Manufacturing Partnership and New Share Purchase

RNS Number : 9648B

Velocys PLC

11 March 2014

 



11^th March 2014

Velocys plc

("Velocys" or "the Company")

(Formerly known as Oxford Catalysts Group PLC)

 

Manufacturing Partnership and New Share Purchase

Velocys plc (VLS.L), the technology innovator for smaller scale gas-to-liquids (GTL), is pleased to announce achievement of a new milestone in its relationship with Shiloh Industries, Inc. (Shiloh), through the mutual commitment of both companies to closer preferential collaboration, and the purchase by Shiloh of 601,326 new ordinary shares in Velocys at a price of 200p per share.

Velocys and Shiloh have been working together since 2012 to develop and implement economic, high quality mass-manufacturing capabilities for the Company's Fischer-Tropsch (FT) reactors, based on state-of-the-art manufacturing technology and quality systems from the automotive industry. Together with Shiloh, Velocys' supply chain can support annual FT reactor orders sufficient for 10,000 bpd of production, and plans are in place enabling expansion to 40,000 bpd in time for order growth.

Shiloh is one of North America's leadings suppliers of engineered metal products and light weighting solutions to the automotive industry.

Velocys and Shiloh have agreed to preferentially work together to continually improve the Company's FT reactor manufacturing, and, over time, to enhancing the effectiveness of the whole GTL plant, as well as exploring other opportunities in the oil and gas market. Shiloh is investing several million in manufacturing resources for Velocys, and is making available to the partnership a dedicated team of engineers.

Alongside the partnership commitment, Shiloh has subscribed for 601,326 new ordinary shares in Velocys of 1 pence each, at a price of 200p per share ("Subscription Shares") representing a 32% premium to the closing mid-market share price on 10^th  March 2014.

Roy Lipski, CEO of Velocys, said:

"We're delighted to announce our partnership with Shiloh, its commitment to Velocys and confidence in our business. Together we're innovating oil and gas through application of some of the best technology that modern mass-manufacturing has to offer.

"Smaller scale GTL is about to enter a period of rapid growth. Velocys is well positioned to take advantage of this significant opportunity and, with Shiloh at its side, has the means to fully supply expected sales and continue to maintain its position at the forefront of the market."

Ramzi Hermiz, President and CEO of Shiloh, said:

"Combining our leading position in cutting-edge manufacturing with Velocys' novel technology platform, offers exciting prospects in the fast emerging market for smaller scale GTL, and in the oil and gas industry in general. We look forward to continuing to innovate together and to building on our already strong relationship with Velocys."

The Subscription Shares will rank pari-passu with all existing ordinary shares. Application has been made for the Subscription Shares to be admitted to trading on AIM; it is expected that such admission will be effective as at 8 am on 14^th March 2014. The Company's total issued share capital after admission of the Subscription Shares will be 117,018,898 ordinary shares. The Company does not currently hold any shares in treasury. This figure of 117,018,898 ordinary shares may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FSA's Disclosure and Transparency Rules. 

- Ends -

For further information, please contact:

Velocys Roy Lipski, CEO Susan Robertson, CFO	[phone] [phone]
Numis Securities (Nomad and Broker) Alex Ham - Corporate Broking Stuart Skinner / Jamie Lillywhite - Nominated Adviser	[phone]
Lionsgate Communications Jonathan Charles	[phone]

Notes to editors

Velocys (formerly Oxford Catalysts) enables modular gas-to-liquids (GTL) plants to convert unconventional, remote and problem gas into valuable liquid fuels. Systems based on the Company's technology are significantly smaller than those using conventional technology, enabling modular plants that can be deployed cost effectively in remote locations and on smaller fields than is possible with competing systems. Together with world-class partners, Velocys provides complete modular GTL solutions that address an untapped market of up to 25 million barrels of fuel a day.

Velocys plc is listed on the AIM market of the London Stock Exchange (LSE: VLS). The Company has approx. 100 employees with facilities in Houston, Texas, USA and near Oxford, UK and Columbus, Ohio, USA.

www.velocys.com

About Shiloh   

Headquartered in Valley City, Ohio, Shiloh Industries, Inc. is a leading supplier, providing light weighting and noise, vibration and harshness (NVH) solutions to automotive, commercial vehicle and other industrial markets. Shiloh delivers these solutions through design, engineering and manufacturing of first operation blanks, engineered welded blanks, complex stampings, modular assemblies and highly engineered aluminum die casting and machined components serving the body-in-white, emission, powertrain, structural and seating needs of OEM and Tier 1 customers. The company has multiple locations across North America, including Georgia, Indiana, Kentucky, Michigan, Ohio, Tennessee, Wisconsin and Mexico, and has approximately 2,000 employees.

http://shiloh.com

 

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