VANCOUVER,
Sept. 5, 2013 /CNW/ - Lignol Energy
Corporation (TSXV: LEC) ("LEC" or "the Company"), a leading
technology company in the advanced biofuels and renewable chemicals
sectors, today announced that it will provide funding of
A$4,070,000 to acquire a 40% equity
stake in Neutral Fuels Parent Company ("Neutral Fuels") and a 51%
interest in Neutral Fuels' Australia and New
Zealand biodiesel operation, Neutral Fuels (Melbourne) Pty Ltd. ("NFANZ"). This funding is
for the deployment of the next phase of a planned rollout of closed
loop biorefineries throughout the Asia
Pacific/Middle
East/Africa region
("APMEA") in an agreement with the McDonald's Restaurants used
cooking oil biodiesel program. Under the agreement with
McDonald's, Neutral Fuels currently operates two closed loop
biorefineries located in Dubai, United
Arab Emirates and Melbourne,
Australia.
Neutral Fuels' closed loop business model, which
was developed specifically for McDonald's, takes used cooking oil
from its local restaurants and in return provides B100 biodiesel to
fuel its suppliers' delivery fleets. The company has been featured
in print and television media including;
CNN: : http://tinyurl.com/Neutral-Fuels-CNN
BBC : http://tinyurl.com/Neutral-Fuels-BBC
"Neutral Fuels has developed world-class
biorefineries employing state-of-the-art processing technology
which has established them as an emerging leader in the niche of
small scale biofuel operators", said Ross
MacLachlan, CEO and Chairman of LEC. "We are excited
to be involved in this commercial venture. Their novel
business model and collaboration with McDonald's is an attractive
and sustainable model both in terms of the environment and in
commercial terms."
"Partnering with LEC is the logical next step
for Neutral Fuels. Our current technology is able to efficiently
convert used cooking oil to biodiesel today, and LEC's next
generation technology provides us with some exciting options for
the future." said Karl W. Feilder,
CEO and Chairman of The Neutral Group.
The terms of the agreement between LEC and
Neutral Fuels provide for two tranches of funding for a total of
A$4,070,000. Each tranche will be
comprised of a shareholder loan which will rank pari passu with the
existing shareholder loans currently in place, which are for a five
year term, interest free and unsecured. The first tranche
will be funded on or before 15 October,
2013 with a A$2,000,000
loan. On the funding of the first tranche, LEC will be issued
a 20% equity stake in Neutral Fuels and a 51% stake in NFANZ.
On the funding of the second tranche of A$2,070,000 on 15 January
2014, LEC will be issued an additional 20% equity stake in
Neutral Fuels; resulting in a A$4,070,000 loan owing to LEC and an equity
interest of 40% ownership of Neutral Fuels as well as a 51% equity
stake in NFANZ. As part of this agreement LEC has advanced an
interest free A$500,000 loan secured
against the assets of NFANZ which will be retired and then applied
to the first tranche of A$2,000,000
on or before 15 October, 2013.
Neutral Fuels current management team will continue to manage all
of the operations with support as required from LEC.
The closing of this transaction is
conditional upon regulatory approval. Neither TSX Venture Exchange
nor its Regulation Services Provider (as that term is defined in
the policies of the TSX Venture Exchange) accepts responsibility
for the adequacy or accuracy of this release.
About Neutral Fuels
Neutral Fuels owns and manages biorefineries
that convert used cooking oil into biodiesel, the modern,
sustainable replacement for fossil diesel. On a lifecycle basis,
biodiesel accounts for over 80% reduction in carbon dioxide and
equivalents, the major contributors to climate change. Neutral
Fuels pioneered the closed loop business model which was developed
specifically for McDonald's, where used cooking oil is collected
from McDonald's restaurants by the same vehicles that deliver the
fresh oil. The used oil is then backhauled to the co-located
Neutral Fuels biorefinery where it is converted, litre for litre,
into biodiesel, which is then pumped back into the delivery fleet
in an ongoing recycling process.
In Dubai, used
cooking oil is collected from more than 100 McDonald's UAE
restaurants each month and their fleet of supply trucks in the UAE
has to date driven more than 2 million kilometres on Neutral Fuels
B100 biodiesel. In Victoria,
Australia the Neutral Fuels biorefinery currently services
the used cooking oil from more than 140 McDonald's restaurants.
Neutral Fuels, headquartered in Dubai, UAE, is a member of The Neutral Group,
the international cleantech organisation founded in 2006 to build
sustainability strategies for the logistics, energy and hospitality
industries and to execute significant reductions in energy spend
and CO2 emissions. CEO and founder, Karl W Feilder, won
the Asian Sustainability Leadership Award in September 2012 and was awarded Innovator of the
Year 2011 by LOG Magazine for his work in carbon savings in the
Middle East. For more information
please visit www.biodiesel.ae
About Lignol Energy Corporation ("LEC")
Lignol Energy Corporation is an emerging
producer of biofuels, biochemicals and renewable materials from
waste biomass. LEC is actively involved in the management of
its wholly owned subsidiary Lignol Innovations Ltd. and in the
management of Territory Biofuels Limited, in which it has a
controlling interest, but has no influence over the activities of
Australian Renewable Fuels Limited. The Company intends to
invest in, or otherwise obtain, equity interests in energy related
projects, which have synergies with the company and have the
potential to generate near term cash flow.
