TIDMHUI
RNS Number : 3622D
Hydrogen Utopia International PLC
21 June 2023
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21 June 2023
Hydrogen Utopia International PLC
(the "Company" or "HUI")
Proposed Option and Future Funding
Hydrogen Utopia International PLC, a company specialising in
turning non-recyclable mixed waste plastic into hydrogen and other
carbon-free fuels, new materials or distributed renewable heat ,
announces that the Company has signed conditional heads of terms ("
HoTs ") to acquire a substantial minority stake in Carbon Capture
and Sequestration Limited (" CCS") , a company which it is
anticipated will generate substantial future cashflows for its
shareholders and which HUI would utilise in developing its pipeline
of waste plastic to hydrogen plants.
HUI has been actively evaluating opportunities to realise its
mission to develop pioneering non-recyclable plastic to hydrogen
technology with the aim of rolling out plants in Europe and beyond.
The cashflows anticipated to be generated by CCS and which would
flow to HUI following acquisition, based upon CCS projections,
would provide HUI with a stream of positive working capital to fund
its operations and the roll-out of projects.
On 31 May 2023, CCS agreed to acquire 95% of a company, licensed
and operating as a medical cannabis cultivator incorporated in and
with operations in North Macedonia (" Medical Cannabis Cultivator
"). The total consideration payable for the Medical Cannabis
Cultivator by CCS is EUR9.5m, payable in instalments of between
EUR1m - EUR2m on agreed dates between June 2023 and December
2029.
CCS is currently wholly owned by Howard White, an executive
director of HUI and a 3.97% shareholder. Under the HoTs, which are
subject to final contract and a number of conditions and regulatory
approvals, HUI has agreed with CCS, that it will provide a loan of
GBP500,000 to CCS which CCS will use towards the payment of the
first instalment of the purchase price for the share capital of the
Medical Cannabis Cultivator (" Loan "). Under the HoTs, Howard
White has agreed, subject to final contract, to grant HUI an
option, to acquire 49% of the issued share capital of CCS in return
for the issue of 49 million ordinary shares of GBP0.01 each in HUI
(the " Option "). The Option is exercisable at any time in the
period ending 31 October 2024.
Under the HoTs, it has been agreed that the Loan will be
repayable on demand if HUI decides not to exercise the Option, the
Option is not granted or is terminated or lapses. It has also been
agreed that exercise of the Option is conditional, among others, on
HUI being satisfied with the results of legal, financial, tax,
regulatory and commercial due diligence concerning the Medical
Cannabis Cultivator and CCS.
At the point at which it is anticipated that HUI would exercise
the Option, it is currently expected that the Medical Cannabis
Cultivator will be profit generating and will pay dividends to CCS
to help to fund any remaining payment instalments due in relation
to the acquisition of the Medical Cannabis Cultivator and to
support HUI's ongoing and future operations.
The Medical Cannabis Cultivator has the opportunity to acquire
land adjacent to the Medical Cannabis Cultivator which could be
used to site an HUI plant from which the Medical Cannabis
Cultivator could become an offtaker for electricity. There is also
the possibility that an HUI plant could process cannabis residue
biomass.
Should HUI exercise the Option, the acquisition of 49% of CCS
would represent a material related party transaction due to Howard
White's current ownership of it. This announcement is made under
and in compliance with Disclosure Guidance and Transparency Rule
7.3.8.
HUI will keep the market updated on the progress of the proposed
transaction.
Aleksandra Binkowska, Chief Executive Officer of HUI,
commented:
"We are operating in difficult times that only the strongest
will survive. I believe this option to acquire a major stake in the
CCS business will give us access to much needed cashflow. Thanks to
our Director, Mr. Howard White, and his belief in our technology,
this deal should help HUI move forward with our goal of building
the first plastic to hydrogen facility."
For further information please contact:
Hydrogen Utopia International PLC
Aleksandra Binkowska/Guy Peters
+44 20 3811 8770
Alfred Henry Corporate Finance Limited (LSE Corporate
Adviser)
Nick Michaels
+44 20 3772 0021
Novum Securities Limited (Broker)
Jon Belliss/Colin Rowbury
+44 20 7399 9400
About Hydrogen Utopia International PLC
HUI aims to become one of the leading new European companies
specialising in turning non-recyclable mixed waste plastic into
hydrogen and other carbon-free fuels, new materials or distributed
renewable heat.
A HUI facility uses non-recyclable mixed waste plastic as
feedstock and turns it into syngas from which new products and
energy can be produced. HUI anticipates that its revenues will be
derived from a variety of sources, dependent upon location and
configuration of the HUI facilities, including the sale of syngas,
hydrogen and other gases, electricity and heat sales, and the
payment to it of fees for a given quantity of non-recyclable mixed
waste plastic received at a HUI facility.
HUI will target areas where there is significant private sector
interest or potential, financial backing is accessible and or where
substantial EU and/or government funded sources of grants and loans
are or may be available. The global increase in fossil fuel-based
energy prices reinforces the need for alternative, price
competitive energy sources, which HUI's business model can
provide.
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END
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June 21, 2023 02:00 ET (06:00 GMT)
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