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VANCOUVER,
Feb. 27, 2013 /CNW/ - Lignol Energy
Corporation (TSXV: LEC) ("LEC" or the "Company"), a leading
technology company in the advanced biofuels and renewable chemicals
sector, is pleased to announce that further to its previous
announcement, the Company has entered into a secured credit
facility for up to $5 million with
Difference Capital Funding Inc. ("DCF"), a major shareholder of
LEC. Amounts drawn under this facility will bear interest at
8% per annum and the facility will mature on the earlier of
February 27, 2014 or upon the
completion of an equity financing raising gross proceeds of at
least $5 million. These funds will
initially be secured by a general security agreement providing for
a security interest in all of LEC's present and future personal
property until such time as DCF has a perfected security interest
in all of the shares of Australian Renewable Fuels Limited ("ARW")
owned by LEC pursuant to a share pledge agreement. Once DCF's
security interest in the ARW shares has been perfected, the general
security agreement will be terminated.
"This credit facility from DCF provides
the flexibility in our financial planning to take advantage of
strategic opportunities, such as participating in the recently
announced private placement and rights offering of Australian
Renewable Fuels, which is expected to result in LEC becoming one of
ARW's largest shareholders", said Ross
MacLachlan, President & CEO. "The support from DCF as
one of our major shareholders is very encouraging and reinforces
LEC's commitment to its strategy of taking significant equity
stakes in companies such as ARW which have the potential of
generating near term cash flow."
About Lignol Energy Corporation
("LEC")
LEC (TSXV: LEC) owns 100% of the issued and
voting shares of Lignol Innovations Ltd. ("LIL") and is one of the
largest shareholders of Australian Renewable Fuels Ltd (ASX: ARW).
LEC also intends to invest in, or otherwise obtain, equity
interests in energy related projects which have synergies with its
biorefining technology.
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. For more information please visit Lignol's
website at www.lignol.ca.
ARW 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 approximately
A$150 million. ARW has made
significant changes in recent years to become a cost effective
producer of high quality biodiesel to address growing biofuel
demand in the Australian market. ARW has recently announced
proposed transactions to raise a combined A$12.3 million in cash through a placement and an
entitlement offer. More information on ARW can be found at their
website; www.arfuels.com.au.
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.
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
the entering into the share pledge and the subsequent termination
of the general security agreement, our ability to complete the
acquisition of additional shares of ARW, the ability of ARW to
generate near term cash flow and to pay dividends to shareholders,
the transaction entered into by ARW and the resulting change to the
LEC equity interest in ARW and to continue as a going concern and
to raise additional financing to fund the operations of LEC and
LIL, the development status of LIL's fully integrated pilot scale
biorefinery in Burnaby, British
Columbia, the planning and development of a commercial
plant, LIL's ability to complete project deliverables which are
funded in part by government agencies, obtaining strategic
partnership investments and government funding for initial
commercial projects. 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, our ability to establish the validity of LIL's
technology at the fully integrated biorefinery pilot plant scale,
LIL's ability to satisfy the conditions of existing government
grants and to obtain new additional grants, our ability to continue
to finance our operations and to finance and complete the
development of a commercial project, LIL's ability to work with
Novozymes to produce cellulosic ethanol at production costs
competitive with gasoline and corn ethanol, LIL's ability to
develop products and to obtain off-take agreements, our ability to
obtain requisite regulatory approvals and our ability to enter into
agreements with strategic partners on terms acceptable to us, the
inability to influence the strategy, operations and financial
performance of Australian Renewable Fuels Limited ("ARW"), the
reliance on publically available information of ARW in the
Company's evaluation of its acquisition of shares in ARW, the
potential inability to divest the ARW ordinary shares due to modest
trading volumes, the cost of future ARW capital investment, the
fluctuation of biodiesel and feedstock prices on ARW, the effect on
ARW of changes in government policy relating to the environment,
and incentives for renewable fuels. 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, the technological
challenges that remain to be surpassed in obtaining the necessary
operating data from LIL's fully integrated biorefinery pilot plant
that is required prior to completing the next scale-up of the
technology, financial market conditions which will impact our
ability to finance our operations and to finance the construction
and operation of a commercial plant, the price of gasoline and
demand for ethanol, the market pricing and demand for renewable
chemicals, risks relating to the protection of LIL's core
technology from infringement and those risk factors which are
discussed elsewhere in documents that LEC files from time to time
with securities 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