REG - Clean Power Hydrogen - Operational Update and Proposed Fundraising

Clean Power HydrogenAnnouncement

26/11/2024 07:00

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RNS Number : 5927N  Clean Power Hydrogen  26 November 2024

 

THIS ANNOUNCEMENT, INCLUDING THE APPENDIX AND INFORMATION CONTAINED HEREIN, IS
RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED
STATES, CANADA, JAPAN, AUSTRALIA, NEW ZEALAND, THE REPUBLIC OF SOUTH
AFRICA, THE REPUBLIC OF IRELAND, ANY MEMBER STATE OF THE EEA OR ANY OTHER
JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS
OR REGULATIONS OF THAT JURISDICTION. PLEASE SEE THE IMPORTANT NOTICES AT THE
END OF THIS ANNOUNCEMENT.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND SHALL NOT CONSTITUTE AN
OFFER TO SELL OR ISSUE OR THE SOLICITATION OF AN OFFER TO BUY, SUBSCRIBE FOR
OR OTHERWISE ACQUIRE ANY NEW ORDINARY SHARES OF CPH2 IN THE UNITED
STATES, CANADA, JAPAN, AUSTRALIA, NEW ZEALAND,  THE REPUBLIC OF SOUTH
AFRICA, THE REPUBLIC OF IRELAND, ANY MEMBER STATE OF THE EEA OR ANY OTHER
JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE
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THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED IN ARTICLE 7 OF THE
MARKET ABUSE REGULATION EU NO. 596/2014, AS RETAINED AND APPLICABLE IN
THE UK PURSUANT TO S3 OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("MAR").
UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW
CONSIDERED TO BE IN THE PUBLIC DOMAIN.

26 November
2024

Clean Power Hydrogen plc

("CPH2", the "Company" or the "Group")

 

Operational & Strategic Update and Proposed Fundraising

 

CPH2, the UK-based green hydrogen technology and manufacturing company that
has developed the IP-protected Membrane-Free Electrolyser ("MFE"), is pleased
to provide an update on current operational activities and strategy.

 

Following the announcement of the successful Factory Acceptance Test ("FAT")
of its MFE110 unit in September, which confirmed the first customer acceptance
and validation of the Company's unique scaled electrolyser technology, the
Company is now moving into the next stage of its development and is targeting
the full commercialisation of its flagship MFE220 unit and the generation of
first revenues in 2025.

 

CPH2 currently has contracts for the sale of four MFE220 units, with one unit
to be deployed to Belfast for Northern Ireland Water ("NIW"), two further
units to Fabrum Solutions Limited in New Zealand ("Fabrum") and, as announced
most recently, one unit to Lisheen H2 Energy Park Limited, which trades under
the name Hidrigin, in Ireland ("Hidrigin"). In addition, CPH2 has licence
agreements in place with Fabrum, Hidrigin and Kenera Energy Solutions Limited
("Kenera"), a business unit within leading drilling, engineering and
technology company, KCA Deutag, which enable CPH2 to rapidly scale up to meet
demand for its MFE technology across multiple geographies.

 

The Board is focused on establishing the optimal strategy to enable the
commercialisation of its unique and highly scalable MFE product and is seeking
to implement a business model which builds CPH2's in-house manufacturing
capability alongside the activation of the three existing licensees and which
results in a flexible, capital-light model that prioritises capital efficiency
and sustainable growth to optimise value for shareholders.

 

The Company's short-term activities are aimed at deploying the initial MFE110
unit to NIW and completing the design and optimisation of the MFE220. The
first MFE220 electrolyser will be built for NIW, followed by the Hidrigin unit
and the two units for Fabrum. During the next 18 months the Company also
intends to fully activate its various licensees and build out its commercial
team. These activities are to prepare the Company for increasing its
manufacturing capability in late 2026 as it moves into the scale phase of the
commercialisation pathway.

 

A copy of the Company's latest corporate presentation is available on the
Company's website at www.cph2.com/investors/.

 

Proposed Fundraising

 

In order to fund the implementation of this strategy, the Company is proposing
to raise a minimum of £6m by way of a fundraising (the "Fundraising") of new
ordinary shares in the capital of the Company (the "New Shares") at a proposed
price of 7.5 pence per New Share (the "Issue Price"), which represents a
discount of 20.8 per cent. to the volume weighted average price of the
Company's shares in the 20 trading days prior to 25 November 2024 (being the
last business day prior to this announcement) and a discount of 2 per cent. to
the closing middle market price of 7.65 pence on that date.

