2 May 2013
CALGARY, May 2, 2013 /CNW/ – (TSX – NRG; OTCQX – ANRGF) – Alter NRG Corp., (“Alter NRG” or the “Corporation”) is pleased to report on its corporate activities and financial results for the three month period ended March 31, 2013.
http://www.digitaljournal.com/pr/1223446
Selected excerpts:
WESTINGHOUSE PLASMA
• Sales of $4.4 million for the first quarter which is an increase over the first quarter of the prior year of 217%. This reflects the emerging business plan supporting the Westinghouse Plasma Technology and revenues include sales income to three facilities under construction or commissioning as well as plasma torch sales to the China market and licensing fees from developers with emerging business plans.
• Executed on approximately 80% cumulatively to date of the $20 million purchase order from Air Products a US based Fortune 500 Company, which has previously announced its intention to build four additional advanced gasification facilities in the United Kingdom in the coming years. On October 23, 2012 Air Products announced it is advancing a second project on adjacent lands in Tees Valley of the same size and configuration as the first project and has negotiated the power purchase agreement with the UK government.
•Wuhan Kaidi (“Kaidi”), who previously ordered engineering and torches, completed construction of its demonstration facility in China for which the Westinghouse Plasma Gasifier was commissioned during the first quarter of 2013. The facility is expected to take 100 tonnes per day of biomass waste and convert it into liquid fuels. Upon successful demonstration (expected in early 2013), Kaidi has more than 100 sites identified to take biomass and convert it into power and liquid fuels.
• Signed an agreement to provide $12 million of Westinghouse Plasma Torches to Beijing Huanyu Guanchuan Plasma Technology Ltd. (“GuanChuan”). During the first quarter of 2013, GuanChuan ordered the first four torches for an approximate $1 million order to be delivered in the second quarter of 2013. GuanChuan is using the torches for their industrial furnace applications related to the steel and iron industry in China which is a promising growth market.
• Finalized scope with SMS Infrastructure (“SMS”) (who has already constructed two hazardous waste facilities utilizing Westinghouse Plasma technology) on two projects which have advanced into the formal regulatory approval phase. These are the more advanced projects within a larger pipeline of projects which SMS is developing and marketing in India and the Middle East. SMS is a licensee of the Westinghouse Plasma Gasification Technology and provides turnkey hazardous waste facilities to the market and has approximately 140 people in their gasification division.
• Supported a hazardous waste demonstration facility in Shanghai China being constructed by GTS Shanghai. We have previously delivered the detailed engineering and torches, however, during the year they ordered additional equipment for their facility which will be delivered in 2013. The facility is under construction and is expected to be commissioned in mid-2013.
• Advanced business development efforts with Waste2Tricity which announced an approximate 250 tonne per day project in England which began with the concept design study. Business development has also advanced in the Thailand market with larger scale 1,000 tonne per day projects. Waste2Tricity has a common shareholder with Alter NRG, Roman Abramovich, and is aggressively pursuing development opportunities including licensing for certain regions.
• Advanced project development with a developer, PGP Terminal a.s. (“PGPT”), which previously purchased site licenses in the Czech Republic and Slovakia for $4.375 million, with 10% being paid up front. The developer has been working for several years on waste-to-energy projects and has a portfolio of projects that it is currently advancing in their home market. They expect to begin engineering on the first facilities in 2013 with the intention of ordering equipment in late 2013 or early 2014.
• Continued due diligence and financing efforts related to the Company’s investment options in current projects, to participate in the annuity cashflows of projects through a partnership structure with Alter NRG as the general partner. Alter NRG has options to invest with key customers, including Air Products, which allow the Corporation to elect on the option after the project receives regulatory approval but without any promoted costs. This is a favourable option for the Corporation as it does not have to deploy the risky development capital but can participate in the project level annuity cashflow after the project has been de-risked.
In addition to the highlights above, customers around the globe continue to advance their business development efforts using the Westinghouse Plasma Gasification Solution. This includes exclusive license agreements for territories that are in advanced negotiations.
CORPORATE
• Announced the closing of a financing with a strategic shareholder, Ervington Investments Limited (“Ervington”), which is a company that has Roman Abramovich, a wealthy Russian businessman, as its ultimate beneficial owner. Ervington has complementary investments in the waste-to-energy space and has the potential to be part of a larger group that will consider participating in waste to energy projects. The financing, led by Ervington, was for 34.2 million shares at a price of $0.325 for a total investment of $11.1 million.
CEO’S MESSAGE
The first quarter of 2013 was about execution. In my previous CEO’s message I talked about how we have hit the tipping point with the world’s largest plasma gasification facility being constructed by Air Products. This is important and now we are 80% complete on our scope of the project. However, execution is equally as important for a Company forging forward with an innovative technology and this quarter we had some strong execution milestones, as follows:
• Delivering the main portion of the 950 tonne per day gasifier to Air Products. This was a major milestone for the Corporation and this large scale vessel is now being shipped to the site.
• Signing an agreement to sell $12 million of torches to China for usage in the steel industry, with the first $1 million being released in Q1. The steel industry is a significant emitter of pollution and our plasma torches provide an efficient and cleaner alternative. This market segment is attractive and has the potential for significant growth.
• Commissioning the gasifier for Kaidi in China. This is another reference facility that takes 100 tonnes per day of biomass waste and uses our gasifier to create syngas. The plant is designed to take the clean syngas produced from the Westinghouse Gasifier and convert it into liquid fuel (diesel). This is a high value end product that can further add to our ability to disrupt the market paradigm in waste-to-energy.
• Closing a financing with a strategic investor to bolster our balance sheet. Market penetration and infrastructure technology sales take time (often more than we would like) and a strong balance sheet shows the market we are strong, and here for the long haul.
Currently, there are three facilities under construction which shows we are penetrating the market. Each of our customers have broad business plans for multiple facilities and are deploying a lot of man hours, and resources on their first projects and the continued business development of their follow-on projects. The successful implementation of the first facilities will pave the road not only for our existing customers with facilities under construction but also for new customers that are watching. Reference facilities are key to executing our market penetration strategy and we have been actively involved in designing, training and managing these customer’s projects to support their success.
Part of the excitement of our product and market penetration capability is the multiple applications for our product. One facility under construction is 950 tonnes per day and turn household waste to electricity in England; another takes 100 tonnes per day of biomass waste and is designed to convert it into liquids fuels; the third takes 50 tonnes per day of hazardous waste and will convert it into electricity. Different feedstocks, different sizes and different outputs – but the same enabling Westinghouse plasma technology. Add this to the existing reference facilities that have also taken hazardous waste (50 different kinds), auto shredder residue, and sewage sludge and have also converted our syngas into ethanol and you have a lot of potential market applications. This leads to the excitement as each new reference facility has broad market implications for a clean and efficient energy conversion in a variety of applications.
Execution also continues related to our opportunities for co-investment into projects that are being developed by capable partners and have strong financial returns. As an innovative and paradigm changing technology, most developers welcome the core technology provider as a project owner. However, we are not the developer – that is a time-consuming and often expensive process best left to larger institutions and specialized local teams. We have options to invest along-side the developer once the projects have achieved their major commercial milestones including regulatory approvals. My history of financing energy projects tells me this is an area where we can add significant shareholder value.
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