Placing and issue of equity

Powerhouse Energy Group plc

Strategic Placing to raise £10 million

Powerhouse Energy Group plc (AIM: PHE) ("Powerhouse" or the "Company"), the sustainable hydrogen company pioneering hydrogen production from waste plastic, is pleased to announce it has raised £10 million, before expenses, by way of a Placing at 5.5p per share ("Issue Price") (the “Placing” or “Fundraising”). The Placing was arranged by Turner Pope Investments Ltd (TPI) and was oversubscribed.

The Directors have undertaken the Fundraising to provide funds that they believe will expedite signifcantly financial close of the funding of the first commercial scale DMG installation utilising the Company’s technology, which is targetted to be reached during the first quarter of 2021. The Directors’ view is that completion of this first reference site will be extremely commercially and strategically important to the Company, not least as a springboard for overseas sales and marketing.

A total of 181,818,182 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 institutional investor and a small number of Turner Pope’s private clients, as well as the White Family (the Company's largest shareholder), raising £10 million, before expenses.

Related Party Transaction

The White Family is a long-term supporter of the Company and is investing approximately £2.6 million in the Fundraising. 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 26.05% percent of the share capital. Following the Fundraising, the White Family will hold 1,015,045,935 Ordinary Shares representing 26.05% held by the individual White Family members as follows:

Josh White – 377,746,610 Ordinary Shares

Ben White – 247,775,210 Ordinary Shares

Serena White-Reyes – 211,459,086 Ordinary Shares

Howard White – 178,065,029 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 use the net funds from the Fundraising to advance the project procurement and delivery of long lead items before the formal financial close of the first commercial scale DMG installation , thereby protecting the targeted timeline for the Company, and advancing the completion of the Company’s DMG technology. This will allow the Company to complete negotiations rapidly for the Special Project Vehicle (“SPV”) to be established to deliver the Protos plant. Powerhouse will apply the net funds from the Fundraising to invest alongside Peel NRE Environmental Limited. By providing investment for this SPV, the Company believes that financial close will be significantly expedited.

This investment in the Protos SPV will give the Company access to extra revenue via participation at project level on the first commercial deployment, rather than simply as licensor of the DMG technology, and will allow Powerhouse to significantly advance its overall business plan. Importantly, commissioning the first commercial unit will provide a reference site for potential overseas customers and partners. It will also provide the Company with greater beneficial technical exposure in the project delivery phase.

The Directors consider that these steps are beneficial for the Company's future and are likely to bring forward the date on which licence fee income, which is expected to constitute the principal portion of the Company's future revenue, will start to be received.

Commenting, Tim Yeo, Executive Chairman of Powerhouse, said:

"This is a very exciting step forward and a great start to 2021. It demonstrates how our Company is getting down to business. In addition the Warrant granted to Peel Holdings (IoM) Limited on 9 September 2020 ("Peel Warrant") is exercisable for a period of six months from the date when financial close is reached on Protos.

“The exercise of the Peel Warrant would bring a further £10.2 million of cash into Powerhouse. Together with the proceeds of this Fundraising, the exercise of the Peel Warrant would place our Company on a very secure financial footing and facilitate the deployment of our technology internationally, helping to accelerate a clean energy transition and provide a solution to non-recylable plastic."

David Ryan, CEO of Powerhouse, said:

“My overriding priority is to bring Powerhouse’s first project to operation soonest. The completed plant would enable future customers worldwide to see the DMG technology delivering the reality of waste plastic regenerated to hydrogen, realising the predicted technology environmental and commercial benefits. This investment will allow Powerhouse and Peel to deliver this reality sooner and I consider it as an obvious step for the Company to make in these challenging times.”

Admission to trading on AIM

Further to the Fundraising, the Company is issuing 181,818,182 Ordinary Shares. Application will be made for the admission of 181,818,182 Ordinary Shares to trading on AIM (“Admission”) and it is expected that this will occur on or around 21 January 2021. These shares will rank pari passu in all respects with the Company's existing issued Ordinary Shares. 

Subsequent to the issue of Ordinary Shares, the Company will have 3,896,918,875 Ordinary Shares in issue with voting rights. 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 

TPI has been issued with 9,090,910 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: [phone]
Tim Yeo, Executive Chairman
WH Ireland Limited (Nominated Adviser)	Tel: [phone]
James Joyce/ Lydia Zychowska
Turner Pope Investments Ltd (Joint Broker)	Tel: [phone]
Andrew Thacker
SisterSmith PR (media enquiries) Becca Smith	Mob: [phone]

Notes for editors:

About Powerhouse Energy Group plc

Powerhouse, the sustainable hydrogen company, has developed a proprietary process technology – Distributed Modular Generation (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 hydrogen 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, Powerhouse will receive an annual license fee of GBP500,000 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