Emulsion fuel developer
Quadrise Fuels International Plc. (QFI) has announced that it intends to raise approximately GBP3.0 million, or US$4.8 million, (before expenses) via a placing and open offer, thereby allowing the company's existing shareholders the opportunity to participate in the fundraising.
The net proceeds of the placing and open offer are expected to be approximately GBP2.7 million, which the directors claim will be sufficient to take the group to the stage where it is generating net positive cashflow from continuing operations.
Application will be made to the London Stock Exchange for the new ordinary shares subscribed in the placing and open Offer to be admitted to trading on AIM. It is expected that admission will become effective and that dealings will commence on 4th April 2011.
Existing shareholders are being invited to apply for offer Shares, pro rata to their existing shareholdings on the basis of 5 offer shares for every 32 existing ordinary shares held at 5pm on 3rd March 2011, under the open offer at a price of 3.5 pence per offer share, payable in full on application and free of all expenses.
QFI said the open offer had been structured to allow qualifying shareholders to subscribe for offer shares at the offer price pro rata to their holdings of existing ordinary shares.
"Jendens Securities Limited, the company's joint broker, has pursuant to the placing agreement undertaken to use its reasonable endeavours to place any offer shares not subscribed for by qualifying shareholders with certain other investors. Accordingly, Jendens has made arrangements with certain institutional investors, directors and other investors for the offer shares to be placed to the extent that they are not taken up by qualifying shareholders under the open offer." QFI said.
Use of proceeds
QFI said the proceeds would be used to strengthen the group's balance sheet and to meet the current projected business development costs, capital expenditure and general working capital requirements of the group over the next 24 months.
"The board believes that the expected net proceeds of the placing and open offer will allow the company to develop its current projects to the stage when they can generate net positive cash flow from continuing operations. The directors believe that the placing and open offer is the most equitable method to allow as many Shareholders to participate in the company's future as possible." QFI said.
Emulsion Fuel - Progress Summary
QFI produces an oil-in-water emulsion fuel, MSAR® (Multiphase Superfine Atomised Residue), as a low cost substitute for conventional heavy fuel oil (HFO) for use in industrial and marine diesel engines and in power generation plants.
The technology utilises the least valuable elements of the oil barrel resulting in a fuel that is said to be lower in cost than HFO and competitive with natural gas.
MSAR is also said to have superior combustion characteristics to conventional heavy fuel oil, achieving complete carbon burn-out and producing lower NOx emissions.
In March 2010 WFI signed an agreement with Danish shipping group Maersk to jointly develop a marine version of QFI's MSAR emulsion fuel. Commenting on the Maersk Joint Development Agreement (JDA) last year, QFI Chairman
Ian Williams said: "The land based fuel evaluation and qualification process should be complete by December 2010 and a commercial scale proving sea trial is planned for the first quarter of 2011. The agreement provides that on success this will move forward to a commercial phase for the supply of MSAR® marine fuel, initially to the Maersk shipping fleet. Revenues from this sector are anticipated before December 2011.
"The marine fuels market is now expected to form a major component of the company’s future business mix. Growth in this very large global fuel oil market is expected to follow the recovery of international trade and commodity movements," added Williams.
In a statement this week, the company said: "The marine MSAR® fuel programme is advancing towards the commercial phase. QIL, Maersk, AkzoNobel and certain major refiners are working jointly in a coordinated programme aimed at the production, supply and marketing of MSAR® marine fuel as an approved low cost replacement for bunker fuel. Bunker fuel oil is a global market of over 170 million tonnes per annum. Securing even a modest share will provide substantial underpinning of the future value of QFI. The project has advanced through progressive technical development and is nearing the end of the pre-commercial phase. In anticipation of successful progression, Maersk and QIL have entered into a Royalty Agreement, which provides the legal framework for future commercial sales of Marine MSAR® fuel to Maersk and third parties," QFI said.
