Investment in Inspirit Limite

RNS Number : 4175R

Kleenair Systems International PLC

23 August 2010

 



KLEENAIR SYSTEMS INTERNATIONAL PLC

(AIM: KSI)

Investment in Inspirit Limited

Kleenair Systems International plc ("KSI" or "the Company") is pleased to announce an investment in Inspirit Limited ("Inspirit") which the directors believe should transform the Company's prospects and establish the Company as an investor in the Clean Tech and Renewables sector, in accordance with its investing policy, details of which were included in the circular to shareholders dated 9 July 2010 and approved by shareholders on 3 August 2010.

Inspirit owns an option to call for the grant of a perpetual licence to manufacture and distribute a micro combined heat and power appliance, the m-CHP, which it is believed will compete with as well as complement conventional boiler technology.

The appliance generates electricity for household and small business consumption and for sale to the national grid, thereby helping to reduce CO2 emissions. The appliance is currently powered by natural gas or LPG and is designed to produce hot water, central heating and electrical output simultaneously and not individually. The simultaneous outputs of the appliance are 15kW thermal energy and 3kW electrical energy from around 20kW input of either natural gas or LPG. This gives a total unit efficiency of 92%, split 77% thermal efficiency and 15% electrical efficiency. The appliance uses a Stirling engine and therefore benefits from low noise and vibration characteristics, making it suitable for installation in a SME and domestic property. The size of the appliance is 800(h)*600(w)*600(d) mm. The appliance is designed to be installed by one person, and installation is similar to that of a floor standing boiler.

The directors believe there are three main paybacks associated by having the appliance installed:

-     the value of electricity generated by the appliance (the generation tariff).

-     the value of the electricity exported to the grid (the export tariff); and

-     the value of a reduction in the electrical bill of the premises by the electricity used.

These collectively form the Feed in Tariff (FIT) introduced in April 2010. The directors also believe that small businesses could benefit from the Renewables Obligation (RO) regime There is also the value of the carbon saved by generating electricity locally as opposed to at a power station.

The directors consider that the product has significant scope for development in the areas of renewable energy power, grid independence, air conditioning and tandem or dual supply units in a wide range of capacities and sizes.  

The directors believe the m-CHP will have a significant impact in the area of micro generation though the reduction of carbon emissions and improvement in overall efficiencies in local and national generation and distribution of power and that this will be perceived as a disruptive technology for which they expect a significant market will develop as demand for cheaper and more sustainable energy increases. 

The technology has undergone an extensive and rigorous development process over the course of the last four years with Inspirit's commercial partners, Prodrive Automotive Technology Limited (Stirling engine), Enertek International Limited (combustion system) and Sentec Limited (control system and power electronics) and the Carbon Trust. The m-CHP has built on twelve years of development and investment by Sigma Electronik of Norway, who in turn based their technology development of the prototype appliance, using a176b Stirling engine, on a number of Swedish patents resulting from R&D investment into the Stirling technology by Kockums and Lund University of Sweden.

The commercialisation programme is one year into its time frame and it is anticipated to be completed with full production sign off and release in June 2011. Key areas of testing are the engine, condensing gas burner and control electronics and user interface. Initial production appliances are expected to become available during the course of 2011 to start the field trial programme.

KSI has agreed to subscribe £300,000 for the issue of 1,300,000 shares in Inspirit, representing approximately 81.5 per cent of the existing issued share capital. The investment will enable Inspirit to complete its due diligence prior to the proposed exercise of the option which will require the issue of 11m new ordinary shares in Inspirit to Somemore Limited, the owner of the intellectual property rights to the m-CHP appliance, following which the Company's investment will represent approximately 10.55 per cent of Inspirit's enlarged issued share capital.

Inspirit is beneficially owned and controlled by John Gunn who is a substantial shareholder in KSI. The directors, having consulted WH Ireland Limited, the company's nominated adviser, consider that the terms of the transaction are fair and reasonable insofar as its shareholders are concerned.

Contacts:
Kleenair Systems International plc	www.kleenair-systems.com
Sarah Pozner, Company Secretary	[phone]
Biddicks	www.biddicks.co.uk
Zoë Biddick	[phone]
WH Ireland Limited	www.wh-ireland.co.uk
JN Wakefield / Marc Davies	[phone]

 

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