Collaboration Agreement and Strategic Investment

RNS Number : 6290M

Symphony Environmental Tech. PLC

01 May 2018

 

The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is considered to be in the public domain.

	1 May 2018

SYMPHONY ENVIRONMENTAL TECHNOLOGIES PLC

("Symphony" the "Company" or the "Group")

Collaboration Agreement and Strategic Investment in Eranova SAS

Symphony Environmental Technologies Plc (AIM: SYM), a global specialist in products and technologies that "make plastic smarter", is pleased to announce that it has signed a collaboration agreement and commitment to a strategic investment ("Agreement") with Eranova SAS ("Eranova"), a company registered in France.

Eranova has developed a unique technology and process (the "Technology") which extracts starch from algae for use with other materials. The starch can be combined with other polymers to produce compounded resins which are compostable and biodegradable. These can be used to manufacture a wide range of finished products ("bioplastics"). In addition, the Technology can be developed to produce biofuel, biopolymers, proteins for food and animal feed stock, as well as by-products for the pharmaceutical and cosmetic industries. Eranova is the applicant for PCT patent WO 2017/0463656 A1 and the application has been registered in several territories.

The importance of the Technology is that it will be possible to manufacture polymers from natural raw materials without the need to use arable land and fresh-water resources normally used for growing food crops. There is also a synergy with Symphony's existing technologies to enhance the technical performance of polymers that will use the Technology.

The main terms of the Agreement are:

·      The Group will initially subscribe €500,122 for an 8% shareholding in Eranova when fully funded to start its pre-industrial development (the "Subscription")

·      The Group will have an option to subscribe at market value for further shares to increase its shareholding to 51% of Eranova's enlarged issued share capital, exercisable in one or more tranches at any time within three years after the initial investment

·      Symphony will have representation on the Board of Eranova

The Subscription is subject to completion of due diligence to the satisfaction of Symphony's Board including confirmation that all other funding for Eranova is in place and ready to draw down to start its pre-industrial development. The Subscription is financeable within Symphony's current resources.

In addition, Symphony will have the right to purchase 75% of Eranova compound made in the Middle East and North Africa, for sale as compound or in manufactured finished products within the Middle East region exclusively, and on a non-exclusive basis globally, excepting thirteen (mainly European) countries for which Eranova will have exclusivity.

Eranova requires a total of €4,790,000 to start its pre-industrial development and Symphony's investment represents one of the final tranches required. The project has won the backing of ADEME, (the French Environmental & Energy Management Agency), who after due diligence by KPMG, are supporting the project with €1,031,000 of funding. Eranova is also receiving funding from PACA (the French region of Provence Alpes Cote 'd'Azur) together with private investment and soft loans.

Pre-industrial development is expected to start in the second half of 2018 and will consist of constructing long seawater tanks, called "raceways", where Eranova will optimise cultivation of algae for the production of the starch extract. The raceways constructed during this phase will represent 1/50 scale of a full commercial facility and will cover 1.2 hectares. This phase will also involve conversion of the resultant starch into bioplastic compounds. Eranova has signed an agreement to begin installation of the pre industrial development with the Grand Port de Marseille, and TOTAL TDR, a division of the TOTAL petrochemical company, will be supporting certain employment costs due to the innovative nature of the Technology.

The current majority owners, and directors, of Eranova are Philippe Michon, who is, and has been Symphony's French distributor for over thirteen years, and Phillipe Lavoisier, a chemical engineer who has invented the Technology.  He was an R&D manager at 3M and has worked for many years in the plastic film industry.

The key benefits of the Technology are:

·      Using a natural renewable waste product which pollutes beaches

·      A non-food-based resource (compared to corn or potatoes)

·      Higher yields per hectare due to the fast growing-rate of algae compared to food-crops

·      Early stage processing shows good mechanical properties and competitive cost

·      Potential new markets for by-products of the Technology

Symphony's Chief Executive, Michael Laurier, said:

"This investment and collaboration agreement adds another key environmental technology to Symphony's range of smarter plastics, and gives the Group an exciting position in the bioplastics market which, according to a recent report by Zion Market Research, is growing at a rate of 12.5% per annum and will reach a value of $35.5 billion by 2022.  We are also very excited by the synergies between this technology our other technologies.

We believe that the Eranova technology and our d2w technology will both be valuable parts of a suite of technologies and strategies to be adopted by governments across the world for eliminating the various forms of plastic from the oceans and the open environment." 

Eranova's Chief Executive, Philippe Lavoisier, said

"We are pleased to have Symphony as an investor in Eranova. Green algae are a major issue for the environment, and our technology will be used to collect and use this pollutant as a source to manufacture an odourless, colourless, compostable and biodegradable range of bioplastics without creating competition with food production.

 
Symphony brings to Eranova a very valuable network of global distributors together with their management and commercial resources.

We look forward to providing the market with a new generation of bio-based polymers that are affordable and pay due respect to the environment."

Enquiries

Symphony Environmental Technologies Plc
Michael Laurier, CEO	Tel: [phone]
Ian Bristow, CFO
www.symphonyenvironmental.com
Cantor Fitzgerald Europe
David Foreman/Richard Salmond (Corporate Finance)	Tel: [phone]
Alex Pollen (Sales)
Blytheweigh
Tim Blythe	Tel: [phone]
Nick Elwes

NOTES TO EDITORS:

About Symphony Environmental Technologies plc

Symphony has developed and continues to develop, controlled-life plastic technology which helps tackle the problem of microplastics by turning ordinary plastic at the end of its service-life into biodegradable materials. It is then no longer a plastic and can be bioassimilated in the open environment in the same way as a leaf. The technology is branded d₂w® and appears as a droplet logo on many thousands of tonnes of plastic packaging and other plastic products around the world. In some countries, most recently Saudi Arabia, oxo-biodegradable plastic is mandatory. 

To view a short BBC World Service film introducing d2w oxo-biodegradable (controlled-life) plastic technology please click on one of the following links: 

From within the UK- http://www.symphonyenvironmental.com/d2w/d2w-brochure-5/

From outside of the UK - http://www.bbc.com/storyworks/the-british-bid/symphony 

In addition, Symphony has developed a range of additives, concentrates and master-batches marketed under its d2p® brand, which can be incorporated in a wide variety of plastic and non-plastic products so as to give them protection against many different types of bacteria, fungi, algae, moulds, and insects, and against fire. d2p products also include odour, moisture and ethylene adsorbers as well as other types of food-preserving technologies. We have also launched d2p anti-microbial household gloves and are developing a range of other d2p finished products for retail sale.

Symphony has also developed the d₂Detector®, a portable device which analyses plastics and detects counterfeit products.  This is useful to government officials tasked with enforcing legislation, and Symphony's d₂t tagging and tracer technology is available for further security.

Symphony has a diverse and growing customer-base and has established itself as an international business with 74 distributors around the world. Products made with Symphony's plastic technologies are now available in nearly 100 countries and in many different product applications. Symphony itself is accredited to ISO9001 and ISO14001.

Symphony is a member of The Oxo-biodegradable Plastics Association (www.biodeg.org) (OPA), the Society for the Chemical Industry (UK), and the Pacific Basin Environmental Council. Symphony is also a strategic partner of the Commonwealth business initiative, and actively participates in the Committee work of the British Standards Institute (BSI), the American Standards Organisation (ASTM), the European Standards Organisation (CEN), and the International Standards Organisation (ISO).

Further information on the Symphony Group can be found at www.symphonyenvironmental.com and twitter @SymphonyEnv  See also Symphony on Instagram   A Symphony App is available for downloading to smartphones.

 

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