CFU secures strategic investor

Tuesday 11 September 2012

Investment by strategic supplier

Subscription to raise AUD 6 million (GBP 3.9 million) at six cents per share

Ceramic Fuel Cells Limited (AIM / ASX: CFU) a leading developer of small generators that use fuel cell technology to convert natural gas into electricity and heat for homes and other buildings, announces that it has entered an agreement to raise AUD 6 million (GBP 3.9 million) from one of its strategic supply partners.

CFCL proposes to raise AUD 6 million by way of a subscription of 100 million new ordinary shares at an issue price of six cents per share (the "Subscription") with a wholly owned subsidiary of Chaozhou Three-Circle (Group) Co., Ltd ("CCTC").

CCTC, based in Guangdong province, China, is a leading manufacturer of electronic components and advanced ceramics and is one of CFCL's key suppliers.

CFCL has outsourced the commercial manufacturing of its fuel cell components to CCTC, which is making the fuel cell parts to CFCL's design and specification. The two companies have worked closely together to transfer CFCL's commercial cell production to CCTC, which has invested heavily in developing and building its own purpose-built manufacturing equipment specifically to make CFCL's cells. CFCL is also working with CCTC to outsource other manufacturing processes and component supply, to increase volume and reduce CFCL's product costs.

The issue price to CCTC is the same as the issue price under the Rights Issue and Overseas Offer announced on 24 July 2012. The closing date for both these offers is Monday 17 September 2012.

All Directors who are eligible to participate in the Rights Issue intend to take up their entitlements in whole or in part or subscribe under the Overseas Offer, as the case may be.

Further details:

·; The Company has agreed to issue 100 million new ordinary shares at a price of six cents per share to raise AUD 6 million. This price represents a premium of 11 percent to the closing price on ASX on 10 September, of 5.5 cents. The issue price is the same as the offer price in the Rights Issue announced on 24 July 2012.

·; The subscription by CCTC is subject to CCTC receiving approvals from relevant regulators in China. CCTC has undertaken to CFCL to use its best efforts to obtain these approvals by 28 September 2012.

·; The shares will be issued to CCTC without shareholder approval, under the Company's 15 percent placement capacity in the ASX Listing Rules.

·; Following Admission of the Subscription shares (and before any share issue under the rights issue or overseas offer) the Company will have 1,466,298,863 Ordinary Shares in issue. The new shares issued to CCTC will represent 6.8 percent of this enlarged share capital.

More information about the Company and our recent activities, including our announcements and financial reports, is available at the Company's website, www.cfcl.com.au.

About Ceramic Fuel Cells Limited:

Ceramic Fuel Cells is a world leader in developing fuel cell technology to generate highly efficient and low-emission electricity from widely available natural gas. Ceramic Fuel Cells has sold its BlueGen gas-to-electricity generator to major utilities and other foundation customers in Germany, the United Kingdom, Switzerland, The Netherlands, Italy, Japan, Australia, and the USA. Ceramic Fuel Cells is also developing fully integrated power and heating products with leading energy companies E.ON UK in the United Kingdom, GdF Suez in France and EWE in Germany.

The company is listed on the London Stock Exchange AIM market and the Australian Securities Exchange (code CFU).

www.cfcl.com.au