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PowerHouse Energy Group / Bidtimes

  • BY: Andrew Hore |
  • POSTED: 03/04/2011 |

PowerHouse Energy Inc is reversing into Aim shell Bidtimes.

There will be a 10-for-one share consolidation prior to the reversal and then 273.8m shares will be issued for PowerHouse. The total costs of the deal are £864,000.

California-based PowerHouse was founded in 2002 and since then it has installed more than 50 on-site combined heat and power systems, including some using fuel cell technology. The focus has changed to turning waste into syngas and using it to generate electricity.

Pyromex has granted PowerHouse a 20-year licence over its high temperature gasification process and equipment knowhow. The licence lasts until 2029 or when the last patent exipires. PowerHouse has the exclusive rights to Pyromex technology in North America, Central America, the surrounding islands and Nigeria. It has non-exclusive licences in some other regions. The technology will be used to produce syngas from waste and use that gas to generate electricity.

Revenues will be generated from equipment sales, service income and by building and operating company-owned plants.

Ross Lyndon-James, who was involved in the Aim flotation of Ocean Power Technologies, will become executive chairman. He will receive an annual fee of £190,000. 

PowerHouse generated revenues of $2.13m in 2009, while the loss was $1.7m including a $600,000 write-down relating to an investment in a grower of Megaflora trees for use as biofuel. The Megaflora investment is completely written-off because the growth of the trees was disappointing.

PowerHouse has agreed to buy a 30% stake in Pyromex in return for $4m. The company has to invest $2.5m before receiving any stake. Of that cash, $1m has been loaned to Pyromex. PowerHouse has also paid $50,000 for an option over a 21% stake in Pyromex. PowerHouse would have to pay $2m for 1.925%, which is exercisable before the end of June. The other 19.075% will cost up to $20m in cash or shares in Bidtimes and has to be bought by June 2012. 

ASX-listed Linc Energy can invest $6m in the Aim-quoted holding company at a 20% discount to the 60 day weighted average share price. The Australian company can also subscribed for $1m worth of shares at 30 cents each within 12 months of the company joining Aim. Linc has also granted PowerHouse rights to use its Fischer-Tropsch process and knowhow in its own projects in return for a 10% stake in Pyromex. Linc has a perpetual, exclusive licence to build and operate Pyromex systems for above ground coal to syngas projects of not more than 1MMcf a day. Italy is excluded and China is non-exclusive. Linc will pay a royalty of 10 cents per barrel of liquid fuels generated.

Aim-quoted AFC Energy has an exclusivity agreement with Linc, which plans to use AFC’s alkaline fuel cell technology in underground coal gasification projects.

At 2.5p a share, before the consolidation, Bidtimes is currently valued at £2.43m. The enlarged group will be readmitted to Aim on 28 April under the name PowerHouse Energy Group. 

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