TIDMAFC
RNS Number : 9316A
AFC Energy Plc
27 January 2020
The information communicated within this announcement is deemed
to constitute inside information as stipulated under the Market
Abuse Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
27 January 2020
AFC Energy PLC
("AFC Energy" or the "Company")
AFC Energy and HiiROC Agree Terms to Unlock Natural Gas as Zero
Emission Hydrogen Fuel
AFC Energy (AIM: AFC), a leading provider of hydrogen power
generation technologies, is pleased to announce it has entered into
a binding Heads of Agreement ("Heads of Agreement") with UK based
green hydrogen generation technology developer, HiiROC Limited
("HiiROC").
HiiROC's plasma-based technology has proven its ability in early
testing, to extract Hydrogen from methane and biomethane, readily
available from incumbent gas networks, without the emission of
CO(2) or other harmful greenhouse gases. The green Hydrogen
produced from this technique has in turn the possibility of fueling
AFC Energy's H-Power fuel cell systems, thereby opening up methane
as a candidate carrier of green Hydrogen for AFC Energy's low-cost
power generation.
Highlights
-- HiiROC's technology platform looks to, as distinct from steam
methane reforming, produce clean, zero CO(2) emission hydrogen
through a unique plasma process fuelled by natural gas or biogas,
converting hydrocarbons (CH(4) ) into a clean hydrogen stream and a
high value solid carbon ("carbon black").
-- Under the binding Heads of Agreement, AFC Energy and HiiROC have agreed to enter into a Commercialisation Agreement intended to include the following provisions:
o AFC Energy to obtain global preferential rights to integrate
HiiROC's plasma-based technology with the Company's proprietary
H-Power fuel cell, including an initial reduction in Hydrogen cost
to AFC Energy derived from the system cumulatively valued at
GBP2m.
o AFC Energy to also be granted exclusive rights to HiiROC's
technology in key regions, including the UK, Europe and Australia,
in the field of electrified transportation, including electric
vehicles.
o Integration of the HiiROC and AFC Energy technology platforms,
which if successful, has the potential to unlock natural gas as a
zero-emission, low cost hydrogen fuel carrier.
-- It is anticipated that the Commercialisation Agreement will
contain full commercial terms and principles that the parties
intend to be bound based on the ongoing development work conducted
in 2020.
-- AFC Energy is investing GBP100,000, payable in AFC Energy
shares, into HiiROC's scaling up programme, which were allotted to
HiiROC on 24 January 2020 conditional on admission to trading on
AIM. AFC Energy also intends to make up to GBP300,000 of "in-kind"
contribution to HiiROC over 12-18 months to support the development
of a prototype unit.
Over recent years, AFC Energy has evaluated several emerging
green, low cost hydrogen generation technologies for integration
with its proprietary H-Power(TM) fuel cell systems.
For the past 9 months, the Company has been in discussions with
HiiROC regarding the potential for natural gas to be utilised as a
clean, zero CO(2) emission fuel, into the AFC Energy fuel cell
through adoption of HiiROC's unique plasma process. HiiROC's
plasma-based process acts to convert natural gas into a clean
hydrogen stream for the fuel cell, alongside gaseous carbon that
can then be quenched as a high value solid carbon ("carbon
black").
Independent analysis of gas samples derived from HiiROC's plasma
process in 2019 confirmed the potential for this technology,
initiating plans for a strategic partnership between the two
companies. With the objective of bringing to market a unique,
natural gas fueled, zero emission fuel cell system, successful
scale up of the HiiROC process could allow AFC Energy and its
customers to take advantage of low cost natural gas and existing
distribution pipelines to access one of the world's most readily
available fuels, without greenhouse emissions.
It is intended that under the terms of the Commercialisation
Agreement, AFC Energy will work alongside HiiROC to deliver a
prototype unit through 2020 which it is supporting through an
investment of GBP100,000 into HiiROC's scaling up programme,
payable in AFC Energy shares, plus up to GBP300,000 worth of
engineering, instrumentation, testing and associated support over
eighteen months. In return, AFC Energy will have pre-defined rights
including an initial reduction in hydrogen cost from the system,
cumulatively valued at GBP2 million, and access to the technology
for deployment in a number of applications, including exclusively
in EV charging across the UK, Europe and other locations.
Under the proposed terms of the Commercialisation Agreement,
HiiROC will work with AFC Energy on a preferential basis in the
development of an integrated zero emission power generation
solution and within the prototype system development, will assess
and confirm the technical and economic viability of the system.
