Issue of Equity

RNS Number : 6285B

Quadrise Fuels International PLC

06 March 2014

 



THIS ANNOUNCEMENT IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, RUSSIA, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO

6 March 2014

Quadrise Fuels International PLC

("QFI", "Quadrise" or the "Company")

Placing to raise £10.7 million

Quadrise, the emerging supplier of MSAR®, a low cost alternative to heavy fuel oil in the shipping, refining, and power generation markets, is pleased to announce that it has raised £10.7 million before expenses by way of a placing of new ordinary shares with institutional and other investors (the "Placing").

Summary of Placing

·      The Company has placed 33,437,500 new ordinary shares of 1 pence each in the Company (the "Placing Shares") at a price of 32 pence per share to raise gross proceeds of £10.7 million by means of a placing.

·      Peel Hunt LLP acted as sole broker and bookrunner for the Company.

·      The proceeds of the Placing will enable the Company to advance each of its current active programmes as well as pursuing new projects and strengthening the Quadrise balance sheet. The additional project capital will allow the Company to expedite deployment of MSAR® manufacturing units ("MMU") on commercialisation, fund the Quadrise research and development facility, protect existing and future IP and enable the Company to recruit additional specialist staff.

·      Application has been made for the Placing Shares to be admitted to trading on AIM and dealings are expected to commence at 8.00 a.m. on or around 12 March 2014.

Commenting Ian Williams, Chairman of Quadrise, said:

"We are delighted by the positive response to the Placing and to welcome a number of new institutional and other investors onto the Quadrise shareholder register. The Placing allows Quadrise to maintain momentum with its existing projects, in particular, its leading Marine MSAR® and Power MSAR® programmes, and to make progress across a number of other fronts.

"With the Company's Marine MSAR® project now moving towards commerciality this year, we have made further significant progress on a number of other projects, including power generation with Saudi Aramco. Developing these additional markets not only provides significant further opportunities for the Company, but also helps de-risk the overall development of MSAR®. In order to maintain momentum in these projects, the board felt it prudent to raise funds to ensure that cash calls at key points in the various project developments could be covered.

"As the business has developed, so has its appeal to a wider range of investors.  This Placing has introduced a broader base of institutional shareholders who are supportive of the Company's future. We believe that the Placing validates the global commercial opportunity for Quadrise, endorses the management team and affirms the Company's strategy."

Background and reason for the Placing

MSAR® has the potential to add significant value to a number of industries, including shipping, power generation and refining. The market opportunity is sizeable, with current fuel oil demand estimated at 500 million tonnes per annum, with an approximate value of US$300bn p.a. at current market prices.

Partnering with world class industry players , Quadrise currently has a number of active projects moving towards commercialisation. The most advanced project is in marine, where the Company is expected to move into the early commercial phase later this year, as announced on 24 February 2014.

The global market for marine fuel is estimated at 200 million tonnes per annum.  Marine MSAR® offers a number of advantages to end users, including cost and environmental benefits, contributing to affordable compliance with the increasingly stringent environmental regulations currently being implemented across the shipping industry.

Similarly, MSAR® offers refiners a unique opportunity to significantly improve margins with minimal capital expenditure, providing a strong incentive to produce MSAR® for the end user market.

As outlined in the operational update of 24 February 2014, the combination of a broader portfolio of high quality projects and the need for additional staff to support these active programmes, has increased the call on available funds beyond that anticipated when Quadrise last raised equity in October 2012.

Marine MSAR®

The two seaborne programmes on which the A.P. Möller-Mærsk ("Mærsk") 'Proof of Concept' ("POC") confirmation is based are progressing independently. As previously announced, these will be followed by rapid preparations for commercial operations including the negotiation and finalisation of contractual terms between Quadrise International Limited ("QIL"), AkzoNobel, the refiner and Mærsk. The first production volumes during the second half of 2014 will be applied to the Letter Of No Objection ("LONO") confirmation phase. This phase enables the engine manufacturers to complete the required hours of seaborne service and collect the performance data necessary to issue a LONO. Since each engine manufacturer issues a separate proprietary LONO, delays to one programme are not expected to hold back the transition to commercial operations and the installation of Marine MSAR® manufacturing capacity. The Placing proceeds will enable the Company to acquire additional MMUs and deploy these rapidly to begin Marine MSAR® production upon issuance of LONO.

Saudi Arabia

As previously announced, Quadrise MSAR® technology has been approved for application in Saudi Aramco refineries and a number of related project opportunities have been identified. The potential value of the transition from current practice to MSAR® fuelling for thermal power generation in Saudi Arabia is considerable.

Saudi Aramco has designated a large refinery complex with linked steam and power generation facilities for the first MMU installation. This could potentially be expanded progressively to produce up to 5 million tonnes of MSAR® per annum to fuel on-site utilities generation and identified power plants in the Kingdom of Saudi Arabia.

The agreed intention by all parties is to have the fuel system designed, installed and operational to supply a power generation facility for the demonstration phase during Q4 2014. The basis on which QIL will provide support services for the pre-production phase in 2014 remains under discussion.

In South and Central America, work is ongoing to complete the MSAR® manufacturing feasibility study during Q1 2014 for the Ecopetrol refinery in Colombia. Samples of refined residue have been received for analysis, testing and evaluation during Q2 2014. It is anticipated that discussions on the potential commercial implementation plan will also be launched during this period.

Total Voting Rights

Following the admission to trading on AIM of the Placing Shares on or around 12 March 2014, the Company's capital will consist of 805,980,891 Ordinary Shares.

