaction of certain other fees owed by the Company totalling £20,000.

Application will be made for the 62,760,000 Ordinary Shares to be admitted to trading on AIM. Admission is expected to become effective and dealings are expected to commence on AIM on 16 July 2013. Following the issue of the Subscription Shares, the debt capitalisation shares and the JSOP shares, the Company will have 618,625,570 ordinary shares in issue.

Gravendonck Private Foundation, which is connected to Eastwood S.A. (a substantial shareholder of the Company), has agreed to subscribe for 36,000,000 ordinary shares in the capital of the Company. Following Admission, Gravendonck Private Foundation (as a party connected to Eastwood) will be beneficially interested in an aggregate total of 242,933,333 Ordinary Shares, equivalent to 39.3 per cent. of the enlarged issued share capital of the Company. Eastwood S.A. will hold 67,983,333 Ordinary Shares, equivalent to 10.99 per cent. of the enlarged issued share capital of the Company.

Due to the fact that Gravendonck Private Foundation is a party connected to Eastwood (a substantial shareholder of the Company), its participation in the Subscription is a related party transaction as defined by the AIM Rules, due to the size of Eastwood's current shareholding. The Directors, other than Richard Spinks who is currently considered to be a representative of Eastwood S.A., having consulted with Sanlam Securities UK Limited, the Company's Nominated Adviser, consider that Gravendonck Private Foundation's (as a party connected to Eastwood) participation in the Subscription is fair and reasonable insofar as shareholders are concerned.

In addition to the above, the Company has today granted the following share options (the "Options") to the Directors. The Options have been granted with certain vesting conditions and in accordance with the JSOP and Share Option Plan of the Company, further details of which are set out below:

* see Note (a) below

** see Note (b) below

*** see Note (c) below

NOTES

(a) The Threshold Amount under the JSOP above which Colin Hill may benefit from growth in value is determined by reference to the market value at date of grant plus a carrying cost of 8.00% simple interest for a period of up to three years and will be at least £0.015.

(b) 7.5 million fully vested share options have been granted to one individual at an exercise price of £0.0150 each.

(c) 13.5 million fully vested share options have been granted to three employees at an exercise price of £0.0300 each.

(d) Share options have be granted under the terms of the Active Energy Group plc Share Option Plan as approved on 27 June 2013 by shareholders in general meeting. To the maximum extent permissible under current UK legislation as regards Enterprise Management Incentive ("EMI") awards will qualify for favourable tax treatment under EMI rules.

(e) The Hurdle Criterion (that is, the condition which must be satisfied for normal vesting of the award) for both JSOP and Share Option awards is that the LSE closing BID price is maintained for 20 consecutive trading days at a value of not less than £0.0300 pence.

Following the making of these awards, there will be a total of 89,491,764 employee -related share option and JSOP awards remaining outstanding, representing 14.47 % of the current issued share capital in the Company of 618,625,570.

Principal commercial terms regarding the JSOP awards

The JSOP is designed to give effect to a number of important factors which combine to ensure that the best economic interests of all of the Company's shareholders are served. These include:

a) The price hurdle above which rights to JSOP share become vested has been set to be higher than the market price upon which the awards are based.

b) The Joint Ownership Agreement (JOA) provides that, if the price hurdle is not met within three years, then such portion that has not already vested can be bought back by the Trustee at nominal value.

c) Awardees are required to pay for the acquisition of their interests the full amount of the estimated market value of their interests as beneficial joint owners of the shares. This is a capital contribution to the Company, and is non-refundable to the Awardees if the jointly-owned shares do not become vested.

Specific Terms of the Joint Share Ownership Plan

a) Under the terms of the Plan, Colin Hill ("the Awardee"), has acquired, jointly with CAPITA TRUSTEES (as trustee of The Active Energy Group plc Purpose Trust) ("the Trustee"), an interest as beneficial joint owner in the number of shares as noted above, being ordinary shares of £0.01 each in the capital of the Company ("the Jointly-Owned Shares") upon and subject to the terms of a joint ownership agreement ("JOA") entered into in pursuance of the Company's Joint Shared Ownership Plan ("JSOP") which was approved by ordinary resolution of shareholders on 27 June 2013.

b) The Jointly-Owned Shares have been issued to the Trustee and the Awardee at a price of £0.015 per share, this being the effective market price of a share in the Company at the close of business on Tuesday 2 July 2013.

c)

Of the aggregate subscription monies (£225,000.00), the allocation of the £7,350.00 estimated Unrestricted Market Value of the shares acquired by the Awardee has been paid to the Company by the Awardee with the balance having been paid by the Trustee out of monies advanced on loan to the Trustee by the Company.

d) Application has been made for such shares to be admitted to dealing on AIM which is expected on Wednesday 16th July 2013.

e) Under the terms of the JOA the Awardee's interest in the jointly-owned shares will vest upon attainment of the share price hurdle as noted above or upon a 'change of control' of the Company (as defined in the Joint Ownership Agreements).

f) When the jointly-owned shares are sold the Awardee will be entitled to receive, in respect of jointly-owned shares in which his interest has vested, the growth in the market value of such shares above the Threshold Amount.

g) The balance of the proceeds of sale will accrue to the Trustee and be used to repay its outstanding borrowings (and interest) from the Company.

The Plan has been structured to ensure, as far as may reasonably be possible, that the interests of management and shareholders remain fully aligned. No benefit can accrue to any Awardee save under the condition that the shareholder body at large will already have seen a substantial value enhancement in their holding as measured from the date of these awards and always, by virtue of the Threshold Amount mechanism, thereby benefit from a greater quantum of value enhancement than that available to the Awardees.

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