ALO.L Regulatory News (ALO)

21 Feb 2008 09:00

Cue Energy Plc21 February 2008 21 February 2008 Cue Energy plc ("Cue" or "the Company") Restoration of Trading on AIM, Proposed Acquisition, Notice of EGM, Resignation of Director and Appointment of Broker On 28 September 2007, the Company announced that it had agreed in principle,subject to funding, to acquire 100% of the issued capital of Oreion AustraliaEnergy Pty Ltd ("Oreion"), a private Australian company, in order tocommercialise the micro fuel cell technology ("the PEM Technology") which hadbeen developed by CSIRO, Australia's leading technology research organisation.Trading in the Company's ordinary shares on AIM was suspended as the acquisitionwould have been classified as a reverse takeover under the AIM Rules. On 24 December 2007, the Company announced that the Directors were working on astructure under which Oreion would commercialise the PEM Technology as anindependent company in which Cue would have a significant equity position andthat discussions regarding the original proposed acquisition had thereforeterminated. The Company has today conditionally agreed terms for the acquisition of 100% ofthe issued capital of Oreion (the "Acquisition"). As mentioned below, and aspart of the Company's passive investment strategy, it is envisaged that Oreionwill raise funding and seek partners in order to enable the continuedcommercialisation of the PEM Technology. The Company will issue 50,000,000 new ordinary shares at an issue price of 2p tothe shareholders of Oreion (the "Consideration Shares") in consideration for theAcquisition. The Consideration Shares will represent approximately 18% of thetotal issued enlarged share capital of the Company. At the issue price, thevalue of the Consideration Shares is £1,000,000. Approval will be sought fromShareholders in a general meeting to effect the Acquisition. Trading in theCompany's ordinary shares on AIM has been restored with effect from today as theAcquisition is not classified as a reverse takeover under the AIM Rules. Since incorporation on 4 September 2001, Oreion undertook no trading or otheractivities until 3 August 2006 when it entered into the first of variousagreements with CSIRO (the "Commercialisation Agreements"). TheCommercialisation Agreements have been extended beyond their original expirydate until 30 June 2008 conditional inter alia upon the Acquisition andsubsequent funding contributions of A$69,000 per month (£32,547 at an exchangerate of A$2.12 to £1) by Oreion. They are also conditional on the Company andOreion obtaining sufficient funding to enable the continued commercialisation ofthe PEM Technology. The level of funding required will be dependent on furthernegotiations with CSIRO and other potential partners. By virtue of the Commercialisation Agreements, Oreion intends to become aleading enabler of fuel cell technology, generating revenues through thesub-licensing of the PEM Technology for the development, manufacture and sale offuel cell test stations and PEM electrolysers, and subsequently through thetechnology development of direct hydrogen micro fuel cell products and thelicensing of related fuel cell technology. Under the CommercialisationAgreements, Oreion will, under certain terms and conditions, have an exclusiveworldwide licence over certain advanced technology as well as access to a highlyexperienced technical team. Oreion's audited Financial Accounts for the period ended 30 April 2007 reporteda loss before tax of A$516,001 (£239,352) and net liabilities of A$509,751(£236,453). It is proposed that Oreion's operations in Australia will continueto be managed by its current directors, John Simpson and Tim Malloch, withOreion's management reporting to the Board of the Company. As at 31 December 2007, the total expenditure (unaudited) incurred by theCompany on technical, commercialisation and legal costs in relation to theOreion transaction totalled £1,376,611. These costs will continue to be carriedforward and capitalised in the accounts of the Company. In addition, the Companyhas provided Oreion with a convertible loan of £250,000 under the financefacility agreement dated 3 January 2007. As at 21 February 2008 the Company hascash at bank of £823,792. The Company will continue to pursue additional new investment opportunities inline with the proposed amended investing strategy. In order to balance the operational costs of the Company moving forward with theAcquisition, Jade Styants has resigned from the Board with immediate effect. HB Corporate has been appointed sole broker to the Company replacing Hichens,Harrison & Co plc. A circular has been sent today to shareholders convening a general meeting toconsider the following resolutions:- 1. an ordinary resolution to amend the Company's Investing Strategy byexpansion of the geographical focus; 2. an ordinary resolution to approve and renew the Company's InvestingStrategy as amended by Resolution 1; 3. an ordinary resolution to approve the Company's continuing in thebusiness of seeking investments as directed by 1 and 2 above; 4. an ordinary resolution to approve the Acquisition; 5. an ordinary resolution to authorise the directors to allot new sharesin the Company up to an aggregate nominal amount of £13,838,855; 6. a special resolution to disapply statutory pre-emption rights whichwould otherwise apply on the allotment of new shares for cash in connection withrights and similar issues and otherwise up to an aggregate nominal amount of£5,000,000; and 7. a special resolution (which will be proposed if Resolution 3 has notbeen passed, but not otherwise, immediately following the vote on Resolution 3)to place the Company in voluntary winding-up. A copy of the circular is available on the Company's website atwww.cueenergy.co.uk. For further information: Cue Energy plcMalcolm James / Gregory Kuenzel Tel: +44 (0)20 7182 1748 www.cueenergy.co.uk HB CorporateEdward Hutton/ Rachel Kane Tel: +44 (0) 20 7510 8600 This information is provided by RNS The company news service from the London Stock Exchange