Active Energy Regulatory News (AEG)

Active Energy Group Plc / EPIC: AEG / Sector: Alternative Energy

26 June 2019

Active Energy Group Plc

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

Two Lease Agreements Signed for Lumberton

Active Energy, the London quoted renewable energy business focussed on biomass, is pleased to announce that it has signed two lease agreements at its recently acquired commercial plant in Lumberton, Robeson County, North Carolina (the 'Lumberton Site').

Highlights

· Lease agreement signed with Tencate Protective Fabrics ('Tencate'), an existing tenant at the Lumberton Site, including an agreed increase in rental income.

· Lease agreement signed with Renewable Logistics Systems, LLC ('RLS') including land within the Lumberton Site to be used for saw logging and wood processing, to complement the business activities relating to the Company's CoalSwitch™ and biomass operations.

· Lease agreements provide the Company with an immediate source of revenue as it advances its CoalSwitch™ and biomass operations at the Lumberton Site.

· Construction of five tonne per hour CoalSwitch™ plant to commence imminently.

Michael Rowan, CEO of Active Energy Group, said, "Our intention for the Lumberton Site was to create a strategic hub to house the first permanent CoalSwitch™ production facility, in addition to generating other incremental sources of revenue for Active Energy, whilst delivering a positive impact on the local economy. These lease agreements not only demonstrate how the Company is committed to supporting local business but also provide AEG with a valued source of revenue that will assist in the future development of the Lumberton Site. Notably, the agreement with RLS enables AEG to commence a saw logging operation at the Lumberton Site and presents additional complementary opportunities to the Company."

Key Terms of Lease Agreement with TenCate

· TenCate is an established provider of high-quality industrial safety fabrics for a range of industries including utilities and infrastructure, energy, oil and gas, chemical, metal, steel and mining, and manufacturing.

· Two-year lease agreement that will automatically renew for a further 12-month period unless written notice is provided within 90 days.

· AEG to provide adequate staff to oversee delivery and storage of fabric on behalf of Tencate, in addition to specified required equipment.

· Rent agreed for an annual sum of US$204,000 to be paid to the Company.

Key Terms of Lease Agreement with RLS

· RLS is a regional supplier of saw logs, pulpwood and wood chips for industrial and domestic use.

· Three-year lease agreement, which will formally commence on 15 July 2019, with the opportunity to extend the agreement for a further two years.

· Rent agreed for an annual total sum of US$60,000 to be paid to the Company.

· The lease provides for an increase in acreage use from an initial 5 acres up to 30 acres during the term of the lease with a correspondent increase in rental income.

Related Party Transaction

Mr Antonio Esposito, the Company's Chief Operations Officer, is a former director of RLS. In addition, when aggregated with his wife's holding, Mr Esposito is the beneficial holder of more than 30% of the shares in RLS, with voting rights.

As such, Active Energy's lease agreement with RLS constitutes a related party transaction in accordance with AIM Rule 13. Michael Rowan and Simon Melling are considered to be independent Directors for these purposes and, having consulted with the Company's Nominated Adviser, consider the terms of Active Energy's lease agreement with RLS to be fair and reasonable insofar as the Shareholders are concerned.

Furthermore, Antonio Esposito has been excluded from any of AEG's commercial negotiations with RLS and is precluded from voting on any matters relating to the lease agreement between AEG and RLS.

Additional Information on the Lumberton Site

The Lumberton site includes all requisite ancillary facilities for the production of CoalSwitch™, including all relevant power supplies, water treatment facilities, an analysis lab and offices. The Directors believe that the size of the Lumberton Site ensures the opportunity for significant expansion of the initial CoalSwitch™ plant via the construction of additional CoalSwitch™ production facilities targeting capacity of up to 400,000 tonnes per annum over the next 2 years. Furthermore, the Directors expect that AEG will benefit from additional near-term commercial opportunities including complementary biomass, saw logging and other opportunities in the Lumberton and North Carolina areas.

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.

**ENDS**

Enquiries & Further Information:

About Active Energy Group:

Active Energy Group plc is a London listed (AIM: AEG) renewable energy company that has developed a proprietary technology which transforms low-cost biomass material into high-value green fuels. Its patented product CoalSwitch™ is the world's only drop-in biomass fuel that can be mixed at any ratio with coal or completely replace coal in existing coal-fired power stations without requiring plant modification.

Active Energy Group's immediate strategic focus is the production and commercialisation of CoalSwitch™ and SuperFuel™, a low emission CoalSwitch™ blend that utilises waste coal fines.