PHE Powerhouse Energy Group Plc

 
TIDMPHE 
 
Powerhouse Energy Group plc 
 
                        ("Powerhouse" or the "Company") 
 
9th September  2020 
 
                      GBP5 million Placing and Subscription 
 
             Grant of Peel Holdings Warrant for 10% of the Company 
 
Powerhouse Energy Group plc (AIM: PHE), the UK technology company pioneering 
hydrogen production from waste plastic, is pleased to announce that it has 
raised GBP5 million, before expenses, by way of a Placing and Subscription 
("Fundraising") at 2.5p per share ("Issue Price"). The Placing was arranged by 
Turner Pope Investments (TPI) Ltd ("Turner Pope"), the Company's broker, and 
was oversubscribed. 
 
The Directors believe the Fundraising will provide the necessary cash resources 
for Powerhouse to reach profitability and to implement its wider strategy for 
international growth. 
 
In addition, the Company has granted a warrant to Peel Holdings (IoM) Limited 
("Peel"), providing a conditional right to subscribe up to approximately GBP10.2 
million for up to 10% of the Company at a 10% premium to the Issue Price. 
 
The Fundraising 
 
A total of 160,000,000 new Ordinary Shares of 0.5p in the capital of the 
Company ("Ordinary Shares") have been placed at the Issue Price ("Placing 
Shares") with an international institutional investor and a small number of 
private shareholders, including the White Family (the Company's largest 
shareholder), raising GBP4 million, before expenses. A further 40,000,000 
Ordinary Shares ("Subscription Shares") will be issued to Peel, which is 
subscribing GBP1 million at the Issue Price ("Subscription Agreement"). 
 
Grant of Warrant to Peel 
 
Under the terms of the Subscription Agreement, Powerhouse has agreed to grant 
to Peel a warrant to subscribe for 371,510,069 new Ordinary Shares 
(representing 10% of the Company's issued share capital immediately following 
Admission of the Placing Shares) ("Peel Warrant"). The Peel Warrant is 
exercisable (in whole or in part) within 6 months of financial close of Protos, 
subject to a long-stop date of 2 years from the date of the grant. The exercise 
price of the Peel Warrant is 2.75p per share (being a 10% premium to the Issue 
Price).  Peel will be prohibited from trading shares issued upon exercise of 
the Peel Warrant for a period of 12 months from the date of Admission (subject 
to customary carve-outs). 
 
Peel is part of a group of companies with whom the Company has an exclusivity 
and licensing agreement in place for developments using its proprietary 
technology in the UK, the first being at the Protos Energy Park near Ellesmere 
Port, Cheshire. Between its GBP1 million subscription and potential investment of 
up to approximately GBP10.2 million through exercise of the Peel Warrant, Peel is 
expected to become a cornerstone industrial investor in the Company. 
 
The Subscription Agreement and Peel Warrant are independent of and in addition 
to the payment of the one-off GBP500,000 exclusivity fee as described in previous 
news releases. 
 
Related Party Transaction 
 
The White Family is a long-term supporter of the Company and is investing 
approximately GBP1.3 million in the Placing. The participation by the White 
Family is considered a related party transaction under the AIM rules as the 
White Family (constituting Howard White, Ben White, Josh White and Serena Eden 
Reyes-White) currently holds 26% percent of the share capital. Following the 
Fundraising the White Family will hold  Ordinary Shares representing 26% held 
by the individual White Family members as follows: 
 
Josh White - 360,122,122 Ordinary Shares 
 
Ben White - 236,214,785  Ordinary Shares 
 
Serena White-Reyes - 201,593,059 Ordinary Shares 
 
Howard White - 169,757,066 Ordinary Shares 
 
The Directors of the Company having consulted with WH Ireland, the Company's 
Nominated Adviser, consider the terms of this transaction to be fair and 
reasonable insofar as shareholders are concerned. 
 
Use of Funds 
 
The Company will apply the net funds to refine technical aspects and assist 
Peel to deliver the first commercial-scale DMG® installation at Protos, the 
first of a number of potential developments alongside Peel, as well as 
investment in personnel, office and other resources to capitalise on further UK 
and international sales and partnership opportunities. 
 
The Directors consider that the respective investments of Peel and the 
institutional investor serve as further endorsement of the DMG technology and 
enhance Powerhouse's credibility to advance its development strategy in and 
outside of the UK. A further and critical element of the agreement with Peel is 
that it also permits Powerhouse access to and use of the full design and 
engineering details of the entire plant being built at Protos, above and beyond 
that relating to the DMG technology, as well as unrestricted access to the site 
during and after construction. This will be of significant value and benefit to 
Powerhouse in relation to developing its international partnering and licensing 
agreements. 
 
