Alkaline fuel cell developer AFC Energy (LON:AFC) has raised £3.95 million in a share placing priced at 40p per share. The move was heavily supported by AFC Energy’s industry partner, ASX-listed Linc Energy (ASX: LNC), which has increased its stake in the business to 12% from 9.67%. Linc has now been granted a right of first refusal in the territories it operates in, relating to all applications for a combination of AFC Energy’s fuel cell technology with hydrogen derived from coal.
The success of the fundraising was muted by news that AFC Energy’s managing director, Edward Wilson, has resigned due to differences in opinion regarding the strategic direction of the company. Wilson was hired as director of manufacturing in September 2010 and later promoted to MD in February this year. His appointment saw previous CEO Ian Balchin move to deputy chairman. AFC Energy did not elaborate on the situation but said it was now looking for a CEO with international experience in the energy sector to lead the company through the next phase of its development and commercialisation.
AFC Energy has earmarked the new funding, which was raised at a slight premium to Wednesday’s share price, to increase the testing of its commercial fuel cell systems including the expansion of operating premises. The cash is also expected to provide working capital well in to 2013. AFC Energy currently has a cash balance of approximately £3.6 million. The AFC Energy share price rose to 48p yesterday but this morning fell back by 3.5p to 44.5p.
The company’s relationship with Linc Energy dates back to December 2009 when the two sides agreed a deal to use an AFC Energy fuel cell system at Linc’s underground coal gasification (UCG) demonstration facility in Chinchilla, Australia. Hydrogen produced from Linc’s UCG process is an ideal feedstock for AFC Energy's fuel cell systems. The system was successfully deployed last June.
Ian Balchin said: “We are delighted that Linc Energy and some of our other substantial shareholders have demonstrated their confidence in the company by making this further investment.”
Separately, the company said it remained on track to deliver its commercial Beta system to drugs giant AkzoNobel once a hazard and operability study (HAZOP) to permit its operation at the AkzoNobel site is complete. AkzoNobel was AFC Energy's first major partner. The company wants to use AFC Energy’s fuel cells to generate electricity from surplus hydrogen at its chlor-alkali sites. Trials of the Alpha system already been completed.