11th May 2009 07:00
11 May 2009
Renewable Energy Holdings plc
("REH" or "the Company")
Sale of wave energy Intellectual Property to Carnegie Corporation
Renewable Energy Holdings plc (AIM: REH), the AIM quoted investor and operator of proven and innovative renewable energy technologies, is pleased to announce that it has entered into a heads of agreement to sell its wave energy patent portfolio ("IP"), known as CETO, to ASX-listed Carnegie Corporation Limited ("Carnegie") for approximately £30 million by reference to Carnegie's closing share price of 24 cents on 8 May 2009, subject to the satisfaction of certain conditions as set out below.
The consideration is to be satisfied by the issue of 252,000,000 fully paid new ordinary shares of Carnegie to REH. This holding would make REH a 35% shareholder of Carnegie. Issuance of the shares by Carnegie will also represent in part final payment in relation to the amounts due to REH under the agreement announced in August 2007.
Carnegie is an Australian wave energy and clean technology developer that has a joint venture licence relationship with REH in the Southern Hemisphere to develop the CETO Wave Energy technology. Along with the patent portfolio and other intellectual property, Carnegie will acquire REH's commercial site pipeline and assume responsibility for the Company's relationship with EDF Energies Nouvelles SA. This is a joint venture licence relationship in the Northern Hemisphere to own and operate CETO Wave Power Projects.
REH's Chief Executive Officer, Mike Proffitt, said:
"The Board is confident that this transaction will deliver value to both REH and Carnegie's shareholders. We believe that it is a logical development to combine both the IP and the know-how in a single entity while crystallising value for REH Shareholders. Upon CETO reaching commercialisation, this transaction will allow REH Shareholders to continue to participate in the future revenues generated by its world-wide roll-out."
"We are delighted to become Carnegie's largest shareholder and intend to be long term, strategic holders, thus demonstrating REH's continuing confidence in the CETO technology and its future value. Without the financial responsibility for CETO development, REH will now concentrate on developing its cash-flows from late stage, renewable technologies such as Wind, Solar and Hydro."
Carnegie's Managing Director, Dr Michael Ottaviano, commented:
"This transaction will deliver significant value to Carnegie shareholders in opening up Northern Hemisphere opportunities for us in the United States, Europe and across Asia. Whilst the Southern Hemisphere has a superior wave resource, approximately 90% of global power consumption occurs in the Northern Hemisphere. Additionally, many locations in the Northern Hemisphere have very attractive markets for renewable energy including some with targeted wave energy feed-in tariffs. We look forward to working closely with EDF EN in developing these Northern Hemisphere markets."
For further information, please contact:
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Renewable Energy Holdings plc |
Tel: 01624 641199 |
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Mike Proffitt, Chief Executive |
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Ambrian Partners - Nominated Adviser & broker |
Tel: 020 7634 7405 |
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Richard Swindells / Andrew Craig |
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Financial Dynamics |
Tel: 020 7831 3113 |
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Jonathon Brill/Billy Clegg/Edward Westropp/Alex Beagley |
Acquisition Details
Pursuant to the conditional terms of a Heads of Agreement (HoA) , Carnegie will issue to REH 252 million fully paid new ordinary shares in exchange for REH's CETO Wave Energy Technology. The deal secures Carnegie the global development rights for CETO, and provides it with access to the Northern Hemisphere markets partnering with EDF EN, a 51% subsidiary of French power utility Electricity de France (EDF), one of the largest power generation companies in the world.
The acquisition is subject to the approval of Carnegie's ordinary shareholders.
Upon completion of the transaction, expected to be in September 2009 ("Completion"), Carnegie will take over the funding responsibility for the remaining CETO technology development. The acquisition is conditional upon Carnegie having a cash balance to complete the current development budget of AUD$2m at completion. Upon completion, the existing Southern Hemisphere Licence Agreement, including the existing AU$2 million payment that was outstanding as part of the initial Licence Agreement and obligations associated with CETO project licence fees and royalties, will be superseded.
The transaction is conditional upon inter alia:
Completion of satisfactory due diligence by both parties on or before 31 May 2009;
Carnegie providing evidence that it has sufficient funds to cover the current CETO operating budget of approximately AUD$2m at Completion;
Shareholder approval by Carnegie shareholders;
Carnegie obtaining an independent expert's report confirming that the transaction is fair and reasonable to non-associated shareholders of Carnegie;
REH receiving Foreign Investment Review Board ("FIRB") approval; and
If required by Chapter 9 of the Listing Rules of the ASX, REH entering into a restriction agreement in relation to its 35% holding in Carnegie which may restrict REH's ability to trade its shares in Carnegie for a set period of time.
Upon completion, REH will have the opportunity to appoint a further nominee director to the Board of Carnegie, in addition to current REH directors Alan Burns and Michael Proffitt. Alan Burns and Michael Proffitt, being common directors of both companies, have removed themselves from Board matters concerning the transaction. Completion of the Transaction will represent a related party transaction for REH pursuant to Rule 13 of the AIM Rules for Companies. REH will make the appropriate disclosures in order to satisfy AIM Rule 13 in due course.
The proposed timetable anticipates the convening of a Carnegie shareholders meeting in early September to consider the transaction with completion expected by mid September 2009. A Notice of Meeting and associated materials specific to this transaction will be forwarded to shareholders of Carnegie in due course.
Related Shares:
REH.L