VANCOUVER, Nov. 6, 2013 /CNW/ - Lignol Energy Corporation
(TSXV: LEC) ("LEC" or the "Company"), a leading technology company
in the advanced biofuels and renewable chemicals sectors, further
to its press release dated September 30,
2013, would like to provide additional information to its
shareholders in connection with the transaction to vary the terms
and conditions of its existing loan to Territory Biofuels Limited
("TBF") in the amount of A$500,000
(the "Loan") and LEC's recently announced investment (the
"Investment") in TBF of up to A$1,000,000.
The Company and TBF have agreed, pursuant to the
entering into of a "Secured Convertible Note Funding Term Sheet"
dated September 27, 2013, that the
Loan and the Investment amounts will be applied to the subscription
for secured convertible notes (the "Notes") of TBF, in the
aggregate amount of up to A$1,500,000. In accordance with its
previous Investment commitment, LEC has provided funding to TBF
totaling A$500,000 and has provided
the opportunity to existing TBF investors to subscribe for the
remaining A$500,000 worth of Notes.
Existing investors of TBF could subscribe for these Notes on the
basis of their proportionate entitlement and LEC has agreed to fund
any amounts not subscribed by these existing shareholders.
The proposed closing for this transaction is still no later than
November 15, 2013 and continues to be
subject to regulatory approval.
The Notes convert at 5 or 15 cents (Australian dollars) per ordinary share
depending on the outcome of several criteria related to the Darwin
facility, the outcome of which is expected to be known by
June 30, 2014. Each of the
Notes is convertible into ordinary shares of TBF after June 30, 2014 and at any time up to November 15, 2018.
Upon completion of the Investment, and the
conversion of all the Notes, LEC is expected to increase its
majority holding up to potentially between 76% and 87% of the
issued and outstanding shares of TBF, and up to potentially between
75% and 86% on a fully diluted basis, assuming no other existing
investors participate in this investment opportunity. LEC currently
owns a 55% controlling interest in TBF.
LEC plans to utilize existing resources to
complete the funding for this investment.
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 Territory Biofuels Limited
("TBF")
TBF 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 economic and market 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.
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 approximately a 55% controlling interest in TBF
prior to the transaction described above. LEC also owns
approximately 21% of Australian Renewable Fuels Limited (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 LEC's ability to complete the funding of TBF in the above
timeframes, the creation of the Notes through the conversion of the
Loan and the applicable amount of the Investment, possible
conversion of the Notes into equity of TBF, the ability of existing
TBF shareholders to participate in the above financing, TBF's
ability to finance, restart and profitably operate its 140 million
liter 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, 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