14th Jan 2008 07:01
Renewable Energy Holdings plc14 January 2008 14 January 2008 Renewable Energy Holdings plc ("REH" or "the Company") EDF Energies Nouvelles collaboration and investment Renewable Energy Holdings plc (AIM: REH), the investor and operator of provenand innovative renewable energy technologies, is pleased to announce that theCompany has entered into a collaboration agreement ("Collaboration Agreement")with EDF Energies Nouvelles SA ("EDF EN") relating to REH's CETO wave powertechnology. This follows the announcement of 27 July 2007 that the companieshad entered into a Memorandum of Understanding. The terms of the Collaboration Agreement will permit EDF EN exclusively todevelop offshore wave power projects in the Northern Hemisphere and at ReunionIsland in the Indian Ocean (together, the "Territory of Exclusivity"), usingREH's proprietary CETO wave power technology. Further information on the termsof the Collaboration Agreement is set out in the Appendix to this announcement. In addition, also as announced on 27 July 2007, under the terms of theCollaboration Agreement EDF EN has today invested a total of £3.0 million inREH. Mike Proffitt, Chief Executive Officer of REH, commented: "We are very pleased indeed to have concluded our CETO Collaboration Agreementwith EDF EN and we look forward to working with them to develop CETO wave powerprojects across the Northern Hemisphere. "EDF EN's interest in the CETO wave power technology demonstrates that the CETOwave energy device has an exciting commercial future ahead and the potential tobe a global success." Paris Mouratoglou, Chairman of EDF Energies Nouvelles, said: "EDF Energies Nouvelles is committed to develop new renewable energytechnologies. The wave energy potential is very significant and has beenidentified as one of our future sources for growth. We are delighted to announcethe signing of our final agreement with REH and look forward to a successfuldevelopment of the promising CETO technology." EDF EN's £3.0 million investment in REH is structured as follows: 1. EDF EN has subscribed £1.5 million for 3.0 million new ordinary sharesof 1 pence each in REH ("New Ordinary Shares") at a price of 50 pence per newordinary share (the "Equity Payment"). The Equity Payment which has been paidinto an escrow account administered by REH's solicitors, Herbert Smith LLP, isheld to the account of REH and will be released to REH upon the followingmilestones in the commercial development of CETO being achieved: Overall Equity Milestone definition Equity Payment New Ordinary milestone released from Shares escrow attributable to milestone 1 Three CETO II units having been installed £500,000 1,000,000 and connected through the joint off-shore pipeline into the on-shore collection system. 2 30 days of performance data collection of £500,000 1,000,000 the total system (three CETO II units) having been completed. 3 CETO III prototype unit has been £500,000 1,000,000 manufactured and is ready to ship ex works. As part of the Collaboration Agreement, EDF EN has undertaken not to sell any ofthe New Ordinary Shares attributable to each particular milestone until suchtime as the milestone has been achieved and the Equity Payment amount in respectof such milestone has been released from escrow. The board of REH will issue and allot the New Ordinary Shares to EDF EN withinthe next week and application will be made for the New Ordinary Shares to beadmitted to trading on AIM shortly thereafter. 2. EDF EN has subscribed £1.5 million as convertible loan notes ("CLNs")convertible into an aggregate 3.0 million New Ordinary Shares at a price of 50pence per New Ordinary Share (the "CLN Payment"). The CLN Payment has been paidinto an escrow account administered by REH's solicitors, Herbert Smith LLP, andwill be released to REH upon the following milestones in the commercialdevelopment of CETO being achieved: Overall Convertible Loan Note Milestone definition CLN Payment New Ordinary milestone released from Shares escrow attributable to CLN Payment 4 One CETO III unit has been installed and £750,000 1,500,000 connected to a high pressure flexible hose from the CETO III unit outlet to an adjacent support vessel. 