Powerhouse Energy Group PLC (LON:PHE) Chief Executive Officer Keith Allaun caught up with DirectorsTalk for an exclusive interview to discuss what their £2.5 million fund raise will be used for, Hillgrove’s support for the company and what we can expect from Powerhouse in the coming weeks and months
Q1: You’ve announced today a £2.5 million fund raise this morning, can you explain what these funds are being used for?
A1: Absolutely, I have to say that truly this fund raise is probably one of the most significant events in the history of Powerhouse Energy, frankly, since the redevelopment of the G3 UJHT gasifier. What this fundraise allows us to do is to pay off the convertible note that was been held by Hillgrove, Hillgrove has been a strategic investor in the company for many years, 6/8 years, and effectively came in and rescued the company 4 years ago, when it was about to slide off the edge. Every shareholder should hold a debt of gratitude to Hillgrove for the contribution they’ve made, allowing the company to not only stay afloat but keep moving forward in a positive manner and allowing us to develop the G3 UHT technology. That said, what Hillgrove held was a note that was convertible at .5p, they held a note of somewhere in the neighbourhood of £3.4 million which had been dulled out over the previous 4 years and additionally, they held a debenture over all of the PHE assets.
So, by virtue of this fund raise, we’re now able to pay down the note, pay off the note effectively, we’re making a payment of £2 million to Hillgrove in cash and then we’re converting the remainder of the note, the remainder of the approximately £1.4 million debt into share capital at .5p which was the level at which the note was held. What this does, what this truly does, is it unlocks the true potential of Powerhouse Energy Group PLC and it unlocks the value of the shares in the marketplace, we no longer have this spector in the background of this convertible note, we no longer have the anchor of a .5p potential conversion at some point down the road. I’ve always sensed that investors had the feeling that they’re waiting for the other shoe to drop and now that doesn’t exist, now they understand that we’re free to run our race and to compete on an open playing field with, in our opinion, the most advantageous technology possible in the creation of distributed electricity hydrogen and the elimination of the waste challenges that our world is currently facing.
Q2: Now, Hillgrove will become a significant shareholder in the company following the conversion of their note, are they supportive of your plans going forward and can you tell us about other investors who participated?
A2: The fact is that Hillgrove has been and will continue to be a significant influence and in fact a potentially driving influence on the outcomes for the company. Now, Hillgrove has voluntarily signed into a 12 month lock up agreement for their shares so they won’t be trading any of these shares for the next 12 months which I think is a very significant contribution on their side. Effectively what they’re saying is that it’s a vote of confidence that the company is going to be in great stead a year from now and at that point they might start taking some profit, I don’t know but what I do know is that Hillgrove have a been a friend to the company, will continue to be a friend to the company and has made a significant contribution.
So, the other significant investors that have joined, we had announced a few weeks ago, that Yady Worldwide, who is a principal investor in Waste2Tricity and in AFC Energy, we raised £250,000 from them several weeks ago. They’ve committed to putting £500,000 additional into this raise and really more than doubling down their commitment to Powerhouse Energy and our ability to create distributed electricity, distributed hydrogen and deliver on an advanced technology that is dissimilar to almost anything in the marketplace.
So, the other thing that I think is really significant to really pay some attention to is the fact that this was a £2.5 million raise and we have broadened our shareholder base, we’ve been able to get the story out to a much larger number of shareholders in working both with Smaller Company Capital and with Turner Pope and their clients working with known family offices, known high net worth individuals and this has started to put us on the radar of institutions if you will. So, we’re now in a position where when we go back to the market in the future we’re going to be talking to a much more sophisticated level of investor, a much broader institutional base and we’re going to have the fundamental corporate support necessary to meet the criteria for investment by institutions. That’s when we can really begin to unlock the significant value that exists within Powerhouse Energy Group.
Q3: Powerhouse Energy Group PLC seems to be very well placed at the moment and you’ve said that your G3 UHT demonstration unit is expected to arrive in the UK next month, can you tell us a bit more about what we can expect from Powerhouse in the coming weeks and months?
A3: We’re quite excited, the fact is we’ve got noticed, that the G3 has made it through its first transhipment port, it’s on its way to its second and last transhipment port prior to its being delivered to the UK. Now, we’re confident within the next several weeks we’ll be able to announce exactly where we’re going to be siting that unit and we’re confident that pursuant to our announcement a couple of weeks ago, that we’re going to be conclude a positive deal with Peel Environment for participating in the Protos Energy Park which we believe is going to be the definitive, most highly visible energy park, a waste energy ecosystem, that will exist in the world.
So, we feel like we’ve had a number of opportunities in front of us, the demand worldwide has picked up dramatically, the calls that we’re fielding and the responses that our engineers are providing for interest in our systems is significant and we are finally, again, in a position to start taking advantage of that with the technology that we have. I can’t stress enough what significant advances would make in the redesign, in the recreation of this ultra-high temperature gasifier from first principles. The G3 UHT system allows us to handle any feedstock, it allows us to operate on used tyres, it allows us to operate on industrial or hazardous waste, it allows us to operate on municipal waste and we can operate on biomass. So, the opportunities that we have throughout a number of sectors, with a small footprint, easily deployable, modular design is going to allow us to expand our horizons dramatically and as we’d begun to expand our horizons with ‘boots on the ground’ through our relationship with Waste2Tricity here in the UK. Relationships like that will continue to expand worldwide and we’re very confident in the future.