Based on initial economic analysis, the HiiROC system has the
potential to offer a cost competitive alternative hydrogen source
and complement the Company's ammonia and direct hydrogen
opportunities, building a portfolio approach to fuel for its
customers and partners.
The GBP100,000 investment will be paid via the issue of 526,316
ordinary shares of 0.1 pence each in the capital of the Company at
the closing price on 24 January 2020 of 19 pence per share.
Application will be made to the London Stock Exchange for the new
Shares to be admitted to trading on AIM shortly ("Admission"). A
further announcement detailing when the shares will be admitted to
trading will be made in due course. The Shares will be issued
credited as fully paid and will rank in full for all dividends and
other distributions declared, made or paid after the admission of
the Shares, respectively and will otherwise be identical to and
rank on Admission pari passu in all respects with the existing
Ordinary Shares.
Following Admission, the Company will have 462,878,812 Ordinary
Shares in issue, none of which will be held in treasury.
Accordingly, the total number of voting rights in the Company will
be 462,878,812 and shareholders may use this figure as the
denominator for the calculations by which they will determine if
they are required to notify their interest in, or a change to their
interest in, the Company under the FCA's Disclosure Guidance and
Transparency Rules.
Adam Bond, Chief Executive Officer at AFC Energy, said
"Evaluation of low-cost hydrogen has been a key part of AFC
Energy's commercialisation strategy over recent years. HiiROC's
innovative new technology platform not only has the potential to
open up new green hydrogen sources but could do so whilst utilising
existing natural gas distribution infrastructure, making access to
hydrogen fuel more readily available and affordable in developed
and urban areas. While we look forwards to the results of
prototyping our H-Power(TM) system with that of HiiROC, we are also
aware of several blue ribbon partners developing project
opportunities with HiiROC which may leverage new opportunities for
AFC Energy to open new markets reaffirming the future role of
hydrogen as a key element of the world's future energy mix."
For further information, please contact:
AFC Energy plc
Adam Bond (Chief Executive Officer) +44 (0) 14 8327 6726
WH Ireland - Nominated Adviser and Joint Broker
Mike Coe (Corporate Finance)
Jasper Berry (Corporate Broking) +44 (0) 117 945 3470
M C Peat & Co LLP - Joint Broker
Charlie Peat +44 (0) 20 7104 2334
Tuva Partners - Public Relations
James Kennedy +44 (0) 7809 495 759
About AFC Energy
AFC Energy plc is commercialising a scalable alkaline fuel cell
system, to provide clean electricity for on and off grid
applications. The technology, pioneered over the past twelve years
in the UK, is now being deployed in electric vehicle chargers,
off-grid decentralised power systems and industrial gas plants as
part of a portfolio approach to the decarbonisation of local
electricity needs.
About HiiROC
HiiROC is a step-change technology for low-cost, zero-emission
Hydrogen production. HiiROC produces hydrogen through a unique
plasma process. The HiiROC solution is the innovation required to
enable the move to a 'Hydrogen Economy'.
Forward-looking statements
This announcement contains statements about AFC plc that are or
may be deemed to be "forward-looking statements".
All statements, other than statements of historical facts,
included in this announcement may be forward-looking statements.
Without limitation, any statements preceded or followed by, or that
include, the words "targets", "plans", "believes", "expects",
"aims", "intends", "will", "may", "should", "anticipates",
"estimates", "projects", "would", "could", "continue" or words or
terms of similar substance or the negative thereof, are
forward-looking statements.
These forward-looking statements are not guarantees of future
performance. These forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of any such person, or
industry results, to be materially different from any results,
performance or achievements expressed or implied by such
forward-looking statements. These forward-looking statements are
based on numerous assumptions regarding the present and future
business strategies of such persons and the environment in which
each will operate in the future. Investors should not place undue
reliance on such forward-looking statements and, save as is
required by law or regulation (including to meet the requirements
of the AIM Rules, the Prospectus Rules and/or the FSMA), AFC Energy
does not undertake any obligation to update publicly or revise any
forward-looking statements (including to reflect any change in
expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is based).
All subsequent oral or written forward-looking statements
attributed to AFC Energy plc or any persons acting on their behalf
are expressly qualified in their entirety by the cautionary
statement above. All forward-looking statements contained in this
announcement are based on information available to the directors of
AFC Energy at the date of this announcement, unless some other time
is specified in relation to them, and the posting or receipt of
this announcement shall not give rise to any implication that there
has been no change in the facts set forth herein since such
date.
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END
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