Eco Innovator March 2012

Equity Capital

Cleantech Companies Raise $19.1 Million

Despite the summer holidays, cleantech companies were able to raise a total of $19.1 million over January and February.

The data includes an investment by the formal venture capital industry - $1.5 million by OneVentures in Peak 3 Pty Ltd, the only investment in the sector by a venture capital firm in recent time and which is public.

There was a multi-million dollar investment from an overseas corporate venturer, BW Ventures, in BioGill, which is commercializing technology for treating waste water. The exact amount was not disclosed.

An unnamed company raised $390,00 of follow-on funding from two angel investor groups - $225,000 from Gold Coast Angels and $165,000 from Brisbane Angels. The company has developed and patented a clean chemical process technology that can be used worldwide for large scale mining, industrial and environmental applications

And $300,000 was raised on the ASSOB Small Scale Offerings Board by sustainable agriculture company SustainAg Global.

The balance of the capital, $16.9 million was raised by nine companies on the ASX, once again showing that Australia's largest capital raising platform is also by far and away our best market for raising venture capital.

Geothermal energy developer Geodynamics raised the largest amount, $6.2 million from its share purchase plan that was oversubscribed. Together with $3.8 million from an institutional placement in December it has raised $10 million.

The share purchase plan and institutional placement were conducted by joint lead managers RBS Morgans and Austock.

The capital will progress the company's Cooper Basin Geothermal Project, commencing with drilling Habanero 4 which was planned to spud in February.

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Algae to energy developer Algae.Tec also raised a significant sum - $5 million through a placement to sophisticated and professional investors at 40 cents per share. The capital is to fast-track recently announced commercial algae-to-biodiesel projects with major companies in China, Sri Lanka and Europe.

The placement was organized by through Patersons Securities.

Executive chairman, Roger Stroud, said "This again demonstrates that sophisticated investors are aligned with the need for alternative transport fuel technologies such as the Algae.Tec enclosed algae to biofuels solution. The market is also responding to the recent milestones and commercial deal announcements the company has signed."

Algae.Tec is commercializing a high-yield enclosed algae growth and harvesting technology, the McConchie-Stroud system.

The company has announced a 50/50 equity joint venture in China with Shandong Kerui Group Holding Ltd. The first project under the joint venture will be the construction of a 250-module algae biofuels facility in China to be equally funded by both parties.

Mr Stroud said the facility will be the first of its size and type in the world, being purely focused on algae for the production of transport fuels. The facility will produce 33 million litres of algae derived transport oil and 33,000 tonnes of biomass per annum with a combined value of over $40 million; and capture 137,000 tonnes of waste carbon dioxide.

The Kerui Group has extensive business interests in China, primarily in the manufacturing of oilfield and petroleum industry equipment, and power generation and building facilities. The Group has offices in 18 countries outside China. The Kerui Group said it expects the Algae.Tec carbon-capture technology will be well received by carbon emitting companies and Government in China.

"China has pledged to reduce the amount of carbon emitted per unit of gross domestic product by 40 per cent by 2020," they said.

As part of the capital raising, Algae.Tec will issue one option for every two new shares. The options will be American options with an exercise price of $0.75 and a maturity date at 31 January 2014. The company will endeavour to have the options listed on the ASX.

Along with the China deal, the funds raised will also be used for the four-fold expansion of Algae.Tec's Atlanta, Georgia based Algae Development & Manufacturing Centre, a biofuels agreement with the European airline Lufthansa, and a biofuels production and carbon capture deal with the Sri Lanka subsidiary of industrial giant Holcim, the world's largest cement and building materials company.

Metals recovery company Intec, which also has a new managing director, raised $1.25 million through a share placement. The company issued 83.333 million shares at 1.5 cents each to a small number of investors, including clients of stockbroker Taylor Collison Ltd.

$487,092 of the placement has been allotted immediately under the ASX's 15 per cent placement capacity rule, and shareholder approval will be sought for the remaining $762,908, including a separate approval for the participation in the placement of $220,000 by director and new managing director Kieran Rodgers.

The placement is for working capital for a zinc blending project in Victoria until the expected return of environmental bonds for electric arc furnace dust later this year; a delay in the expected receipt of a final environmental bond from the Tasmanian EPA; payment of a contractual employee entitlement; and on-going activities.

