Kuwait Agency Agreement and MoU

RNS Number : 2911Y

Quadrise Fuels International PLC

08 May 2019

 

8 May 2019

Quadrise Fuels International plc

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

Agency Agreement with Hawazin Regional Trading Company and

Memorandum of Understanding with Hawazin and Aleph Commodities Limited for Kuwait

Quadrise is pleased to announce that the Company has entered into an Agency Agreement (the "Agreement") with Hawazin Regional Trading Company ("Hawazin") and a corresponding Memorandum of Understanding ("MoU") with Hawazin and Aleph Commodities Ltd ("Aleph").

Hawazin is an investor and provider of expert services to the oil and gas industry in Kuwait, owned by Ahmad Al-Otaibi and Faisal Al-Kharafi, and is a major shareholder of Petroleum Dynamics Oil & Gas (PetroDyn).

Ahmad Al-Otaibi, has significant experience in the oil and gas sector in the Middle East and is President and CEO of Petrodyn.  Faisal Al-Kharafi is on the Executive Committee of M. A. Al-Kharafi & Sons (a multinational trading company with annual sales of over $5 billion) and Chairman of Al-Kharafi Construction KSCC.

The Agreement defines the structure through which Quadrise and Hawazin will work to combine their expertise on an exclusive basis to fast-track MSAR® projects to long-term commercial agreements for the production and supply of MSAR® technology, services and fuel in Kuwait, a country covered by both the Co-Marketing and Project Development Agreement ("CMPDA") with Freepoint Commodities LLC ("Freepoint") announced by Quadrise on 30 November 2018 and the Kuwait Services Agreement with Aleph announced on 26 February 2019.

Fees to Hawazin under the Agreement are success-based commissions, related to a sliding percentage of gross sales received by Quadrise in Kuwait from the provision of MSAR® technology and services.  Hawazin has first right of refusal for any in-country subcontracting or support services required by Quadrise on the basis that their proposal is competitive to the alternatives.

The term of the Agreement is 18 months from signature and will automatically renew for similar periods unless terminated by either party or superseded by another agreement.

The MoU with Hawazin and Aleph sets out the principal terms and conditions on which Quadrise, Aleph and Hawazin are willing to negotiate binding agreements in order to facilitate MSAR® technology and fuel projects in Kuwait, and the underlying principles on which definitive transaction documentation will be based, subject to contract.

The MoU is evergreen, unless terminated by mutual agreement.

The signature of the Agreement and the MoU is the first of the defined activities in the agreement with Aleph Commodities that was announced on 26 February 2019 and precede the delivery of a commercial MSAR® project in Kuwait.

As a result, Aleph will now be awarded 5 million warrants to subscribe for new ordinary shares in the Company, exercisable at any time until 25 February 2021 at a price per ordinary share equal to the average mid-market closing price per QFI ordinary share over the five days ending on and including the day after the date of this announcement.

Commenting on this development:

Mike Kirk, Executive Chairman of QFI, said:

"We are delighted that following the signature of the agreement with Aleph on 26 February 2019, we have already been able to meet the first of the milestones by signing the Agency Agreement with Hawazin, and the MoU with Hawazin and Aleph.  These will enable Quadrise to accelerate activities in Kuwait and progress towards the second milestone of announcing a commercial scale trial project in Kuwait during 2019.

Ahmad Al-Otaibi and Faisal Al-Kharafi, are exactly the partners required to accelerate our progress in this important market and we are looking forward to working with them to achieve this."

Ahmed Al Otaibi and Faisal Al-Kharafi of Hawazin, said:

"Hawazin are pleased and honoured to be partnering with QFI for the introduction of MSAR® technology and business expansions in Kuwait. Hawazin and Quadrise have identified a number of opportunities in deploying MSAR® technology within Kuwait, where MSAR® has obvious economic and environmental advantages over existing fuel sources.

Looking at the upcoming growth in Kuwait oil, gas and petrochemicals markets, and the high regional demand for fuels, we believe that our cooperation will add significant value and a footprint in Kuwait that will enhance QFI's business in the region imminently.

We look forward to working closely with Quadrise and Aleph to commercialise MSAR® in Kuwait, and we are confident that MSAR® can be a highly attractive fuel option for power, marine and upstream applications."

For further information, please refer to the Company's website at www.quadrisefuels.com, or contact [e-mail] or phone:

Quadrise Fuels International Plc
Mike Kirk, Executive Chairman	[phone]
Jason Miles, Chief Operating Officer
Nominated Adviser
Cenkos Securities plc
Dr Azhic Basirov	[phone]
Ben Jeynes Katy Birkin
Joint Brokers
Peel Hunt LLP
Richard Crichton	[phone]
Ross Allister
Shore Capital
Andy Crossley Daniel Harris	[phone]
Public & Investor Relations
FTI Consulting
Ben Brewerton	[phone]
Ntobeko Chidavaenzi

Notes to Editors

QFI is the supplier of MSAR® emulsion technology and fuels, a low-cost alternative to heavy fuel oil (one of the world's largest fuel markets, comprising over 450 million tons per annum) in the global power generation, shipping, steam and refining industries.

This announcement is inside information for the purposes of Article 7 of EU Regulation 596/2014.

 

END

 

 

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