REG-Powerhouse Enrgy Grp: Placing and issue of equity

Powerhouse EnergyAnnouncement

14/01/2021 07:05

Powerhouse Energy Group plc

Strategic Placing to raise £10 million

Powerhouse Energy Group plc (AIM: PHE) ("Powerhouse" or the "Company"), the
sustainable hydrogen company pioneering hydrogen production from waste
plastic, is pleased to announce it has raised £10 million, before expenses,
by way of a Placing at 5.5p per share ("Issue Price") (the “Placing” or
“Fundraising”). The Placing was arranged by Turner Pope Investments Ltd
(TPI) and was oversubscribed.

The Directors have undertaken the Fundraising to provide funds that they
believe will expedite signifcantly financial close of the funding of the first
commercial scale DMG installation utilising the Company’s technology, which
is targetted to be reached during the first quarter of 2021. The Directors’
view is that completion of this first reference site will be extremely
commercially and strategically important to the Company, not least as a
springboard for overseas sales and marketing.

A total of 181,818,182 new Ordinary Shares of 0.5p in the capital of the
Company ("Ordinary Shares") have been placed at the Issue Price ("Placing
Shares") with an institutional investor and a small number of Turner Pope’s
private clients, as well as the White Family (the Company's largest
shareholder), raising £10 million, before expenses.

Related Party Transaction

The White Family is a long-term supporter of the Company and is investing
approximately £2.6 million in the Fundraising. The participation by the White
Family is considered a related party transaction under the AIM rules as the
White Family (constituting Howard White, Ben White, Josh White and Serena Eden
Reyes-White) currently holds 26.05% percent of the share capital. Following
the Fundraising, the White Family will hold 1,015,045,935 Ordinary Shares
representing 26.05% held by the individual White Family members as follows:

Josh White – 377,746,610 Ordinary Shares

Ben White – 247,775,210 Ordinary Shares

Serena White-Reyes – 211,459,086 Ordinary Shares

Howard White – 178,065,029 Ordinary Shares

The Directors of the Company, having consulted with WH Ireland, the
Company’s Nominated Adviser, consider the terms of this transaction to be
fair and reasonable insofar as shareholders are concerned.

Use of funds

The Company will use the net funds from the Fundraising to advance the project
procurement and delivery of long lead items before the formal financial close
of the first commercial scale DMG installation , thereby protecting the
targeted timeline for the Company, and advancing the completion of the
Company’s DMG technology. This will allow the Company to complete
negotiations rapidly for the Special Project Vehicle (“SPV”) to be
established to deliver the Protos plant. Powerhouse will apply the net funds
from the Fundraising to invest alongside Peel NRE Environmental Limited. By
providing investment for this SPV, the Company believes that financial close
will be significantly expedited.

This investment in the Protos SPV will give the Company access to extra
revenue via participation at project level on the first commercial deployment,
rather than simply as licensor of the DMG technology, and will allow
Powerhouse to significantly advance its overall business plan. Importantly,
commissioning the first commercial unit will provide a reference site for
potential overseas customers and partners. It will also provide the Company
with greater beneficial technical exposure in the project delivery phase.

The Directors consider that these steps are beneficial for the Company's
future and are likely to bring forward the date on which licence fee income,
which is expected to constitute the principal portion of the Company's future
revenue, will start to be received.

Commenting, Tim Yeo, Executive Chairman of Powerhouse, said:

"This is a very exciting step forward and a great start to 2021. It
demonstrates how our Company is getting down to business. In addition the
Warrant granted to Peel Holdings (IoM) Limited on 9 September 2020 ("Peel
Warrant") is exercisable for a period of six months from the date when
financial close is reached on Protos.

“The exercise of the Peel Warrant would bring a further £10.2 million of
cash into Powerhouse. Together with the proceeds of this Fundraising, the
exercise of the Peel Warrant would place our Company on a very secure
financial footing and facilitate the deployment of our technology
internationally, helping to accelerate a clean energy transition and provide a
solution to non-recylable plastic."

David Ryan, CEO of Powerhouse, said:

“My overriding priority is to bring Powerhouse’s first project to
operation soonest. The completed plant would enable future customers worldwide
to see the DMG technology delivering the reality of waste plastic regenerated
to hydrogen, realising the predicted technology environmental and commercial
benefits. This investment will allow Powerhouse and Peel to deliver this
reality sooner and I consider it as an obvious step for the Company to make in
these challenging times.”

Admission to trading on AIM

Further to the Fundraising, the Company is issuing 181,818,182 Ordinary
Shares. Application will be made for the admission of 181,818,182 Ordinary
Shares to trading on AIM (“Admission”) and it is expected that this will
occur on or around 21 January 2021. These shares will rank pari passu in all
respects with the Company's existing issued Ordinary Shares. 

Subsequent to the issue of Ordinary Shares, the Company will have
3,896,918,875 Ordinary Shares in issue with voting rights. Powerhouse has no
shares in Treasury, therefore this figure may be used by shareholders, from
Admission, as the denominator for the calculations by which they will
determine if they are required to notify their interest in, or a change in
their interest in, the share capital of the Company under the FCA's Disclosure
and Transparency Rules.

Broker Warrants 

TPI has been issued with 9,090,910 warrants to subscribe for new Ordinary
Shares at the Issue Price, exercisable for a period of three years from
Admission.

ENDS

For more information, contact:

 Powerhouse Energy Group plc                   Tel: +44 (0) 203 368 6399  
 Tim Yeo, Executive Chairman                                              
                                                                          
 WH Ireland Limited (Nominated Adviser)        Tel: +44 (0) 207 220 1666  
 James Joyce/ Lydia Zychowska                                             
                                                                          
 Turner Pope Investments Ltd (Joint Broker)    Tel: +44 (0) 203 657 0050  
 Andrew Thacker                                                           
                                                                          
 SisterSmith PR (media enquiries) Becca Smith  Mob: +44 (0) 7766522305    

Notes for editors:

About Powerhouse Energy Group plc

Powerhouse, the sustainable hydrogen company, has developed a proprietary
process technology – Distributed Modular Generation (DMG®) - 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. Powerhouse's technology is one of the
world's first proven, distributed, modular, hydrogen from waste (HfW)
process. 

The Powerhouse DMG® process can generate up to 2 tonnes of road-fuel quality
hydrogen and more than 58MWh of exportable electricity per day. 

Powerhouse's process produces low levels of safe residues and requires a small
operating footprint, making it suitable for deployment at enterprise and
community level. As announced on 11th February 2020 under its Supplemental
Agreement with Peel Environmental, Powerhouse will receive an annual license
fee of GBP500,000 in respect of each project which is commissioned. 

Powerhouse is quoted on the London Stock Exchange's AIM Market under the
ticker: PHE and is incorporated in the United Kingdom. 

 For more information see www.powerhouseenergy.net



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