30th Apr 2014 15:45
LONDON (Alliance News) - Powerhouse Energy Group PLC Wednesday said it has yet to pay the EUR211,000 cash element of a bigger settlement it agreed with RenewMe Ltd to regain complete control of its Pyromex licences worldwide, and might become reliant on a convertible loan deal it has if can't raise new funds to pay the consideration.
On March 3, Powerhouse Energy said it had agreed to pay RenewMe EUR211,000 in cash and issue it 18.3 million shares, or 5% of PowerHouse, in order to fully settle amounts due to RenewMe.
PowerHouse was unable to make some payments to RenewMe in June 2012 and June 2013 after both PowerHouse and Pyromex Holding AG entered into an agreement to pay RenewMe EUR200,000 per year for five years beginning June 2011, resulting in PowerHouse posting a EUR800,000 liability in its 2012 accounts.
Under the terms of the settlement, RenewMe was to relinquish its exclusive licences to use the Pyromex waste-to-energy system in the UK, Ireland, India, Scandinavia and the Benelux countries to PowerHouse in return for the cash and shares.
However, Wednesday, Powerhouse said it still has to pay the cash element of the settlement, and believes that RenewMe has verbally agreed that the cash payment could be made out of the proceeds of a fund raising that PowerHouse is currently pursuing.
"In the event that the fundraising does not proceed, the company will be reliant on Hillgrove Investments Pty Ltd providing the necessary funds under the Convertible Loan Agreement dated 18 October 2012 and RenewMe accepting the cash payment in full and final settlement on the terms previously agreed with RenewMe," the company warned in its statement.
"On 28 June 2013, Hillgrove provided the company with a letter of financial support to ensure the company continues to meet its obligations as they fall due and to ensure it operates as a going concern for a period of at least 12 months," it added.
Powerhouse Energy shares closed down 20% at 2.2 pence Wednesday.
By Steve McGrath; [email protected]; @SteveMcGrath1
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