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VANCOUVER,
Aug. 14, 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 announcement of
February 27, 2013, the Company has
replaced its secured credit facility of $5
million, which was amended on July 9,
2013 for up to $6.25 million
(the "Amended Loan"), with a new secured revolving credit facility
(the "Note") of up to $12.5 million
with Difference Capital Financial Inc. ("DCF"), who prior to this
transaction own 33.9% of LEC on a partially diluted basis, assuming
the exercise of only DCF's warrants.
"This support from one of our major shareholders
provides us timely access to the funds needed to capitalize on
commercial opportunities in our sector. Today's announcement
is another step forward in executing our strategy to transform our
company in to a global biorefining and biochemicals company", said
Ross MacLachlan, CEO and Chairman of
LEC.
Under the terms of the Note, 50% of the unpaid
principal amount and accrued and unpaid interest on such amount
will be payable on the closing of an equity financing of at least
$20 million (as long as none of the
outstanding Warrants (as defined below) remain unexercised) and the
remaining unpaid principal amount and accrued and unpaid interest
on such amount be payable on December 31,
2014. Amounts drawn under this facility will bear
interest at 9% per annum and any amount owing under the Amended
Loan (the "Drawn Amount") is deemed to be a borrowing under the
Note. The Company shall pay to DCF a commitment fee of
$200,000, of which $100,000 has already been paid in respect of the
earlier credit facilities. The Note provides DCF with a security
interest in all of the shares owned by LEC of each of Australian
Renewable Fuels Limited ("ARW") and of Territory Biofuels Limited
("TBF").
In connection with providing the Note, DCF is
entitled to receive 3,555 warrants to purchase common shares in the
capital of LEC (each a "Warrant Share") for each $1,000 drawn down, which allows for up to
approximately 44.4 million warrants (the "Warrants") to be issued
and if fully exercised, would result in DCF owning 48.3 percent of
LEC on a partially diluted basis, assuming the exercise of only
DCF's warrants. DCF has received 21,418,875 Warrants in respect of
the Drawn Amount. Each Warrant is non-transferrable, shall
expire on December 31, 2014 and
entitle the holder to purchase one Warrant Share at an exercise
price of $0.15 per share, subject to
any adjustments necessary to comply with applicable securities laws
and requirements of the TSX Venture Exchange or any other stock
exchange in which the Lender's securities are listed.
The Company has made a draw down request for
which it received $2.5 million from
DCF and in accordance with the Note has issued to DCF 8,887,500
Warrants. These funds have been requested by LEC in order to meet
current and short term financial obligations. If DCF were to
exercise the Warrants issued in respect of this withdrawal, the
Drawn Amount and all other warrants currently owned by DCF, then
DCF would potentially own 44.4 percent of LEC.
About Difference Capital Financial Inc.
("DCF")
Difference Capital Financial Inc. (TSXV: DCF) is
a publicly-listed, Toronto-based
specialty finance company focused on creating shareholder value
through strategic investments in, and advisory services for, growth
companies, particularly in the technology, media and healthcare
sectors, as well as through opportunistic investments in
undervalued financial assets and real property.
About Lignol Energy Corporation
("LEC")
LEC (TSXV: LEC) is an emerging producer of
biofuels, biochemicals and renewable materials from waste biomass.
LEC owns 100% of the issued and voting shares of Lignol Innovations
Ltd. ("LIL"); a Canadian biorefining company with an integrated
pilot plant demonstrating its technology for the production of
cellulosic ethanol, high value cellulose and high performance
lignin. LEC owns a 55% controlling interest in Territory Biofuels
Limited; the largest single biodiesel plant in Australia (140 million litres per annum),
which includes the largest glycerine refinery in the country.
LEC also owns 21% of Australian Renewable Fuels (ASX: ARW);
currently the largest biodiesel producer in Australia with three plants having a combined
150 million litres per annum capacity. LEC also 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.
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 Note, the repayment of the Note, the
issuance of the Warrants, the ability to draw down additional funds
in the future, TBF's ability to finance, restart and profitably
operate its 140 million litre per year biodiesel plant and
glycerine refinery, TBF's ability to successfully operate the
Darwin facility and to generate revenues and cash flow, TBF's
ability to obtain US EPA approval, TBF's ability to work with
strong commercial partnerships and to become a major regional
player in the biodiesel market in the Pacific Rim, TBF's ability to integrate new
pretreatment technologies and catalysts to facilitate the
processing of a broad range of lower cost feedstocks, the
successful outcome of projects undertaken under the Technology
Collaboration Agreement between LEC and TBF, LEC's ability to
continue as a going concern and to raise additional financing to
fund the operations of LEC and LIL and to support the financing
requirements of TBF, DCF's ability to provide additional
funding in the future under the increased line of credit, DCF's
ability to exercise its Warrants, LEC's ability to invest in, or
otherwise obtain, equity interests in energy related projects which
have technical and commercial synergies with the Company and which
have the potential to generate future dividends and near term cash
flow, 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, to meet current obligations, 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,
LIL's ability to obtain requisite regulatory approvals and its
ability to enter into agreements with strategic partners on terms
acceptable to us, LEC's ability to influence the strategy,
operations and financial performance of TBF or of ARW respectively,
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 and the inability to divest the TBF ordinary
shares, the cost of any future ARW capital investment, the
fluctuation of biodiesel and feedstock prices on ARW and TBF, the
effect on ARW and TBF of changes in government policy relating to
the environment, and incentives for renewable fuels, the ability of
ARW and TBF to generate cash flow and pay dividends, and the
ability of ARW and TBF to market their products overseas and to
meet relevant regulatory requirements. 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