Commenting, David Ryan, CEO of Powerhouse, said: 
 
"We are delighted to have attracted an international institutional fund as an 
investor and that Peel, already a key commercial partner, has also chosen to 
engage in this fundraise and demonstrated commitment by taking a warrant over 
10% of the Company and become a cornerstone investor in Powerhouse. The 
investment cements the already close relationship between the two companies." 
 
Dr Cameron Davies, Chairman of Powerhouse, said: 
 
"We are particularly pleased to have attracted a high-quality institutional 
investor to our shareholder register. The fact that the fundraising was 
oversubscribed demonstrates market confidence in our execution strategy. The 
Board is confident this funding will facilitate Powerhouse to complete the 
first projects, reach profitability and roll out its international growth 
strategy." 
 
Chris Eves, Finance Director of Peel Holdings IOM, said: 
 
"We are pleased that Powerhouse has passed this key milestone and look forward 
to working with the Company going forward. The next stage is to secure the 
funding for the Protos project which will be achieved in due course. The 
commercialisation of the Protos project and the development of the UK pipeline, 
which could be over 70 facilities, will form the springboard for the 
international expansion of the Powerhouse business model." 
 
Admission to Trading on AIM 
 
Application has been made for the admission of 200,000,000 Ordinary Shares to 
trading on AIM ("Admission") and it is expected that this will occur on or 
around 15th September 2020. These shares will rank pari passu in all respects 
with the Company's existing issued Ordinary Shares. 
 
Subsequent to the issue of new Ordinary Shares, the Company will have 
3,715,100,693 Ordinary Shares in issue. Powerhouse has no shares in Treasury, 
therefore this figure may be used by shareholders, from Admission, as the 
denominator for the calculations by which they will determine if they are 
required to notify their interest in, or a change in their interest in, the 
share capital of the Company under the FCA's Disclosure and Transparency Rules. 
 
Broker Warrants 
 
Turner Pope has been issued with 5,395,260 warrants to subscribe for new 
Ordinary Shares at the Issue Price, exercisable for a period of three years 
from Admission. 
 
ENDS 
 
For more information, contact: 
 
Powerhouse Energy Group plc        Tel: +44 (0) 203 368 
                                   6399 
 
David Ryan, Chief Executive 
Officer 
 
WH Ireland Limited (Nominated      Tel: +44 (0) 207 220 
Adviser)                           1666 
 
James Joyce / Lydia Zychowska 
 
Turner Pope Investments Ltd (Joint Tel: +44 (0) 203 657 
Broker)                            0050 
 
Andrew Thacker / Zoe Alexander 
 
Ikon Associates (Media enquiries)  Tel: +44 (0) 1483 271291 
 
Adrian Shaw                        Mob: +44 (0) 7979 900733 
 
Notes for Editors: 
 
About Powerhouse Energy Group plc 
 
Powerhouse has developed a proprietary process technology - DMG® - which can 
utilise waste plastic, end-of-life-tyres, and other waste streams to 
efficiently and economically convert them into syngas from which valuable 
products such as chemical precursors, hydrogen, electricity and other 
industrial products may be derived.  Powerhouse's technology is one of the 
world's first proven, distributed, modular, hydrogen from waste (HfW) process. 
 
The Powerhouse DMG® process can generate up to 2 tonnes of road-fuel quality 
H2, and more than 58MWh of exportable electricity per day. 
 
Powerhouse's process produces low levels of safe residues and requires a small 
operating footprint, making it suitable for deployment at enterprise and 
community level. As announced on 11th February 2020 under its Supplemental 
Agreement with Peel Environmental, PHE will receive an annual license fee of GBP 
500,000 in respect of each project which is commissioned. 
 
Powerhouse is quoted on the London Stock Exchange's AIM Market under the 
ticker: PHE, and is incorporated in the United Kingdom. 
 
For more information see www.powerhouseenergy.net 
 
About the Protos Project 
 
The first application of the Powerhouse DMG technology is to be built at the 
Protos Site, a Peel L&P energy park development on a 54-hectare site known as 
'Protos' near Ellesmere Port, Cheshire, England. The site is the first 
development by Peel L&P under the Collaboration Agreement. 
 
The planning permission for the application was submitted in September 2019 
and, on 3 March 2020, the Cheshire West and Chester planning committee approved 
the planning application for the DMG Technology to be utilised on the Protos 
Site. 
 
 
 
END 
 

(END) Dow Jones Newswires

September 09, 2020 02:16 ET (06:16 GMT)

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