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RNS Number:1498W
Tersus Energy Plc
23 December 2005
Not for release, publication
or distribution in the United States
Tersus Energy plc
("Tersus Energy" or the "Company")
Issue of Equity
Tersus Energy today announces
it has conditionally raised £4 million (before
expenses) in a placing with institutional and other
investors. Having established its three operating businesses
since its AIM IPO in February 2005: Tersus Energy Controls,
Tersus BioEnergy and Tersus Asian Renewables, Tersus
Energy intends that the funds raised will be used to
make up to seven investments across these business units.
Whilst in certain cases term sheets have been signed,
execution of all of the transactions is conditional
upon board approval, finalisation of due diligence and
negotiation of full form legal documentation. Further
information on the status of the negotiations relating
to these proposed investments are set out under "Intended
Investments" below.
The Company has conditionally
placed 11,111,112 new ordinary shares of 0.5p each ("Ordinary
Shares") (the "Placing Shares") at 36
pence each to raise approximately £4 million (before
expenses) for the Company (the "Placing").
KBC Peel Hunt Ltd is acting as Nominated adviser and
broker.
The following is a summary
of the proposed investee entities, which should be read
in conjunction with the remainder of this announcement:
Tersus Energy Controls:
- Company "A", a
US-based developer of controllers for shunt and series
DC motors. In the view of the Board of Tersus Energy,
Company "A" offers potential product distribution
and cost synergies with Navitas Technologies,
the first acquisition within Tersus Energy Controls.
- Thor, a US-based developer
of brushless DC ("BLDC") motor and controller
technology. The Board considers that Thor offers potential
R&D collaboration with Navitas Technologies.
- World Energy Labs, a US based
developer of battery (electrochemical) diagnostics
technology targeting 'mission-critical' users of batteries
e.g. utilities, telecommunications, UPS users and
hospitals.
- Company "E", a
US-based developer of energy and environmental information
management software. Company "E" represents
Tersus Energy's first proposed investment into stationary
(as opposed to mobile) energy
controls.
Tersus BioEnergy:
- Enviro-Controls, a UK-based
developer of proprietary thermophilic anaerobic digestion
technologies and projects. The potential investment
includes a joint project development agreement giving
Tersus Energy developer project equity and the right
to invest equity in projects and earn developer's
equity.
- West Lorne Cogeneration,
DynaMotive Energy Systems' first commercial plant
in West Lorne, Ontario, using DynaMotive's technology
to convert wood waste to BioOil and Char and for the
generation of clean electricity and steam.
Tersus Asian Renewables:
- Options over Tang Wind Energy's
limited partnership interests affording an exposure
to HT Blade, one of China's largest domestic developers
and manufacturers of wind blades.
Commenting on the transaction,
Steven Levine, Chief Executive Officer said:
"This fundraising represents
the next step in building upon the foundations laid
by our IPO in February, and the establishment of our
three operating businesses: Tersus Energy Controls,
Tersus BioEnergy and, Tersus Asian Renewables. The acquisitions
and investments we have selected should, if completed,
enable us to grow our three business units."
Enquiries:
Tersus Energy plc
Steven Levine, Chief Executive Officer
David Wilson, Finance Director
Tel: 020 7408 5420
KBC Peel Hunt Ltd
Jonathan Marren
David Anderson
Tel: 020 7418 8900
M Communications
Patrick d'Ancona
Nick Fox
Tel: 020 7153 1540
Notes to Editors
About Tersus Energy
plc
Tersus Energy, which floated
on AIM in February 2005, is building three operating
businesses:
- Tersus Energy Controls.
Formed to exploit the opportunity presented by the
increasing focus on energy efficiency and management
of electricity consumption. Tersus Energy is focusing
on mobile applications (eg. electric vehicles, AGVs,
fork lifts, fuel cells, hybrids) and stationary applications
(eg. building controls, energy management information).
Its first investment is Navitas Technologies. The
aim of Tersus Energy Controls
is to build an earnings based business of some scale.
- Tersus BioEnergy.
Formed to exploit the accelerating demand for alternative
fuel based supply of energy. Tersus BioEnergy is focusing
on biofuels (bioethanol and biodiesel) and electricity
produced from forest, agricultural, municipal and
industrial waste. It intends to develop, manage and
invest into a stream of projects with our chosen Joint
Venture partners, growing in scale over time. Its
first strategic relationship is with Dynamotive Energy
Systems Corporation. DynaMotive's technology economically
converts biomass into a renewable, environmentally
friendly fuel. DynaMotive has successfully demonstrated
conversion of these residues into fuel known as BioOil,
as well as char.
