VANCOUVER,
Feb. 12, 2013 /CNW/ - Lignol Energy
Corporation (TSXV: LEC) ("LEC" or "the Company"), a leading
technology company in the advanced biofuels and renewable chemicals
sector, today announced its participation in a Private Placement
and Rights Offering financing undertaken by Australian
Renewable Fuels Limited (ASX: ARW) which will result in LEC
becoming one of the largest shareholders in ARW.
On February 7,
2103, ARW announced that its proposed takeover bid for all
of the outstanding shares of Wentworth Holdings Limited (ASX: WWM)
("Wentworth") is expected lapse on February
15, 2013. ARW announced it had instead proposed an
alternative capital raising mechanism to raise A$12.3 million at A$0.007 per share, comprising an immediate
private placement of A$4.27 million
(the "ARW Placement") and an underwritten rights offering
of A$8 million to ARW
shareholders at A$0.007 per share
with the ability of shareholders to apply for oversubscriptions
(the "ARW Entitlement Offer").
The ARW Placement of A$4.27 million successfully closed on
February 12, 2013 and the ARW
Entitlement Offer is expected to close on March 5, 2013. Through these transactions, LEC
intends to make a further investment in ARW of approximately
A$2.67 million and acquire a further
381,660,715 million ordinary shares in ARW as follows:
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178,571,429 ordinary shares were acquired through the ARW
Placement; and |
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(ii) |
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203,089,286 ordinary shares are expected to be acquired through
LEC's participation rights in the ARW Entitlement Offer. |
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Upon completion of these two transactions, LEC
expects to hold a total of 744,660,715 ordinary shares of ARW, or
approximately 17.75% percent of ARW.
Furthermore, in connection with the ARW
Entitlement Offer, Wentworth and
Thorney Holding Pty Ltd. ("Thorney") have agreed to underwrite any
shortfall under the ARW Entitlement Offer. Subject to the
completion of definitive documentation, LEC has committed to
participate in the underwriting obligation with Wentworth and Thorney up to a maximum of
A$1.75 million. Should the ARW
Entitlement Offer not be fully subscribed, then LEC will have an
obligation to acquire further shares of ARW.
The above transactions will be funded by the
Company's existing cash and by a proposed line of credit of
C$5 million to be provided by one of
LEC's major shareholders, Difference Capital Funding Inc.
("DCF"). It is currently proposed that DCF will provide LEC
with a line of credit bearing interest at 8% per annum on the drawn
amount. The term of the credit facility will be the earlier of one
year or until completion of a further equity financing. Funds
drawn on this facility will be secured on a sole recourse basis
against all of the ARW ordinary shares owned by LEC.
About Lignol Energy Corporation
("LEC")
LEC (TSXV: LEC) owns 100% of the issued and
voting shares of Lignol Innovations Ltd. ("LIL") and is one of the
largest shareholders of Australian Renewable Fuels Ltd (ASX: ARW).
LEC also intends to invest in, or otherwise obtain, equity
interests in energy related projects which have synergies with its
biorefining technology.
LIL is a leading technology company in the
advanced biofuels and renewable chemicals sector undertaking the
development of biorefining technologies for the production of
advanced biofuels, including fuel-grade ethanol, and other
renewable chemicals from non-food cellulosic biomass feedstocks.
LIL's modified solvent based pre-treatment technology facilitates
the rapid, high-yield conversion of cellulose to ethanol and the
production of value-added biochemical co-products, including high
purity HP-LTM lignins. HP-LTM lignin
represents a new class of high purity lignin extractives (and their
subsequent derivatives) which can be engineered to meet the
chemical properties and functional requirements of a range of
industrial applications that until now has not been possible with
traditional lignin by-products generated from other processes. LIL
is executing on its development plan through strategic partnerships
to further develop and integrate its core technologies on a
commercial scale. For more information please visit Lignol's
website at www.lignol.ca.
