CPO Compact Power

RNS Number:9471U
Compact Power Holdings PLC
17 April 2007



Compact Power to supply prototype biomass to energy plant



Compact Power Holdings Plc is pleased to announce that it has entered into an
agreement to supply a prototype biomass plant to a private individual through
Guildhall Engineering Limited.  This is the first in a programme of biomass to
energy projects which will be completed over the next 12 months.



Under the terms of the agreement, a design and technology fee of #200,000 is
payable immediately to Compact Power. Once built, the plant will be operated by
a new company, The Compact Power Biomass Company Limited, which will be owned as
to 10 per cent. by the private individual and the balance by Compact Power with
up to 25 per cent. being available for directors and staff.



In addition, Compact Power has been informed that the same private individual
has acquired the legal ownership of the existing plant at Avonmouth from Capital
Leasing.  This will have no effect on the existing operational arrangements at
the plant save that the monthly guaranteed net operating profit payable by
Compact Power has been increased to #25,000 per month. For accounting purposes
the plant will continue to be recognised as an asset on Compact Power's balance
sheet.  The private investor has also been assigned the benefit of Compact
Power's outstanding obligations to Capital Leasing amounting to #141,667 plus
its percentage share of current and future profit share from the plant.  The new
owner has agreed, subject to the granting of suitable security, to defer payment
of these outstanding obligations until 30 September 2007 or such earlier date as
Compact Power raises the additional funds.  In addition, he has the option to
convert such sums into Compact Power shares at a price of 30 pence per share or
any such lesser price at which Compact Power may issue shares or grant options
during that period.



It is intended that the A1 plant will be re-financed as part of the financing
package being negotiated for the new proposed plant at Avonmouth ('A2').  If by
30 June 2007 financing for A2 has not been secured, Compact Power will be
obliged to provide loan funding of #1m on terms to be agreed to substitute for
this re-financing of the Avonmouth plant.



Negotiations for the financing of the second Avonmouth plant are still
progressing satisfactorily albeit slower than expected.  Finalisation of
negotiations is now anticipated in May. Until financial completion of the second
plant is achieved Compact Power's working capital position will continue to be
tight.



Notes to editors



About Compact Power



Compact Power (LSE: CPO) a company listed on The London Stock Exchange (AIM) has
developed an innovative technology based on pyrolysis, gasification and high
temperature oxidation for the safe, economic and environmentally friendly
processing of a wide range of wastes and biomass with energy recovery.  The
company operates a commercial plant at Avonmouth, Bristol.



For more information, visit www.compactpower.co.uk





Contacts



Compact Power
Nic Cooper - Chairman
Richard Hogg - Business Development Director
Tel: 0117 980 2900



Blue Oar Securities Plc
Mike Coe - Director
Tel: 0117 933 0020
Barrie Newton - Director
Tel: 01225 424 666



Winningtons Financial PR
Paul Vann
Tel: 0117 920 0092




                      This information is provided by RNS
            The company news service from the London Stock Exchange
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