Lignol Innovations Ltd. ("LIL")
The Company's wholly owned subsidiary, LIL is a
leading technology company in the advanced biofuels and renewable
chemicals sector undertaking the development of biorefining
technologies for the production of advanced biofuels, including
fuel-grade ethanol, and other renewable chemicals from non-food
cellulosic biomass feedstocks. LIL's modified solvent based
pre-treatment technology facilitates the rapid, high-yield
conversion of cellulose to ethanol and the production of
value-added biochemical co-products, including high purity
HP-LTM lignin. HP-LTM lignin represents a new
class of high purity lignin extractives (and their subsequent
derivatives) which can be engineered to meet the chemical
properties and functional requirements of a range of industrial
applications that until now has not been possible with traditional
lignin by-products generated from other processes. LIL is executing
on its development plan through strategic partnerships to further
develop and integrate its core technologies on a commercial
scale.
Territory Biofuels Limited ("TBF")
The Company presently owns a controlling 56%
equity stake in TBF (and is in the process of increasing that stake
to up to 66% pursuant to the August 19,
2013 news release), a company which owns a large scale
biorefining facility located in Darwin, Northern Territory which
includes a Lurgi-designed biodiesel plant and the largest glycerine
refinery in Australia. The
facility was commissioned in 2008 at a cost of A$80 million, along with 38 million litres of
related tankage, now leased by TBF. The biodiesel plant is the
largest in Australia with a rated
capacity of 140 million litres per year. The plant was originally
built to run on palm oil and food-grade vegetable oil, however the
plant was shut down in 2009 due to challenging technical and
economic conditions. To take advantage of current market
opportunities, TBF is in the process of raising funds to restart
the existing facility utilizing a specific grade of palm oil;
environmentally certified, Refined Bleached & Deodorized (RBD)
palm oil. In 2014, TBF plans to integrate new feedstock
pre-treatment technologies and catalysts to process a broader range
of feedstocks such as lower quality tallow, used cooking oil and
palm sludge oil; a waste product from palm oil mill extraction. LEC
has appointed a majority of the Board of TBF which includes two
executives and directors of LEC, one of whom is Chairman of the
Board. Since obtaining a controlling interest on April 15, 2013, LEC has been actively engaged in
the operations of TBF and in supporting TBF to obtain access to
additional finance to restart the Darwin plant and to enable the
company to commence commercial operations.
Australian Renewable Fuels ("ARW")
The Company currently owns a 21% investment in
ARW, a company listed on the Australian Stock Exchange (ASX: ARW),
which is the largest biodiesel producer in Australia owning three plants with a total
nameplate capacity of 150 million litres per annum. ARW's three
plants were built at an aggregate cost of over A$100 million. ARW has made significant changes
in recent years to become a more cost effective producer of high
quality biodiesel to address growing biofuel demand in the
Australian market. In March 2013, ARW
completed an equity financing of A$12.3
million, which was partially funded by LEC, for the purpose
of repaying existing debt and to provide additional working
capital. Further information about ARW can be found at
www.arfuels.com.au
Caution concerning forward-looking
statements:
Certain statements contained in this document
may constitute forward-looking information within the meaning of
applicable securities laws. Such forward-looking statements or
information include, without limitation, statements or information
about LEC's ability to complete the provision of funding of
A$4,070,000 to Neutral Fuels within
the agreed timeframes, LEC's ability to invest in, or otherwise
obtain, equity interests in energy related projects which have
potential synergies with the Company and which have the potential
to generate near term cash flow, LEC's ability to increase its
stake in TBF in the future, the ability of The Neutral Fuels
Group to complete the transfer of all of its liquid fuels business
to Neutral Fuels before the completion of the funding of the
transaction, the ability of Neutral Fuels to complete the rollout
of closed loop biorefineries in accordance with its agreed
timetable, TBF's ability to finance and restart its 140 million
litre per year biodiesel plant and glycerine refinery and to
commence commercial operations, and TBF's ability to integrate new
pretreatment technologies and catalysts to facilitate the
processing of a broad range of lower cost feedstocks.
Often, but not always, forward looking
statements or information can be identified by the use of words
such as "plans", "expects" or "does not expect", "is expected",
"budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates" or "does not anticipate", or "believes" or variations
of such words and phrases or words and phrases that state or
indicate that certain actions, events or results "may", "could",
"would", "might" or "will" be taken, occur or be achieved.
Such statements or information reflect LEC's
current views with respect to future events and are subject to
certain risks, uncertainties and assumptions including, without
limitation, LEC's ability to raise additional capital to fund
operations and to support the capital requirements of its
affiliates, the requirements of the potential effect of changes in
government policy relating to the environment, and incentives for
renewable fuels, the potential impact of changes in the prices of
feedstock and the market price of liquid fuels including biodiesel,
ethanol and renewable chemicals, the ability of LEC's subsidiary,
associate and investee company to generate future profits and to
pay dividends, and to meet increasing regulatory requirements,
LEC's ability to divest the ARW ordinary shares due to modest
trading volumes,
Many factors could cause LEC's actual
results, performance or achievements to be materially different
from any future results, performance or achievements that may be
expressed or implied by such forward-looking statements or
information, including among other things, financial market
conditions which will impact LEC's ability to finance its
operations and to meet future capital and investment requirements,
the demand for the market price of liquid fuels including gasoline,
biodiesel, ethanol, the market price and demand for renewable
chemicals, risks relating to the protection of technology from
infringement and those risk factors which are discussed elsewhere
in documents that LEC files from time to time with securities and
other regulatory authorities. Should one or more of these risks or
uncertainties materialize, or should assumptions underlying the
forward-looking statements or information prove incorrect, actual
results may vary materially from those described herein as
intended, planned, anticipated, believed, estimated or expected.
Except as required by law, the Company expressly disclaims any
intention or obligation to update or revise any forward looking
statements and information whether as a result of new information,
future events or otherwise. All written and oral forward-looking
statements and information attributable to us or persons acting on
our behalf are expressly qualified in their entirety by the
foregoing cautionary statements.
SOURCE Lignol Energy Corporation