ARW is the largest biodiesel producer in
Australia owning three plants with
a total nameplate capacity of 150 million litres per annum. ARW's
three plants were built at an aggregate cost of approximately
A$150 million. ARW has made
significant changes in recent years to become a cost effective
producer of high quality biodiesel to address growing biofuel
demand in the Australian market. ARW has recently announced
proposed transactions to raise a combined A$12.3 million in cash through a placement and an
entitlement offer. More information on ARW can be found at
their website; www.arfuels.com.au
Neither TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
Caution concerning forward-looking statements:
Certain statements contained in this document
may constitute forward-looking information within the meaning of
applicable securities laws. Such forward-looking statements or
information include, without limitation, statements or information
about LEC's ability to participate in and ARW's ability to close on
its planned financing, the availability of a sufficient number of
undersubscriptions to allow LEC to subscribe for the
oversubscriptions described above and LEC's ability to finance such
acquisitions of shares of ARW using funds to be made available by
Difference Capital, LEC's and Difference Capital's ability to agree
to the terms of a line of credit prior to the closing of the ARW
Entitlement Offer, the Company's plans with respect to its
investment in ARW, the Company's ability to continue as a
going concern and to raise additional financing to fund the
operations of LEC, LIL, and its proposed investments in ARW, the
development status of LIL's fully integrated pilot scale
biorefinery in Burnaby, British
Columbia, the planning and development of a commercial
plant, LIL's ability to complete project deliverables which are
funded in part by government agencies, obtaining strategic
partnership investments and government funding for initial
commercial projects. Often, but not always, forward looking
statements or information can be identified by the use of words
such as "plans", "expects" or "does not expect", "is expected",
"budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates" or "does not anticipate", or "believes" or variations
of such words and phrases or words and phrases that state or
indicate that certain actions, events or results "may", "could",
"would", "might" or "will" be taken, occur or be achieved.
Such statements or information reflect LEC's
current views with respect to future events and are subject to
certain risks, uncertainties and assumptions including, without
limitation, LEC's ability to raise additional capital to fund the
investments in ARW, and LEC's and LIL's working capital, our
ability to establish the validity of LIL's technology at the fully
integrated biorefinery pilot plant scale, LIL's ability to satisfy
the conditions of existing government grants and to obtain new
additional grants, our ability to continue to finance our
operations and to finance and complete the development of a
commercial project, LIL's ability to work with Novozymes to produce
cellulosic ethanol at production costs competitive with gasoline
and corn ethanol, LIL's ability to develop products and to obtain
off-take agreements, our ability to obtain requisite regulatory
approvals and our ability to enter into agreements with strategic
partners on terms acceptable to us, the inability to influence the
strategy, operations and financial performance of ARW, the reliance
on publicly available information of ARW in the Company's
evaluation of its acquisition of shares in ARW, the potential
inability to divest the ARW ordinary shares due to modest trading
volumes, the cost of future ARW capital investment, the fluctuation
of biodiesel and feedstock prices on ARW, the effect on ARW of
changes in government policy relating to the environment, and
incentives for renewable fuels. Many factors could cause LEC's
actual results, performance or achievements to be materially
different from any future results, performance or achievements that
may be expressed or implied by such forward-looking statements or
information, including among other things, the technological
challenges that remain to be surpassed in obtaining the necessary
operating data from Lignol's fully integrated biorefinery pilot
plant that is required prior to completing the next scale-up of the
technology, financial market conditions which will impact our
ability to finance our operations and to finance the construction
and operation of a commercial plant, the price of gasoline and
demand for ethanol, the market pricing and demand for renewable
chemicals, risks relating to the protection of Lignol's core
technology from infringement and those risk factors which are
discussed elsewhere in documents that LEC files from time to time
with securities regulatory authorities. Should one or more of these
risks or uncertainties materialize, or should assumptions
underlying the forward-looking statements or information prove
incorrect, actual results may vary materially from those described
herein as intended planned, anticipated, believed, estimated or
expected. Except as required by law, the Company expressly
disclaims any intention or obligation to update or revise any
forward looking statements and information whether as a result of
new information, future events or otherwise. All written and oral
forward-looking statements and information attributable to us or
persons acting on our behalf are expressly qualified in their
entirety by the foregoing cautionary statements.
SOURCE Lignol Energy Corporation