AFC Energy Regulatory News (AFC)

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement via a Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF IRELAND, THE REPUBLIC OF SOUTH AFRICA, JAPAN, NEW ZEALAND OR ANY JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OF LOCAL SECURITIES LAWS OR REGULATIONS.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER OR INVITATION TO SELL OR ISSUE, OR ANY SOLICITATION OF ANY OFFER TO PURCHASE OR SUBSCRIBE FOR, ANY NEW ORDINARY SHARES, NOR SHALL IT (OR ANY PART OF IT), OR THE FACT OF ITS DISTRIBUTION, FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH, OR ACT AS ANY INDUCEMENT TO ENTER INTO, ANY CONTRACT OR COMMITMENT WHATSOEVER WITH RESPECT TO THE PROPOSED PLACING.

AFC Energy PLC

("AFC Energy" or the "Company")

Result of Placing and Subscription

Key Highlights

· Placing and Subscription to raise £6 million through the issue of 60,000,000 New Ordinary Shares

· Issue Price of 10 pence per New Ordinary Share

· The Fundraising is with new blue-chip institutional investors and other investors

· Cantor Fitzgerald Europe acted as sole bookrunner in respect of the accelerated bookbuild

· Opportunity for Qualifying Shareholders to invest on equal terms

AFC Energy, the industrial fuel cell power company, is pleased to announce that, following its earlier announcement, the Company has conditionally raised gross proceeds of £6 million through the successful Placing of 58,500,000 New Ordinary Shares and Subscription of 1,500,000 New Ordinary Shares, in aggregate 60,000,000 New Ordinary Shares at a price of 10 pence per New Ordinary Share. Cantor Fitzgerald Europe and M C Peat & Co LLP acted as Joint Brokers in relation to the Placing.

The net proceeds of the Placing and Subscription (being approximately £5.5 million and to be supplemented by any additional funds raised through the Open Offer) will be used to support the Company on its journey to commercialisation, and specifically for:

· delivery of its commitments under the Company's joint development agreement with De Nora S.p.A. ("De Nora");

· business case development with De Nora;

· scoping study completion with Peel Environmental Limited and other third parties in advance of any potential project deployment;

· funding the ongoing operation of the Company's demonstration plant at Stade, together with ongoing testing costs; and

· general administrative expenses and ongoing working capital.

The Issue Price represents a discount of 40.3 per cent. to the mid-market closing price of 16.75 pence on 13 February 2017. The Fundraising is not being underwritten and is conditional on, inter alia, admission of the New Ordinary Shares to trading on AIM. The Fundraising is conditional upon the approval of the Resolutions at the General Meeting of the Company scheduled to take place at Chelsea Football Club, Stamford Bridge, London SW6 4HS at 11 a.m. on 3 March 2017. The Placing Shares and Subscription Shares will represent approximately 15.35 per cent. of the Company's Enlarged Share Capital.

Application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM and it is expected that such admission will occur at 8.00 a.m. on 9 March 2017 ("Admission"). The New Ordinary Shares will be issued credited as fully paid and will rank in full for all dividends and other distributions declared, made or paid after the admission of the New Ordinary Shares and will otherwise be identical to and rank on Admission pari passu in all respects with the Existing Ordinary Shares. The New Ordinary Shares are not being made available to the public and are not being offered or sold in or into any jurisdiction where it would be unlawful to do so.

Following Admission, excluding any shares which may be issued pursuant to under the Open Offer, the Company will have 370,263,943 ordinary shares of 0.1 pence each ("Ordinary Shares") in issue, none of which will be held in treasury.

Related Party Transactions

Yady Worldwide S.A. ("Yady") is a company that is wholly owned by Ben White, son of Howard White, and his relations and their investment vehicles, the Age of Reason Foundation and Eturab who currently hold over 10 per cent. of the Existing Share Capital. Yady and Howard White have together agreed with the Company to subscribe for 1,500,000 Subscription Shares in the Subscription. As Yady and Howard White (the "Related Parties") together are treated as a "substantial shareholder" of the Company, its participation in the Subscription constitutes a "related party transaction" under the AIM Rules.

Tim Yeo, Adam Bond, James Gibson, Mitchell Field, Eugene Tenenbaum and Eugene Shvidler (together the "Independent Directors") consider, having consulted with the Company's nominated adviser, Cantor Fitzgerald Europe, that the terms of the Related Parties participation in the Subscription are fair and reasonable insofar as the Company's Shareholders are concerned.

Tim Yeo, Chairman of AFC Energy, commented:

"AFC Energy recognises the value that can be delivered through institutionalisation of the share register, and following growing interest from blue-chip financial institutions in recent weeks, the Company is pleased to announce the successful completion of the accelerated book build. Institutionalisation of AFC Energy's share register recognises the strong progress we have made over the last three years. Our technical developments and project development opportunities now position us to capitalise on a number of emerging project opportunities.

The Board also recognises the importance of our retail shareholder base and in recognition of our shareholders' ongoing support, we have offered the opportunity to our shareholders to participate in the Open Offer on the same terms as the Placing and Subscription.

The Board are confident this fundraise will strengthen AFC Energy for a number of technical and importantly, project specific successes throughout the course of 2017."

Terms used but not defined in this announcement shall have the meanings given to them in the announcement released via RNS at 1.00 p.m. this afternoon.

For further information, please contact:

Forward-looking statements

This announcement contains statements about AFC Energy plc that are or may be deemed to be "forward-looking statements".

All statements, other than statements of historical facts, included in this announcement may be forward-looking statements. Without limitation, any statements preceded or followed by, or that include, the words "targets", "plans", "believes", "expects", "aims", "intends", "will", "may", "should", "anticipates", "estimates", "projects", "would", "could", "continue" or words or terms of similar substance or the negative thereof, are forward-looking statements. Forward-looking statements include, without limitation, statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects and (ii) business and management strategies and the expansion and growth of the operations of AFC Energy plc.

These forward-looking statements are not guarantees of future performance. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of any such person, or industry results, to be materially different from any results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements are based on numerous assumptions regarding the present and future business strategies of such persons and the environment in which each will operate in the future. Investors should not place undue reliance on such forward-looking statements and, save as is required by law or regulation (including to meet the requirements of the AIM Rules, the Prospectus Rules and/or the FSMA), AFC Energy plc does not undertake any obligation to update publicly or revise any forward-looking statements (including to reflect any change in expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based). All subsequent oral or written forward-looking statements attributed to AFC Energy plc or any persons acting on their behalf are expressly qualified in their entirety by the cautionary statement above. All forward-looking statements contained in this announcement are based on information available to the Directors of AFC Energy plc at the date of this announcement, unless some other time is specified in relation to them, and the posting or receipt of this announcement shall not give rise to any implication that there has been no change in the facts set forth herein since such date.

About AFC Energy

AFC Energy plc has developed and successfully operated an alkaline fuel cell system ("KORE"), which converts hydrogen into "clean" electricity. AFC Energy's key project POWER-UP demonstrated the world's largest operational alkaline fuel cell system at Air Products' industrial gas plant in Stade, Germany in January 2016. The Company is now looking to build upon an already established pipeline of commercial opportunities and drive the findings from the development phase of the technology into a technically optimised and commercially relevant fuel cell system. For further information, please visit our website: www.afcenergy.com.