Advanced Nano to raise $6m in placement

Welshpool-based Advanced Nanotechnology Ltd will raise $6 million through a placement to Singapore-based alternative energy technology developer Energenics Holdings Pte Ltd, formalising their strategic partnership.

ANL will supply its fuel-borne combustion catalyst products to Energenics for five years under the agreement, which supercedes the joint venture proposal mooted in April this year.

Apart from the share issue, ANL will also issue 4.5 million options on a basis of one for every three shares subscribed for at an exercise price of 30.8 cents per share expiring on 30 June 2012.

The full text of a company announcement is pasted below

Advanced Nanotechnology Limited (ASX: ANO) today announced that it has executed the agreements for its strategic partnership with, and placement of Advanced Nano shares to, the Energenics group, a Singapore-based supplier of alternative energy solutions and technologies.

In accordance with the previously announced Letter of Intent, Advanced Nano and Energenics have now formally agreed their strategic relationship. The relationship is now in the form of a mutually exclusive five-year agreement for the supply of fuel-borne combustion catalyst products manufactured by Advanced Nano and sold by Energenics worldwide into the rapidly growing cleanburn fuel markets. The supply agreement, which supercedes the JV proposal previously announced, initially features Cercat™, a nanoparticulate cerium oxide dispersion manufactured by Advanced Nano for use with diesel engine fuels. However, the agreement's scope extends to all metallic oxide
nanoparticulate fuel-borne combustion catalysts for all fuel types.

As a condition of this strategic partnership, Energenics has agreed to subscribe for A$6 million of new Advanced Nano shares at a price of A$0.22 per share in two equal tranches. The first tranche of A$3 million will be issued within twenty eight days (being a total of 13,636,364 ordinary shares issued on the same terms as existing Advanced Nano ordinary shares and as approved at Advanced Nano's June shareholder meeting). The second tranche is expected to take place upon Advanced Nano achieving invoiced sales of 150,000 litres of 2% Cercat (or equivalent) or within 24 months.

Advanced Nano will also issue Energenics with 4,545,455 options for each share tranche (being one option for every three new shares subscribed for) at an exercise price of A$0.308 per share expiring on 30 June 2012.

Paul McCormick, CEO of Advanced Nano, commented "After further discussions with Energenics, it became clear to both parties that the best way to pursue this strategic alliance with Energenics is through an exclusive supply agreement rather than the joint venture company envisaged in the Letter of Intent. The alliance will put Advanced Nano in a strong position to secure a pathway to the world energy markets which is expected to provide an important and growing revenue stream for the Company."

Ronen Hazarika, Managing Director of Energenics, commented "We are delighted to have concluded this strategic partnership with ANO. Energenics will now concentrate on rolling out cerium-oxide fuelborne nanocatalyst technology globally. Our initial response from fleet and oil companies is very encouraging, and we are confident of being able to provide cost-effective solutions for global fuel markets."