NAND Nandan Cleantec

TIDMNAND

RNS Number : 7214R

Nandan Cleantec plc

09 November 2011

NOT FOR DISTRIBUTION INTO THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA, SOUTH AFRICA, THE REPUBLIC OF IRELAND, SINGAPORE OR JAPAN OR ANY COUNTRY WHERE SUCH DISTRIBUTION MAY LEAD TO A BREACH OF ANY LEGAL OR REGULATORY REQUIREMENT

Nandan Cleantec plc

Admission to AIM and First Day of Dealings

Nandan Cleantec plc ("Nandan" or the "Company"), a scaled vertically integrated biofuel producer, is pleased to announce its admission to AIM and that trading in its ordinary shares commenced today. Nandan's AIM symbol is "NAND" and the ISIN number is GB00B713ZZ63.

-- Arden Partners, the Company's Nomad and broker, has placed 26,834,222 new ordinary shares on behalf of the Company raising approximately GBP16.1 million before expenses.

-- The ordinary shares were placed at a price of 60 pence per ordinary share, implying a market capitalisation of Nandan on Admission of GBP166.1 million.

-- The Placing Shares represent approximately 9.7 per cent. of the Company's Enlarged Issued Share Capital.

-- The proceeds of the issue of new ordinary shares will be used to enable the Company to develop a large sustainable feedstock supply of Jatropha for the production of biodiesel.

Overview

Nandan is a scaled vertically integrated biofuel producer. It has developed a number of revenue streams geared towards the ultimate provision of commercially refined biofuel derived from Jatropha plants or other suitable feedstocks.

The Group's current activities are concentrated in India and include innovative plant breeding and genetic improvement of Jatropha, a 275,000 MT per annum biofuel processing plant which sells biodiesel to end customers and a Jatropha feedstock plantation base of approximately 51,000 ha. In addition, the Group has initiated activities in India, Africa and Southeast Asia in order to further develop its land bank.

The Group has a profitable track record and, the Directors believe, has excellent growth prospects as it looks to expand its land bank and maximise the opportunities from its Jatropha hybrids as well as opportunities for the Nutraceutical division.

Nandan's strategy is to maximise the potential of its position as a pioneer in Jatropha biofuel sciences. This will involve exploiting the Group's position as a market leader in the Indian biofuel industry.

Prasad Moturi, Executive Chairman of Nandan said:

"We are delighted with the response we have received from UK institutional investors. Admission to AIM is a logical next step for us in our Company's development and today's announcement marks an important milestone that will help us to accelerate the delivery of our strategy. We have a strong, profitable and proven business model and are excited about the opportunities open to us as the world looks to diversify its energy supply. We welcome our new investors and look forward to working in partnership with them to develop our compelling biofuel solutions."

 
Contact: 
Nandan Cleantec plc 
 Prasad Moturi, Executive Chairman 
 Bhaskar Rao, Managing Director             020 3219 5786 
 
Arden Partners plc (Nominated Adviser and 
 Broker) 
 Steve Douglas 
 Chris Thomas 
 Jamie Cameron                              0121 423 8900 
 
FTI Consulting 
 Matt Dixon 
 Emma Appleton                              020 7831 3113 
 

History

Nandan has two principal operating subsidiaries: Nandan Biomatrix Limited ("NBL") and Xtraa Cleancities Limited ("XCC").

NBL was formed in 1999 and, historically, has traded Jatropha plantlets and Nutraceutical products. XCC was formed in 2006 and began operating its biodiesel processing facility in 2008 following its construction over the previous two years.

The Directors believe that the combination of these operations provide the Group with a firm footing from which to develop and scale a vertically integrated business model. Nandan has control of the value chain throughout the life cycle of the Jatropha crop, from developing hybrids and cultivating hybrids to seed oil extraction, oil refining and subsequent sale.

Strategy

Nandan's strategy is to:

-- Maximise the potential of its position as a pioneer in Jatropha biofuel sciences. This will involve exploiting the Group's position as a market leader in the Indian biofuel industry;

-- Encourage and support the development of Jatropha cultivation using Nandan's hybrids to create a long-term sustainable crude Jatropha oil supply;

   --      Expand the Group's operations in other jurisdictions outside India; and 

-- Continue the Group's development of Jatropha hybrids in order to improve their economic yield potential for farmers.

In addition to improving the Jatropha yield per ha, the Company will look to enhance its current production capacity through geographical expansion and improving process technologies.

Key Business Strengths

The Directors consider the following to be the key strengths of the Group:

-- Nandan is a scaled, vertically integrated biofuels company, allowing the Group to control all areas of the biofuel value chain;

-- The Group has invested many years in understanding, developing and improving the properties of its Jatropha hybrids such that it now has Nandan 1, which yields 1.5 to 2 times that of a standard Jatropha;

-- The next generation of hybrid, which is in the process of being patented and is ready to be rolled out across the estate, yields significantly more than Nandan 1;

-- Plant yield naturally increases over five years. As the existing land bank has yet to mature to this age, there is significant natural yield growth that should financially benefit the Group in the short to medium term;

-- The Group is in discussions with commercial partners, Indian state governments and other organisations outside India which could deliver a further c.958,000 ha to its land bank of which, members of the Group have initial agreements in place to develop estates of up to 46,000 ha in Indonesia, 20,000 ha in Botswana and 8,000 ha in Rwanda;

-- The Group owns one of the largest and most advanced biodiesel plants in India, which is profitable and has significant scope to increase revenues through improved utilisation;

-- The Group has substantial revenues already and a profitable track record, giving it a solid financial base from which to build;

-- Next generation technologies are being developed with partners to create further value-added products;

-- A strong balance sheet (asset backed with owned land and a biodiesel plant), cash generative from existing operations; and

-- The Directors believe that the Group operates in a very attractive market which is likely to exhibit increasing demand in the future. Furthermore, the use of Jatropha as a biofuel is considered to be a sustainable solution, unlike a number of other biofuel solutions.

