RED.L Regulatory News (RED)

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA, THE REPUBLIC OF IRELAND OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

FURTHER, THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND SHALL NOT CONSTITUTE AN OFFER TO SELL OR ISSUE OR THE SOLICITATION OF AN OFFER TO BUY, SUBSCRIBE FOR OR OTHERWISE ACQUIRE ANY NEW ORDINARY SHARES OF REDT ENERGY PLC IN ANY JURISDICTION IN WHICH ANY SUCH OFFER, ISSUE OR SOLICITATION WOULD BE UNLAWFUL.

20 January 2016

redT energy plc

("redT energy" or the "Company")

Conditional placing of 51,851,852 new ordinary shares to raise £3.5 million

The board of redT energy plc ("redT energy" or the "Company") today announces that it has conditionally raised approximately £3.5 million (before expenses) by a conditional placing by finnCap, acting as agent for the Company, of 51,851,852 Placing Shares at a price of 6.75 pence per Placing Share.

Summary of the Placing

· Placing of 51,851,852 Placing Shares at a price of 6.75 pence per Placing Share to raise approximately £3.5 million before expenses (approximately £3.3 million net of expenses)

· Support from new and existing institutional shareholders

· Placing subject to approval of the Company's shareholders at the General Meeting to be held at 11.00 a.m. on 9 February 2016

· Proceeds to be used for additional working capital

Commenting on the placing, Scott McGregor, Chief Executive of redT energy, said:

"Today's placing provides us with a robust financial position from which to focus on the rolling out of our initial "market seeding" units and transition to full commercial sales. We have endeavoured to keep the dilution of existing shareholders to a minimum at a price taking account of levels over the past months, whilst ensuring a sufficiently strong balance sheet at this exciting stage of the company's development.

As evidenced by our recent contract announcements, including a German industrial and an EU utility company, we are experiencing encouraging levels of interest from a broad customer base. We expect this to continue and believe we are well placed to capitalise on the growing international demand for our energy storage system."

Background to and Reasons for the Placing

The past six months has been a transformational period for the Group as it has exited its legacy biogas assets to become a more focussed group, with the redT energy storage technology at the heart of the Group's future plans.

Central to this development process was the announcement made on 30 September 2015, that the Company had reached agreement with certain of the other then joint venture shareholders in REDH, the holding company of the Energy Storage Business, to acquire their shares in REDH. Since then, the Company has been able to further consolidate its interest in REDH. The Company now has effective voting control over 100 per cent. of the shares in REDH and an economic interest in 99.7 per cent. of REDH.

Furthermore, as announced on 17 November 2015 and completed on 23 December 2015, the Company has sold its entire interest in AgPower Jerome, LLC and AgPower DCD, LLC, respectively the owners of the Jerome and Twin Falls biogas facilities for $4.6 million in aggregate. $2.0 million of the consideration was settled in cash on completion with the remaining $2.6 million to be settled in cash within 12 months from the date of completion. In addition, the Company may receive up to an additional $1.0 million in cash in deferred consideration dependent on the performance of AgPower Jerome, LLC in the period to 31 December 2016 and up to two years from the date of completion payable in two equal instalments.

The Company is now focused on delivering market seeding units of the redT energy storage technology and continuing to work with Jabil Circuit Inc., the Group's manufacturing partner, in driving product unit production costs down and to ensure the smooth installation and commissioning of market seeding units. To date four units have been delivered in various jurisdictions and the Directors expect a further eight to be delivered during the course of 2016. On 2 December 2015, the Company announced that its first manufactured unit had been approved for connection to the UK grid and that units will receive the CE mark, enabling EU wide distribution. Later, on 14 December 2015, the Company announced its latest orders to deliver 5-40kWh energy storage systems to two separate customers.