Mr Rodgers, who was previously the finance director and chief financial officer, has replaced Philip Wood as managing director. Mr Wood resigned as a director as per the terms of his 2010 employment agreement. The board expressed its sincere appreciation for Mr Wood's longstanding service to the company, including as its managing director and chief executive officer since 2001.

Water Resources Group raised a total of $1.85 million through two placements .

$1,354,000 was raised at 8 cents per share in February. Intersuisse Ltd acted as the placing agent with support from Patersons Securities Ltd.

In January it raised $530,000 from professional and sophisticated investors at 6 cents per share. Intersuisse was manager to the placement.

Water Resources Group is commercializing an environmentally friendly desalination technology.

Chief executive, Brian Harcourt, said "We are pleased to have raised these additional funds to further assist with our operational cash flows and financial flexibility in the lead up to first revenues. Preliminary work has commenced for our Cape Verde contract and we look forward to getting this and other projects under way this year."

Enerji was busy raising $0.87 million through a bond conversion to equity and four placements.

However, $0.1 million of the placements was sweat equity issued for the provision of corporate services for the company's OTCQX listing and business and marketing.

The conversion of the bond to equity was valued at $0.45 million.

Enerji raised $81,230 through the issue of shares at 1.2 cents and another $120,000 at 1.3 cents per share. Both placements were to a private investor. Another placement at 1.2 cents per share raised $120,00 but the type of investor was not given. All three placements included listed options with an exercise price of 3 cents expiring 30 June 2015.

All funds raised go towards installation of the company's first Opcon Powerbox at the Carnarvon Power Station, where work to install the unit is underway and expected to finish in late March.

WAMinister for Energy Peter Collier (left) and Enerji non-executive chairman Ian Campbell with the Opcon Powerbox.

During the full year to 31 December 2011, Enerji raised a total of $2,954,437 through the issue of securities.

South Australian geothermal explorer Torrens Energy has appointed Anthony Wooles as a director and raised $586,628 in a placement to AEW Capital Trust, of which Mr Wooles is executive chairman.

AEW Capital is a private investment firm and now holds 12.1 per cent of Torrens.

Torrens said Mr Wooles has significant experience and knowledge in corporate finance and energy sectors including the recent establishment and sale of energy service company PearlStreet Ltd.

The placement was 11,732,568 shares at 5 cents each in two tranches: 10,560,484 shares issued immediately and 1,172,084 shares subject to AGL Energy's decision not to exercise its right to "top up" to maintain its interest in Torrens Energy under its 2008 Subscription Agreement.

Papyrus Australia raised $360,00 through two placements - $200,00 and $160,000 respectively and both at 5 cents per share.

The company is commercializing technology that converts banana tree waste to decorative timber veneer and alternatives to forest products used in paper, packaging, furniture, and construction.

The funds are for working capital to support the establishment of Papyrus Egypt, the company's Yellow Pallet Project, and completion of the construction of its Veneering and Fibre Production Units.

Geothermal energy developer Greenearth Energy raised $241,00 through the issue of shares at 8 cents each and the same number of unlisted incentive options. The shares are from the shortfall in its non- renounceable rights issue completed in November 2011.

Solar tower developer EnviroMission raised $588,499 in two placements. It raised $468,499 through the issue of 13,385,714 shares with an issue price of 3.5 cents. 6,692,857 unlisted options were also issued with an exercise price of 7 cents and an expiry date of 15 September 2014.

Earlier in February, it raised $121,000 of working capital through the issue of 3.4 million shares, also at 3.5 cents each. One free option was issued for every two shares on the same terms as the later placement.

Fund raising among listed companies continues. EcoQuest's shares leapt from 0.6 cents to 2.4 cents on news that it is to raise up to $1.22 million through a placement and rights issue.

Forrest Capital Pty Ltd is to place 115 million shares at 0.5 cents per share. Each share will have a free attaching option with an exercise price of 1 cent by 31 December 2014. The placement is subject to shareholder approval.

Forrest will also underwrite a proposed 1 for 2 rights issue to shareholders at 0.5 cents each and also with free attaching options.

The conditional placement will raise $575,000 and the rights issue will raise $647,500.

A representative of Forrest is likely to join the EcoQuest board.

On a non exclusive basis Forrest will also identify other eco-products and eco-technologies to be acquired by EcoQuest.





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