5 45 days of performance data collection has £750,000 1,500,000 been completed in respect of the CETO III. Upon REH achieving either milestone 4 or 5 above, as well as the correspondingCLN Payment amount being released from escrow, £750,000 of the CLNs will convertinto 1,500,000 New Ordinary Shares which will be issued and allotted to EDF EN.Upon such conversion taking place, the Company will apply for the New OrdinaryShares issued and allotted to EDF EN to be admitted to trading on AIM. Under certain circumstances, such as REH failing to achieve milestones 4 and 5above, EDF EN can require REH to redeem the CLNs in full for cash. The CLNs will be unsecured and will not attract a coupon. Under the terms of the Collaboration Agreement, REH and EDF EN will nowestablish a joint venture corporate vehicle ("JV") to be owned as to 49.0% and51.0% by each party respectively. The JV will seek to identify and progresssuitable CETO installation project sites in the Territory of Exclusivity priorto placing each CETO project that is deemed viable into a separate specialpurpose company ("SPC") where it will be developed and operated. For further information please contact: Mike Proffitt, Chief ExecutiveRenewable Energy Holdings plc Tel: 01624 641199 Richard SwindellsNabarro Wells - Nominated Adviser to REH Tel: 020 7710 7400 Katherine RoePanmure Gordon - Broker to REH Tel: 020 7459 3600 Emma Kane / Samantha Robbins / Paul DulieuRedleaf Communications Tel: 020 7822 0200 Appendix Further information on the Collaboration Agreement Under the terms of the Collaboration Agreement, REH will have the right, but notthe obligation, to participate in each CETO wave power project developed by EDFEN in the Territory of Exclusivity. In the event REH does not exercise its rightto participate in any such project, EDF EN will have the right to develop suchproject with any partner of its choice. Each project will be developed by aseparately established SPC. In any project in which REH chooses to participate,REH will be entitled to an equity interest of between 25% and 49% in each SPC,depending on the installed capacity of the project being developed. It isexpected that each project will be financed by a combination of equity and debt,with the equity contributions being in proportion to the parties' respectiveownership interests in the SPC. All intellectual property rights relating toCETO will however remain the property of REH, which will grant licences to theSPCs to use the technology on a project-by-project basis in return for a licencepayment to the value of 3% (dropping to 2% in certain circumstances) of thetotal costs of each project. About Renewable Energy Holdings • Renewable Energy Holdings is an international company established to be an operator of, and undertake active investment in, both proven and innovative renewable energy technologies. • REH owns two operational wind farm sites is Germany, Kesfeld (32.5MW) and Kirf (8MW). In addition, REH is at various stages of development of further wind farm sites in Poland and Wales. • REH owns a 1MW methane Landfill Gas Project in Powys, Wales. • CETO is REH's innovative wave power technology. It is the first wave power converter to sit on the seabed, where it is invisible, safe from storms and ocean forces, and self contained. Unlike other wave energy technologies that require undersea grids and costly marine qualified plant, CETO requires only a small diameter pipe to carry high pressure seawater ashore to either a turbine to produce electricity, or to a reverse osmosis filter to produce fresh water. • The Directors and executive team of REH have extensive experience in both the conventional and renewable energy sectors, both in the UK and overseas, and through their experience have built a broad international network of relationships with individuals, companies, governments and lobby groups. • The Company was incorporated in the Isle of Man on 8 October 2004 and listed on the London Stock Exchange's AIM Market in February 2005. • Further information can be found at www.reh-plc.com About CETO The CETO device is a proprietary technology that converts the energy of wavesinto electricity and freshwater. CETO is the first wave power converter to sit on the seabed, where it isinvisible, safe from storms and ocean forces, and self contained. Unlike otherwave energy technologies that require undersea grids and costly marine qualifiedplant, CETO requires only a small diameter pipe to carry high pressure seawaterashore to either a turbine to produce electricity, or to a reverse osmosisfilter to produce fresh water. The device consists primarily of a novel pump anchored to the seafloor anddriven by a spherical buoyant actuator that collects the wave energy andtransmits it to the pump. High pressure seawater is delivered ashore where itcan be used to drive a turbine to generate electricity or passed through areverse osmosis desalination unit to produce freshwater. One of the mainadvantages CETO has over the current generation of desalination plants is thatthe energy used to pump the seawater through the desalinator is 100% clean andrenewable as opposed to pumps driven by energy sourced from fossil-fuels. As aresult the CETO device can truly claim to produce zero-emission electricity andfreshwater. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
REH.L