The total number of voting rights in the Company will be 805,980,891.  The voting rights on all these shares are identical.   This figure may be used by shareholders 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 and Transparency Rules following 12 March 2014.

-ENDS-

For further information, please refer to the Company's website at www.quadrisefuels.com or contact:

Quadrise Fuels International Plc
Ian Williams, Executive Chairman	[phone]
Hemant Thanawala, Finance Director
Sole Broker and Bookrunner
Peel Hunt LLP
Richard Crichton	[phone]
Ross Allister
Alastair Rae
Nominated Adviser
Smith & Williamson Corporate Finance Limited
Dr Azhic Basirov	[phone]
Siobhan Sergeant
Ben Jeynes
Public & Investor Relations
Pelham Bell Pottinger
Philip Dennis	[phone]
Rollo Crichton-Stuart

Important Information

Neither the content of the Company's website (or any other website) nor any website accessible by hyperlinks on the Company's website (or any other website) is incorporated in, or forms part of, this announcement.

Any person receiving this announcement is advised to exercise caution in relation to the Placing. If in any doubt about any of the contents of this announcement, independent professional advice should be obtained.

Peel Hunt, which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively for the Company and no-one else in connection with the Placing and will not regard any other person (whether or not a recipient of this announcement) as a client in relation to the Placing and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Placing or any other matter referred to herein.  Its responsibilities as the Company's sole broker under the AIM Rules for Companies are owed to the London Stock Exchange and the Company and not to any other person in respect of his decision to acquire Placing Shares in reliance on any part of this announcement. No representation or warranty, express or implied, is made by Peel Hunt as to any of the contents of this announcement.

Smith & Williamson Corporate Finance Limited ("Smith & Williamson"), which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively for the Company and no-one else in connection with the Placing and will not regard any other person (whether or not a recipient of this announcement) as a client in relation to the Placing and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Placing or any other matter referred to herein.  Its responsibilities as the Company's nominated adviser under the AIM Rules for Companies and the AIM Rules for Nominated Advisers are owed to the London Stock Exchange and the Company and not to any other person in respect of his decision to acquire Placing Shares in reliance on any part of this announcement. No representation or warranty, express or implied, is made by Smith & Williamson as to any of the contents of this announcement.

Apart from the responsibilities and liabilities, if any, which may be imposed on Peel Hunt or Smith & Williamson by the Financial Services and Markets Act 2000, neither Peel Hunt nor Smith & Williamson accepts any responsibility whatsoever for the contents of this Announcement, and makes no representation or warranty, express or implied, for the contents of this Announcement, including its accuracy, completeness or verification, or for any other statement made or purported to be made by it, or on its behalf, in connection with the Company or the New Ordinary Shares or the Placing, and nothing in this Announcement is or shall be relied upon as, a promise or representation in this respect whether as to the past or future. Each of Peel Hunt and Smith & Williamson accordingly disclaims to the fullest extent permitted by law all and any liability whether arising in tort, contract or otherwise (save as referred to above) which it might otherwise have in respect of this Announcement or any such statement.

This announcement is not an offer to sell or a solicitation of any offer to buy the securities of Quadrise (the "Company", and such securities, the "Securities") in the United States, Australia, Canada, Japan, New Zealand, Russia, the Republic of South Africa or in any other jurisdiction where such offer or sale would be unlawful.

This announcement may not be published, distributed or transmitted by any means or media, directly or indirectly, in whole or in part, in or into the United States.  This announcement does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States.  Securities may not be offered or sold in the United States absent (i) registration under the U.S. Securities Act of 1933, as amended (the "Securities Act") or (ii) an available exemption from registration under the Securities Act. The Securities have not been and will not be registered under the US Securities Act of 1933 (the "Securities Act"), or with any securities regulatory authority of any state or other jurisdiction of the United States, and may not be offered, sold, resold, pledged, taken up, exercised, renounced, delivered, distributed or transferred, directly or indirectly, into or within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. No public offering of the Securities is being made in the United States.

This announcement is an advertisement and not a prospectus.  No prospectus is required to be published in connection with the Placing in accordance with the Prospectus Directive, and accordingly (unless the Company so chooses) no prospectus will be published in accordance with the Placing.  This announcement cannot be relied on for any investment contract or decision.  No person has been authorised to give any information or make any representation and, if given or made, such information or representation must not be relied upon as having been so authorised by the Company, the Directors, Peel Hunt or Smith & Williamson.

Note regarding forward-looking statements:

This announcement contains certain forward looking statements relating to the Company's future prospects, developments and business strategies. Forward looking statements are identified by their use of terms and phrases such as "targets" "estimates", "envisages", "believes", "expects", "aims", "intends", "plans", "will", "may", "anticipates", "would", "could" or similar expressions or the negative of those, variations or comparable expressions, including references to assumptions.

The forward looking statements in this announcement are based on current expectations and are subject to risks and uncertainties which could cause actual results to differ materially from those expressed or implied by those statements. These forward looking statements relate only to the position as at the date of this announcement. Neither the Directors nor the Company undertake any obligation to update forward looking statements or risk factors, other than as required by the AIM Rules for Companies or by the rules of any other applicable securities regulatory authority, whether as a result of the information, future events or otherwise. You are advised to read this announcement and the information incorporated by reference therein, in their entirety for a further discussion of the factors that could affect the Company's or the Group's future performance and the industries in which they operate.  In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements in this announcement may not occur.

 

END

 

 

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