- Tersus Asian Renewables.
Formed to exploit the demand for renewable energy
in Asia. Tersus Asian Renewables is focusing on wind,
biomass and clean coal, principally in China and India.
It intends to develop, manage and invest into the
project streams of our chosen Joint Venture partners,
growing in scale over time. Tersus Energy's first
strategic relationships are with Tang Group and Synergy
and it is actively pursuing other opportunities.
Tersus Energy's business model
which aims to operate across a number of platforms in
what it believes to be the most attractive areas of
the market, should in the view of the Directors, achieve
risk diversification not available to single platform
companies.
Details of the Placing
Pursuant to the terms of a placing
agreement between the Company and KBC Peel Hunt Ltd
("KBC Peel Hunt"), KBC Peel Hunt has, as agent
for the Company, agreed conditionally to place 11,111,112
Placing Shares with institutional and other investors
at 36 pence per share. As part of the Placing, the management
will in aggregate be subscribing for 277,778 Placing
Shares under the terms of the Placing.
Of this Placing with management,
John Devaney, the Non-executive Chairman and David Wilson,
the Finance Director, has each agreed to subscribe for
83,333 Placing Shares at the Placing Price representing
0.22 per cent. each of the issued share capital as enlarged
by the Placing ("Enlarged Issued Share Capital").
Following completion of the
Placing, John Devaney and David Wilson will own 133,333
Ordinary Shares and 134,771 Ordinary Shares respectively
representing approximately 0.35 per cent. and 0.36 per
cent. respectively of the Enlarged Issued Share Capital.
The Placing price of 36 pence
per Ordinary Share represents a discount of approximately
11.1 per cent. to the closing mid-market price of 40.5
pence per Ordinary Share on 22 December 2005 being the
last dealing day prior to this announcement.
The issue of the Placing Shares
is conditional, inter alia, upon Admission to AIM of
the Placing Shares. Application has been made to London
Stock Exchange plc for the Placing Shares to be admitted
to trading on AIM. The Placing Shares are expected to
be admitted to AIM and to commence trading at 08:00
a.m. on 30 December 2005.
Intended investments
It is intended the funds raised
will be used to make up to seven investments across
the three business units. Whilst in certain cases term
sheets have been signed, execution of all of the transactions
is conditional upon board approval, finalisation of
due diligence and negotiation of full form legal documentation.
The Company has been in active
negotiations in relation to each of the proposed investee
entities and the status of these negotiations is set
out below. Whilst it is the current expectation of the
Directors that the Company should be able to make the
investments as anticipated, there can be no guarantee
that this will occur nor that the investments will be
made on the same or equivalent terms as described below.
The Company will make an announcement
via a recognised information service once terms for
each of the investments are finally agreed.
Tersus Energy Controls:
Company "A"
Company "A" is a US-based developer of controllers
for shunt and series DC motors. There are a number of
potential synergies between Company "A" and
Navitas Technologies (a wholly-owned subsidiary of Tersus
Energy) including complementary distribution channels
and portfolio of products, combination of R&D and
applications engineering expertise, manufacturing synergies
and the possibility of leveraging marketing and sales
staff. Tersus Energy has agreed in principle to invest
US$1.0 million for a 30 per cent. stake in Company "A".
Thor
Thor is a US-based developer of brushless DC ("BLDC")
motor and controller technology. The BLDC solution is
considered by the Company to be more efficient than
traditional AC motors, can deliver twice the power and
is approximately half the size of such traditional motors.
The initial target market is that of industrial tools
where the BLDC advantages of weight, reliability and
efficiency
can be leveraged. Subsequent markets include heating,
ventilation and air conditioning (HVAC), refrigeration
and industrial processes. The Company also believes
that such technology could serve as a platform for the
development of brushless motors and/or controllers for
the vehicle market. Tersus Energy is negotiating an
investment of US$100,000 for an expected 6 per cent.
stake in Thor which is expected to be matched by the
Ben Franklin Fund.
World Energy Labs
World Energy Labs is a US-based developer of advanced
diagnostic technologies for evaluating certain parameters
of energy storage and energy conversion devices (typically
batteries) as well as electrochemical systems. The target
markets are those users of batteries, such as telecommunications
providers and hospitals, where the devices' integrity
is critical. Tersus Energy has entered
into a term sheet which provides for the Company to
acquire a 5 per cent. stake in World Energy Labs costing
US$1.0 million. The deal also gives the Company two
options over a further 5 and 10 per cent of the equity.