Energy Market

According to the International Energy Outlook 2011 (IEO2011) projections, global energy demand is to increase by 52 per cent. between 2008 and 2035.

This growth in energy consumption is forecast to be driven by demand from the developing world as it continues to modernise through rapid industrialisation and urbanisation. In contrast, already industrialised countries are expected to move increasingly into less energy intensive, service and knowledge based economies.

Bio-fuel Competiveness

The Copenhagen Accord has seen targets established for carbon reduction for nations covering approximately 80 per cent. of global emissions.

Increasing energy consumption and oil prices, together with carbon reduction targets, increase the need to find alternative clean sources which ensure energy security and reduce harmful emissions. The use of biofuels is emerging as a valuable option to providing a solution to this problem.

Renewable energy is estimated to provide around 16 per cent. of the world's energy needs, with modern biofuels contributing a growing share of this energy provision.

Biodiesel production is estimated to have increased around 9 per cent. in 2010, to approximately 19 billion litres globally. However, the growth of adoption has slowed considerably in the majority of regions, partly due to lack of availability of feedstock.

Mandatory blends and utilisation targets play an essential role in the development and expansion of the biofuels sector. Analysis of existing production capacity and mandatory targets suggests a demand/supply gap for almost all countries, with expected blending targets increasing demand for biodiesel to about 67.3 billion litres per annum until 2022. However, the world's installed capacity of biodiesel is only forecast to be able to produce a maximum of 48.9 billion litres of biodiesel. Thus, production capacity will need to increase by approximately 18.4 billion litres per annum to meet the expected blending targets until 2022.

Jatropha

Jatropha is an oilseed plant which can be used for a variety of non-edible purposes and is regarded as a sustainable crop as it grows on marginal, scrub land which is unsuitable for arable purposes. The plant has several attractive properties including its hardiness, rapid growth, easy propagation and ability to grow on poor land. The plant exhibits a wide environmental tolerance, as it is found in both the seasonally dry tropics as well as equatorial regions and is well adapted for cultivation on the vast areas of marginal and degraded lands in the semi-arid and arid tropics.

Jatropha oil has been successfully used as a feedstock to produce biodiesel capable of conforming to the two key international standards - ASTM D6751 and EN14214.

Directors

Srinivas Prasad Moturi (aged 49), Executive Chairman

Srinivas Prasad Moturi has 25 years' experience in business administration. He founded Asia's then largest biofuel processing facility, after successfully managing his other businesses in information technology and construction for over two decades. Srinivas Prasad has successfully risen through the management levels of the Company. His strategic leadership and ability to engage successfully with the workforce has been an important factor in the success of the Group.

Bhaskar Rao Volam (aged 48), Managing Director

Bhaskar Rao Volam is one of the key founder-promoters of NBL and implements the corporate strategies of the Group. He holds a law degree and practiced patent law for approximately 12 years prior to setting up NBL. He has experience in representing leading pharmaceutical companies, bulk drug companies and agribiotech companies on their patents and trademarks. He has experience in business development of companies ranging from start ups to large organisations giving him an extensive business network. In addition, he has been instrumental in the development of the Group's strategy and internal systems.

Bhupendra Kansagra (aged 55), Non-executive Director

Bhupendra Kansagra is currently serving as a Director of Finance of the Kansagra family group company, Solai Holdings Limited (established in the early 1970s; 2010 turnover: US$540 million) whose principal activities are those of investments, management and administrative services, property development, export of fertiliser, chemicals products, plant & machinery, sale of petroleum products, agricultural supplies and shipping. He also serves on the board of Union Maritime Limited as a Director of Finance. This is the Kansagra family joint venture in shipping (2010 turnover: US$40 million), its activities include ownership of vessels, freight, charter hire, provision of management services to the shipping industry, hiring of shipping equipment and accessories. He is a board member on a number of companies and has a wide range of entrepreneurial experience.

Mark Woodall (aged 49), Non-executive Director

In the last 18 years, Mark founded and led both Climate Change Capital and Impax Capital, two of the leading independent investment management and advisory companies for energy and the environment in the UK. He has initiated, completed or overseen the establishment of multiple funds and the structuring and financing of dozens of cleantech transactions, with a combined value of some US$4.1 billion. Mark has also been actively engaged in the development and implementation of public policy and finance, in the UK and beyond, to help deliver the low carbon economy. Since 2009, Mark has been actively developing a portfolio of non-executive roles in the clean technology, low carbon and financial markets. Among others, he is the Chairman of Stirling DK, a world-market leader in the field of clean power generation from low grade fuels sources, and a director of HomeSun, a leading provider of free solar PV installations for the UK residential market. Mark holds an MBA from the Cranfield School of Management and was an Officer in the British Army, trained at the Royal Military Academy, Sandhurst.

Admission Document

A copy of the Company's Admission Document can be found on the Company's website at www.ncp.uk.com.

Terms used in this Announcement have the same meaning as in the Company's Admission Document.

This information is provided by RNS

The company news service from the London Stock Exchange

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