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Last updated on April 24, 2014 at 21:24 EDT

Lignol Energy Corporation Increases its Equity Stake in Australian Renewable Fuels Limited

February 13, 2013

VANCOUVER, Feb. 12, 2013 /CNW/ - Lignol Energy Corporation (TSXV: LEC) (“LEC” or “the Company”), a
leading technology company in the advanced biofuels and renewable
chemicals sector, today announced its participation in a Private
Placement and Rights Offering financing undertaken by  Australian
Renewable Fuels Limited (ASX: ARW) which will result in LEC becoming
one of the largest shareholders in ARW.

On February 7, 2103, ARW announced that its proposed takeover bid for
all of the outstanding shares of Wentworth Holdings Limited (ASX: WWM)
(“Wentworth”) is expected lapse on February 15, 2013.  ARW announced it
had instead proposed an alternative capital raising mechanism to raise
A$12.3 million at A$0.007 per share, comprising an immediate private
placement of A$4.27 million (the “ARW Placement”) and an underwritten
rights offering of A$8 million to ARW shareholders at A$0.007 per share
with the ability of shareholders to apply for oversubscriptions (the
“ARW Entitlement Offer”).

The ARW Placement of A$4.27 million successfully closed on February 12,
2013 and the ARW Entitlement Offer is expected to close on March 5,
2013. Through these transactions, LEC intends to make a further
investment in ARW of approximately A$2.67 million and acquire a further
381,660,715 million ordinary shares in ARW as follows:


          (i)    178,571,429 ordinary shares were acquired through the ARW
                 Placement; and 

          (ii)   203,089,286 ordinary shares are expected to be acquired
                 through LEC's participation rights in the ARW Entitlement
                 Offer.

Upon completion of these two transactions, LEC expects to hold a total
of 744,660,715 ordinary shares of ARW, or approximately 17.75% percent of ARW.

Furthermore, in connection with the ARW Entitlement Offer, Wentworth and
Thorney Holding Pty Ltd. (“Thorney”) have agreed to underwrite any
shortfall under the ARW Entitlement Offer.  Subject to the completion
of definitive documentation, LEC has committed to participate in the
underwriting obligation with Wentworth and Thorney up to a maximum of
A$1.75 million. Should the ARW Entitlement Offer not be fully
subscribed, then LEC will have an obligation to acquire further shares
of ARW.

The above transactions will be funded by the Company’s existing cash and
by a proposed line of credit of C$5 million to be provided by one of
LEC’s major shareholders, Difference Capital Funding Inc. (“DCF”).  It
is currently proposed that DCF will provide LEC with a line of credit
bearing interest at 8% per annum on the drawn amount. The term of the
credit facility will be the earlier of one year or until completion of
a further equity financing.  Funds drawn on this facility will be
secured on a sole recourse basis against all of the ARW ordinary shares
owned by LEC.

About Lignol Energy Corporation (“LEC”)

LEC (TSXV: LEC) owns 100% of the issued and voting shares of Lignol
Innovations Ltd. (“LIL”) and is one of the largest shareholders of
Australian Renewable Fuels Ltd (ASX: ARW). LEC also intends to invest
in, or otherwise obtain, equity interests in energy related projects
which have synergies with its biorefining technology.

LIL is a leading technology company in the advanced biofuels and
renewable chemicals sector undertaking the development of biorefining
technologies for the production of advanced biofuels, including
fuel-grade ethanol, and other renewable chemicals from non-food
cellulosic biomass feedstocks. LIL’s modified solvent based
pre-treatment technology facilitates the rapid, high-yield conversion
of cellulose to ethanol and the production of value-added biochemical
co-products, including high purity HP-L(TM) lignins. HP-L(TM) lignin represents a new class of high purity lignin extractives (and
their subsequent derivatives) which can be engineered to meet the
chemical properties and functional requirements of a range of
industrial applications that until now has not been possible with
traditional lignin by-products generated from other processes. LIL is
executing on its development plan through strategic partnerships to
further develop and integrate its core technologies on a commercial
scale. For more information please visit Lignol’s website at www.lignol.ca.

