Active Energy Group PLC (LON:AEG) has confirmed that it has consolidated its innovative CoalSwitch joint venture into the company through the issue of shares, while its major shareholder has also lifted its stake in the energy and timber processing firm.
As flagged at the end of last month, long-term supporter Gravendonck Private Foundation has converted US$1.4mln of existing debt in the company into equity, through the issue of 42.4mln shares at 2.65p.
That takes Gravendonck’s holding in Active to 27.27%, while it strengthens the firm’s balance sheet and reduces interest costs by around US$210,000 per annum.
As was also announced on 31 October, AEG’s joint venture with Biomass Energy Enhancements LLC (BEE) – formed specifically to develop the CoalSwitch technology towards commercialisation – is to be consolidated within Active.
BEE shareholders will sell their shares in the company to Active in return for 29.3mln AEG shares.
This share exchange will be completed in three tranches according to the development of CoalSwitch, Active said, with this representing the first tranche of shares.
Trident Limited – which has a 15% stake in the JV and originally introduced Active to the CoalSwitch opportunity – has also been issued with 46.3mln shares at 2.65p in return for its holding.
“The transactions which we have executed today align our major shareholder and the key participants in the development of CoalSwitch with AEG investors,” said Active’s chief executive Richard Spinks.
“I believe that their decision to receive equity in our company is testament to their recognition of the significant upside available via commercialisation of the CoalSwitch technology.”
As a result of the consolidation to bring, the joint venture has been terminated.
Active Energy and its partners has been developing an environmentally-friendly process that cleanses raw biomass by removing salts, minerals and other contaminants that harm the atmosphere and damage power plant furnaces.
It means the fuel can then be burned in coal fired power stations, or alongside coal – removing the need for an expensive conversion.
Shares closed slightly lower at 2.65p on Wednesday.