 

The Fundraising is expected to be carried out by way of a subscription, a
placing (by way of an accelerated book build process) and a retail offer via
the Bookbuild platform in order to enable the Company's retail shareholder
base to participate and to continue to support its growth strategy (the
"Retail Offer").  Further details of the Fundraising will be announced in due
course.

 

The Company has received expressions of interest from certain existing
shareholders and other investors, including Kenera and a number of the
directors of CPH2, to participate in the Fundraising at the Issue Price.

 

The net proceeds of the Fundraising will be used to fund its working capital
requirements through to the FAT of its first commercial MFE220 unit and,
during that time, also to facilitate the:

·      shipping, installation and commissioning of MFE110 to NIW; and

·      finalisation of MFE220 design.

 

Any additional proceeds raised pursuant to the Fundraising will provide
additional working capital support and further strengthen the balance sheet.

 

Whilst the Company has received non-binding indications of interest, there can
be no certainty at this time that the Fundraising will complete on the
proposed terms or at all. Shareholders should note that, in the event that the
Fundraising is not successful and alternative funding is not made available,
the amount of working capital available to the Company will be severely
limited. There is no certainty that other funding would be available on
suitable terms or at all. Accordingly, in light of the Company's existing cash
position, it would be likely that the Company would have to severely restrict
its costs, impacting its ability to continue its operations during 2025 and to
progress its growth strategy.

 

Jon Duffy, CEO of Clean Power Hydrogen commented:

 

"This operational and strategic update highlights our dedication to delivering
innovative, scalable solutions while maintaining a disciplined, efficient
approach to growth and commercialisation. Deploying the MFE110 to Northern
Ireland Water and advancing the MFE220 design are key steps on our path to
full commercialisation of our technology. The proposed Fundraising will
provide the necessary resources to drive these initiatives forward and support
our sustainable growth ambitions."

 

ENDS

 

For more information, please contact:

 

 Clean Power Hydrogen plc                                via Camarco
 Jon Duffy, Chief Executive Officer
 James Hobson, Chief Financial Officer

 Cavendish Capital Markets Limited - NOMAD & Broker
 Neil McDonald                                           +44 (0)131 220 9771
 Peter Lynch                                             +44 (0)131 220 9772
 Adam Rae                                                +44 (0)131 220 9778

 Camarco PR                                              + 44(0) 20 3757 4980
 Billy Clegg
 Owen Roberts
 Lily Pettifar

 

To find out more, please visit: https://www.cph2.com (https://www.cph2.com)

 

Overview of CPH2

 

CPH2 is the holding company of Clean Power Hydrogen Group Limited which has
almost a decade of dedicated research and product development experience. This
experience has resulted in the creation of simple, safe and sustainable
technology which is designed to deliver a modular solution to the hydrogen
production market in a cost-effective, scalable, reliable and long-lasting
manner. The Group's strategic objective is to deliver the lowest LCOH in the
market in relation to the production of green hydrogen. CPH2 is listed on the
AIM market and trades under the ticker LON:CPH2.

Forward-Looking Statements

This announcement contains forward-looking statements. These statements relate
to the Group's future prospects, developments and business strategies.
Forward-looking statements are identified by their use of terms and phrases
such as "potential", "estimate", "expect", "may", "will" or the negative of
such terms and phrases, variations or comparable expressions, including
references to assumptions. The forward-looking statements in this announcement
are based on current expectations and are subject to risks and uncertainties
that could cause actual results to differ materially from those expressed or
implied by those statements. These forward-looking statements speak only as at
the date of this announcement. No statement in this announcement is intended
to constitute a profit forecast or profit estimate for any period. No
representation or warranty is given as to the completeness or accuracy of the
forward-looking statements contained in this Announcement.  Neither the
Directors nor the Company undertake any obligation to update forward-looking
statements other than as required by the AIM Rules or by the rules of any
other securities regulatory authority, whether as a result of new information,
future events or otherwise.

Market Abuse Regulation

Market soundings, as defined in MAR, were taken in respect of the Fundraising,
with the result that certain persons became aware of inside information, as
permitted by MAR. That inside information is set out in this announcement and
has been disclosed as soon as possible in accordance with paragraph 7 of
article 17 of MAR. Therefore, those persons that received inside information
in a market sounding are no longer in possession of inside information
relating to the Company and its securities.

 

 

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