As market seeding units are installed and successfully commissioned they will be used as the basis for the Company's marketing of the redT energy storage technology with a view to achieving commercial roll-out of the product. Whilst in this phase of development the Group will continue to be cash consumptive. At 31 December 2015, the Company had cash reserves of €2.9 million all of which were unrestricted (compared to €3.4 million of unrestricted cash and €0.8 million of restricted cash as at 30 June 2015.) The cash balance as at 31 December 2015 does not include the $2.6 million consideration from the disposal of the US biogas facilities referred to above nor additional consideration of $0.6 million due from the sale of other legacy US Carbon assets announced on 2 June 2015. The majority of these amounts are expected to be received in the first quarter of 2016.

Whilst the Directors believe the Group's cash resources are sufficient for its present requirements, given the inherent uncertainty as to the precise timing of the commercial roll-out of the redT energy storage technology, as with any new technology, the Board considers it would be prudent to raise a modest amount of additional funding at this stage, pending the Company becoming cashflow positive.

Details of the Placing

The Company has today announced that it intends to raise approximately £3.5 million, before expenses, through a conditional placing by finnCap of 51,851,852 Placing Shares at the Placing Price. The Placing Shares will, following allotment, rank pari passu with the Existing Shares.

The Placing is conditional, inter alia, upon the passing of the Resolution at the General Meeting, the Placing Agreement becoming unconditional and Admission becoming effective in each case by no later than 8.00 a.m. on 10 February 2016 (or such time and date as the Company and finnCap may agree, being not later than 8.00 a.m. on 29 February 2016). The Placing is not being underwritten.

Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM. It is expected that Admission will become effective and dealings in the Placing Shares will commence at 8.00 a.m. on 10 February 2016.

Irrevocable Undertakings and Letters of Intent

Certain Shareholders have provided the Company and finnCap with irrevocable undertakings to vote in favour of the Resolution in respect of their own beneficial holdings of Ordinary Shares, totalling, in aggregate, 136,866,317 Ordinary Shares, representing, in aggregate, 33.4 per cent. of the Existing Shares.

In addition, certain Shareholders have provided the Company and finnCap with non-binding letters of intent confirming their intention to vote in favour of the Resolution in respect of their own beneficial holdings of Ordinary Shares, totalling, in aggregate, 10,150,000 Ordinary Shares, representing, in aggregate, 2.5 per cent. of the Existing Shares.

In addition, the Directors all intend to vote in favour of the Resolution in respect of their own beneficial holdings of Ordinary Shares, representing, in aggregate, 4.6 per cent. of the Existing Shares.

Accordingly, there is support for the Proposals from Shareholders in respect of, in aggregate, 165,937,998 Ordinary Shares, representing 40.5 per cent. of the Company's Existing Shares.

General Meeting

A notice convening the General Meeting, to be held at the offices of finnCap, 60 New Broad Street, London EC2M 1JJ at 11.00 a.m. on 9 February 2016 is set out at the end of the Circular at which the Resolution will be proposed for the purposes of implementing the Placing.

Admission

Application will be made to the London Stock Exchange for Admission and for dealings in the Placing Shares to commence at 8.00 a.m. on 10 February 2016. The Placing Shares, when issued, will rank pari passu in all respects with the Existing Shares including the right to receive dividends and other distributions declared following Admission. Following Admission, there will be 461,685,079 Ordinary Shares in issue.

Unless otherwise defined herein, terms defined in the circular posted to Shareholders on 20 January 2016 and available on the Company's website http://www.redtenergy.com/investors shall have the same meanings in this announcement.

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About redT energy

redT energy develops and supplies durable and robust energy storage systems based on proprietary vanadium redox flow technology for on and off-grid applications. The liquid storage medium affords an exceptionally long life of over 10,000 full charge/discharge cycles and a 100 per cent. usable depth of discharge. Combined with low maintenance requirements this delivers industry leading levelised cost of storage (LCOS) and total cost of ownership (TCO) results. The modular approach allows the power and energy components of systems to be independently sized to meet customer requirements.

Until now it has not been possible to directly compare variable renewable energy generation sources with firm diesel or fossil fuel generation. PV + Storage is now reaching 'grid parity' in many countries, a paradigm shift in energy production, which will ultimately enable a distributed energy network optimising conventional and renewable generation. The redT energy system has applications in remote power, smart grids, power quality, and all aspects of renewable energy management.