Company "E"
Company "E"
is a US-based developer of energy and environmental
information software. Its software has been rolled out
to over 100 utilities and large commercial, industrial,
government and institutional clients. Tersus Energy
is negotiating terms in principle in which it is proposed
that it would acquire Company "E" for US$2.0
million, of which it is proposed that US$1.7 million
of the consideration would be met with cash and the
remaining US$0.3 million in Ordinary Shares.
Tersus BioEnergy:
Enviro-Controls
Enviro-Controls is a UK-based developer of proprietary
thermophilic anaerobic digestion technologies and projects
used to convert organic waste into environmentally useful
materials, including high-quality organic fertiliser,
and
methane gas. The company currently has two successful
pilot plants, one in the UK and one in US. Enviro-Controls
has a pipeline of ten-plus projects in the UK, US and
Asia. Tersus Energy is in negotiations with view to
agreeing a three part arrangement: (i) US$350,000 to
be invested, (ii) an arrangement to secure the pipeline
of projects and (iii) a joint development agreement
which would give the Company the right to invest equity
in projects.
West Lorne BioOil Cogeneration
Through the Company's investment in the NASDAQ-OTC traded
DynaMotive Energy Systems, Inc., which is considered
by the Board to be a market leader in the
biomass to energy market, Tersus Energy has proposed
an investment of US$1.0 million for a 20 per cent. stake
in its first plant subject to operating due diligence
and final terms. The first commercial plant is at the
Erie Flooring production facility (steam and electricity
taker) in West Lorne, Ontario. The West Lorne plant
is understood to have the capacity to convert 100 tonnes
per day of wood residue into approximately 70 tonnes
of BioOil and 20 tonnes of char fuel making it, in the
view of the Board, one of the world's largest pyrolysis
plant and the first BioOil-fuelled cogeneration facility.
The plant, as at the time of this announcement, is physically
complete and in the late stages of commissioning. Contractual
arrangements between West Lorne and off-takers are
currently in negotiation.
The proposed terms of investment
in West Lorne would, in the view of the Board, if implemented
provide a 20 per cent. internal rate of return (IRR)
to the Company. This IRR is based upon a number of assumptions
and there can be no guarantee that such return will
in fact be generated by such investment should it be
made.
Tersus Asian Renewables:
Tang Wind Energy
Tersus Energy has obtained options over 25 per cent.
of the total limited partnership interests in Tang Wind
Energy LP thus affording exposure to Tang Wind Energy's
25 per cent. interest in HT Blade. HT Blade is one of
China's largest domestic developers and manufacturers
of wind blades. HT Blade was incorporated in China in
2001 as a China/US co-operative joint venture and primarily
serves China. However, the Directors consider, that
HT Blade has the potential to expand its sales to other
selected Asian markets. The option is in three tranches.
The first tranche exercise price is $2 million. The
remaining tranches have been determined by reference
to a higher valuation and the aggregate exercise price
amounts to $4 million. HT Blade's majority Chinese shareholder
has indicated that there is an intention to float HT
Blade on a public market at some point in the future.
Update on Navitas Technologies
Navitas Technologies Ltd ("Navitas
Technologies") became wholly owned by the Company
in May 2005 and is focused on the development and manufacture
of high performance microprocessor-based electronic
controls systems for a wide variety of electric vehicles,
with applications in hybrid car and fuel cell technologies.Since
its acquisition, Tersus Energy has been able to implement
a number of improvements throughout the Navitas Technologies
business that have resulted in the company turning from
being loss making to profitable.The Board estimates
that Navitas Technologies has a value of $5-6 million
assuming a multiple of 10 (which the Board considers
to be reasonable) being applied to 2006 expected earnings
before interest and taxation. It should be noted that
this is the Board's own estimate and has not been independently
verified and that it is not intended to comprise a profit
forecast or any assurance that such earnings and valuation
will be achieved.
Update on other holdings
The
Company remains of the view that the enterprise value
of its other portfolio holdings is at or in excess of
the value upon its listing on AIM in February 2005.
The information contained herein is
not for publication or distribution into the United
States. The material herein is for information purposes
only and is not intended, and should not be construed,
as an offer of securities for sale into the United States.
The securities of the Company described herein have
not been and will not be registered under the US Securities
Act of 1933, as amended (the
"Securities Act"), or the laws of any state,
and may not be offered or sold 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 applicable state laws. There is no
intention to register any portion of the offering in
the United States or conduct a public offering of securities
in the United States.
END
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