Powerhouse Energy Group PLC (LON:PHE) has raised £5mln through an oversubscribed placing and subscription that it said will provide the necessary cash resources to reach profitability and implement its wider international growth strategy.
The company, which specialises in technology that generates hydrogen from waste plastic, said it raised the funds through the issue of 160mln new shares at a price of 2.5p each, a 16.7% discount to its closing price on Tuesday.
The shares were placed with an international institutional investor and a small number of private shareholders, including the White Family, the company’s largest shareholder, to raise £4mln. Meanwhile, the firm said another 40mln shares will be issued to its engineering partner, Peel Holdings (IoM) Limited, which is subscribing for £1mln at the issue price.
Powerhouse has also granted a warrant to Peel providing a conditional right to subscribe up to £10.2mln for up to 10% of the company at a 10% premium to the issue price.
The company said it will use the funds to refine technical aspects and assist Peel to deliver the first commercial-scale installation of its DMG technology, which can utilise waste plastic, end-of-life-tyres, and other waste streams to efficiently and economically convert them into syngas from which valuable products such as chemical precursors, hydrogen, electricity and other industrial products may be derived.
The technology is to be deployed at the Protos site, a Peel energy park near Ellesmere Port in England.
Powerhouse also said the funds will allow it to invest in personnel, office and other resources to “capitalise on further UK and international sales and partnership opportunities”.
“We are delighted to have attracted an international institutional fund as an investor and that Peel, already a key commercial partner, has also chosen to engage in this fundraise and demonstrated commitment by taking a warrant over 10% of the company and become a cornerstone investor in Powerhouse. The investment cements the already close relationship between the two companies”, Powerhouse chief executive David Ryan said in a statement.
“We are particularly pleased to have attracted a high-quality institutional investor to our shareholder register. The fact that the fundraising was oversubscribed demonstrates market confidence in our execution strategy. The board is confident this funding will facilitate Powerhouse to complete the first projects, reach profitability and roll out its international growth strategy”, added company chairman Cameron Davies.
Powerhouse shares were up 3% at 3.1p in early trading on Wednesday.