RED.L Regulatory News (RED)

25 Sep 2006 07:04

Camco International Ltd25 September 2006 Camco Grows in Russia - Acquires Leading Carbon Developer Camco International Limited ('Camco'), a leading company in the origination,co-development, placement and management of carbon credits under the KyotoProtocol, is pleased to announce the acquisition of Russian carbon developer,MCF Finance and Consulting Co. Ltd. ("MCF"). The acquisition strengthens Camco's position as a market leader in Russia andincreases Camco's gross carbon credit portfolio by up to 12.6m tonnes to up to116.2 million tonnes. The price paid by Camco comprises €200,000 in cash and upto €3.36m in Camco shares through a performance based earn-out structuredetermined in 12 months time. Commenting on the acquisition Tristan Fischer, Camco CEO, said: "This is anexciting transaction and complements our strong organic growth since our IPO inApril. The acquisition makes us one of the largest private-sector carbon playersin Russia, building on our market leading position in China and executing thestrategy set at IPO. Apart from the significant increase in our carbonportfolio, the acquisition of MCF gives us improved access to scarce andimportant skills in the technical aspects of carbon origination and development,which will also benefit our global business moving forward." "As we outlined at IPO, Russia is a key market for Camco. The Russian economyhas high levels of energy consumption and carbon emissions. Many investments inthe modernisation of the Russian economy will be carried out under the JointImplementation (JI) Procedure, one of the three flexible mechanisms establishedby the Kyoto Protocol to generate Carbon Credits. It has been estimated that atotal of 500 million tCO2e could be generated by JI Projects in Russia." The MCF portfolio acquired by Camco is broken down as follows: - Up to 6.8m tonnes (gross) under exclusive Carbon Asset DevelopmentAgreements (CADA) from projects involving waste to energy, fuel switching incement production, methane avoidance in gas distribution networks and geothermalenergy; and- Up to 5.8m tonnes (gross) in late stage negotiation from projectsinvolving the destruction of chemical waste gases. Based on the current status of the MCF portfolio, Camco expects to own up to2.3m (net) carbon credits in specie, which will later be sold at prevailingprices. The cost per gross tonne paid by Camco to MCF shareholders is at a significantdiscount to that applied to Camco's current portfolio and largely works on an'earn-out basis'. MCF shareholders will be paid based on their success in delivering validated projects under existing and impending CADAs in the project portfolio. In all cases, Camco shares will be issued at a price no less than 64p and may behigher, depending upon the average trading price of Camco shares between now andthe allocation date in August 2007. If earned, Camco shares will be allocated in12 months but not actually issued to MCF shareholders for a further 12 months,around August 2008. Contact: Camco International LimitedTristan Fischer, CEO 020 7256 7979 Gavin Anderson & Company (for media enquiries)Ken Cronin/Janine Brewis 020 7554 1400 Notes to editors: MCF was founded in 1996 and is an early mover in advising on and, more recently,dealing in climate change issues impacting Russian industry. MCF featuresseveral leading specialists in carbon credit origination and qualification whohave worked closely with Camco over the past 12 months. MCF's team of 6 personsbased in Moscow and Archangel will become employees of Camco. Under the Kyoto Protocol, signatories such as Canada, Japan and the EU 15 arerequired to reduce their output of green house gases in an effort to mitigateclimate change. They can do this by taking domestic action to cut emissions orby buying Carbon Credits from qualifying projects. Camco's key markets are China and Russia, where the Company has significantexpertise and market presence. These key markets are expected to be two of thelargest potential sources of Carbon Credits under the Kyoto Protocol in comingyears. In other regions, Camco is developing business through its strategicpartners. The Carbon Credits in Camco's portfolio are intended to be sold into theinternational emissions trading markets, and can be purchased by governments andcompanies to help them meet their emission targets, particularly under the KyotoProtocol and the EU Emissions Trading Scheme. Camco's principal strategy is to offer an origination to delivery service,at-risk remuneration and a value sharing business model. It does not investsubstantial amounts of its own capital in the physical assets used to generategreenhouse gas reductions. This information is provided by RNS The company news service from the London Stock Exchange