Completion of Acquisition of Greenpark Energy Ltd

RNS Number : 1939C

Alkane Energy PLC

27 April 2012

 



27 April 2012

Alkane Energy plc

("Alkane" or "the Company")

Completion of Acquisition

of Greenpark Energy Limited

Introduction

The Board of Alkane Energy plc, the independent gas to power producer, is pleased to announce that by 26 April 2012, all conditions precedent of the conditional acquisition (the "Acquisition") of Greenpark Energy Limited ("Greenpark") were satisfied and the Acquisition has now completed.

Following the Acquisition, Alkane is now the largest operator of Coal Mine Methane ("CMM") in the UK and has a sizable presence in power response operations, with, in total 70MW of installed generating capacity and an electrical grid capacity of 92MW across 19 sites.

Alkane has further extended its position of having the UK's leading portfolio of CMM licences, which includes a further seven CMM gas exploration licences from Greenpark, along with sites currently under investigation which will secure the project pipeline over the short to medium term.

Acquisition Details

The Acquisition has been financed by the extension and addition of banking facilities provided by Lloyds TSB Bank PLC, totalling facilities of up to £9.5 million, the issue of a £2.0 million convertible loan note, and the issue of £250,000 in Alkane ordinary shares of 0.5 pence each in the capital of the Company ("Consideration Shares"). The cash consideration paid on completion was £4.76 million in cash with further cash payments of up to £725,000 made subject to release of an escrow retention and further contingent and deferred contractual arrangements detailed under the Acquisition agreement (the "Acquisition Agreement"). Further details of the Acquisition and Acquisition Agreement are contained in the announcement of 2 February 2012.

Consideration Shares

The number of Consideration Shares issued was 1,162,237, based on the 30 day, volume weighted average share price of 21.51 pence per Alkane ordinary share immediately prior to Completion calculated by reference to the payment value of £250,000. The Consideration Shares have now been issued and allotted and application will be made for admission of the Consideration Shares to trading on AIM. It is expected that dealings in the Consideration Shares will commence at 8.00 a.m. on 3 May 2012.

Following the admission of the Consideration Shares, the issued share capital of the Company will be 100,863,085 ordinary shares.

Neil O'Brien, Chief Executive Officer, commented on the Acquisition:

"This acquisition is a transformational deal for the Company and gives us greater critical mass, confirms Alkane's position as a leader in the independent gas to power sector, and provides a strong platform for future growth."

For more information please contact:

Alkane Energy plc Neil O'Brien, Chief Executive Officer Steve Goalby, Finance Director	01623 827927
Altium Capital Limited Adrian Reed Andy Clarke	0845 505 4343
VSA Capital Limited Andrew Raca	020 3005 5004
Hudson Sandler Nick Lyon Alex Brennan	020 7796 4133
www.alkane.co.uk

About Alkane:

Alkane Energy is one of the UK's fastest growing independent power generators. The Company operates mid-sized "gas to power" electricity plants providing both predictable and fast response capacity to the grid. Following the acquisition of Greenpark Energy Limited ("Greenpark"), Alkane now has a total of 70MW of installed generating capacity and an electrical grid capacity of 92MW.

Alkane's main operations are based on a portfolio of Coal Mine Methane ("CMM") sites. Alkane has the UK's leading portfolio of CMM licences, enabling the Company to extract gas from abandoned coal mines. Alkane started extracting CMM for direct sales of gas in 1999 with sites at Shirebrook, Steetley and Markham.

As CMM declines at any one site Alkane retains valuable generating capacity and a grid connection which we move to power response. Power response sites are connected to mains gas and produce electricity at times of high electrical demand or in order to balance the electricity grid. Alkane now operates 24MW on conventional gas post the Greenpark acquisition.

The Group operates from 19 mid-size (up to 10MW) power plants across the UK, 12 CMM, 4 conventional gas and 3 using both fuel sources, and sells this power through the electricity network, using standard modular reciprocating engines to generate the electricity. The engine units and other plant are designed to be flexible and transportable and this allows additional capacity to be brought onto growing sites and underutilised plant to be moved to new sites to maximise efficiency.

The biogas market also provides a potential new business stream. Running on gas generated from the processing of organic waste will require exactly the same power assets and core gas and electricity skills as CMM.

Coal bed methane ("CBM") is a longer term opportunity where Alkane has 500km² under licence and contingent resource estimates of circa 350 billion cubic feet. In February 2012 the Company signed a partnership agreement with Aberdeen Drilling Management Limited to explore two of our licences with CBM potential.

More information is available on our website www.alkane.co.uk

 

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