ARW is the largest biodiesel producer in Australia owning three plants
with a total nameplate capacity of 150 million litres per annum. ARW’s
three plants were built at an aggregate cost of approximately A$150
million. ARW has made significant changes in recent years to become a
cost effective producer of high quality biodiesel to address growing
biofuel demand in the Australian market. ARW has recently announced
proposed transactions to raise a combined A$12.3 million in cash
through a placement and an entitlement offer.  More information on ARW
can be found at their website; www.arfuels.com.au

Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.

Caution concerning forward-looking statements:

Certain statements contained in this document may constitute
forward-looking information within the meaning of applicable securities
laws. Such forward-looking statements or information include, without
limitation, statements or information about LEC’s ability to
participate in and ARW’s ability to close on its planned financing, the
availability of a sufficient number of undersubscriptions to allow LEC
to subscribe for the oversubscriptions described above and LEC’s
ability to finance such acquisitions of shares of ARW using funds to be
made available by Difference Capital, LEC’s and Difference Capital’s
ability to agree to the terms of a line of credit prior to the closing
of the ARW Entitlement Offer,  the Company’s plans with respect to its
investment in ARW,  the Company’s ability to continue as a going
concern and to raise additional financing to fund the operations of
LEC, LIL, and its proposed investments in ARW, the development status
of LIL’s fully integrated pilot scale biorefinery in Burnaby, British
Columbia, the planning and development of a commercial plant, LIL’s
ability to complete project deliverables which are funded in part by
government agencies, obtaining strategic partnership investments and
government funding for initial commercial projects. Often, but not
always, forward looking statements or information can be identified by
the use of words such as “plans”, “expects” or “does not expect”, “is
expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”,
“anticipates” or “does not anticipate”, or “believes” or variations of
such words and phrases or words and phrases that state or indicate that
certain actions, events or results “may”, “could”, “would”, “might” or
“will” be taken, occur or be achieved.

Such statements or information reflect LEC’s current views with respect
to future events and are subject to certain risks, uncertainties and
assumptions including, without limitation, LEC’s ability to raise
additional capital to fund the investments in ARW, and LEC’s and LIL’s
working capital, our ability to establish the validity of LIL’s
technology at the fully integrated biorefinery pilot plant scale, LIL’s
ability to satisfy the conditions of existing government grants and to
obtain new additional grants, our ability to continue to finance our
operations and to finance and complete the development of a commercial
project, LIL’s ability to work with Novozymes to produce cellulosic
ethanol at production costs competitive with gasoline and corn ethanol,
LIL’s ability to develop products and to obtain off-take agreements,
our ability to obtain requisite regulatory approvals and our ability to
enter into agreements with strategic partners on terms acceptable to
us, the inability to influence the strategy, operations and financial
performance of ARW, the reliance on publicly available information of
ARW in the Company’s evaluation of its acquisition of shares in ARW,
the potential inability to divest the ARW ordinary shares due to modest
trading volumes, the cost of future ARW capital investment, the
fluctuation of biodiesel and feedstock prices on ARW, the effect on ARW
of changes in government policy relating to the environment, and
incentives for renewable fuels. Many factors could cause LEC’s actual
results, performance or achievements to be materially different from
any future results, performance or achievements that may be expressed
or implied by such forward-looking statements or information, including
among other things, the technological challenges that remain to be
surpassed in obtaining the necessary operating data from Lignol’s fully
integrated biorefinery pilot plant that is required prior to completing
the next scale-up of the technology, financial market conditions which
will impact our ability to finance our operations and to finance the
construction and operation of a commercial plant, the price of gasoline
and demand for ethanol, the market pricing and demand for renewable
chemicals, risks relating to the protection of Lignol’s core technology
from infringement and those risk factors which are discussed elsewhere
in documents that LEC files from time to time with securities
regulatory authorities. Should one or more of these risks or
uncertainties materialize, or should assumptions underlying the
forward-looking statements or information prove incorrect, actual
results may vary materially from those described herein as intended
planned, anticipated, believed, estimated or expected. Except as
required by law, the Company expressly disclaims any intention or
obligation to update or revise any forward looking statements and
information whether as a result of new information, future events or
otherwise. All written and oral forward-looking statements and
information attributable to us or persons acting on our behalf are
expressly qualified in their entirety by the foregoing cautionary
statements.

SOURCE Lignol Energy Corporation


Source: PR Newswire