27/02/2008 - 11:08

Eden Energy spins off geothermal assets into IPO

27/02/2008 - 11:08

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Perth-based Eden Energy Ltd is planning to transfer its Australian geothermal assets to subsidiary company, Terratherma Ltd, ahead of a potential $20 million initial public offer.

Eden Energy spins off geothermal assets into IPO

Perth-based Eden Energy Ltd is planning to transfer its Australian geothermal assets to subsidiary company, Terratherma Ltd, ahead of a potential $20 million initial public offer.

Eden said Terratherma would seek an Australian Securities Exchange listing as soon as stock market conditions permit, subject to obtaining any necessary shareholder approval if required by the ASX.

It is proposed that Eden will initially hold shares having a value of approximately $15 million (i.e. 75 million shares at a valuation of 20 cents each), together with a similar number of five year 20 cent options, in the wholly owned subsidiary.

Terratherma will then proceed with an IPO anticipated to be between $12-20 million.

It is proposed that a priority allocation be made available to shareholders and option holders in both Tasman Resources NL and Eden Energy Ltd to take up shares in the Terratherma IPO.

As a result, Eden would retain a majority shareholding in Terratherma.

Where appropriate, Eden and Terratherma may collaborate on renewable energy projects using geothermal power generated by Terratherma to produce hydrogen which could be stored and transported to market using Eden's hydrogen technology.

In other news, Eden has reached a preliminary agreement with its joint venture partner in Wales to transfer 100 per cent of the entire South Wales project, a South Australian natural gas project licence and a modest natural gas resource near Chester in the UK, together with a small drilling rig, both owned by Eden's Welsh joint venture partner, into a new joint venture company, ahead of an Alternative Investment Market listing.

Eden's gas assets consist of a 50 per cent farm-in interest in 430 square kilometres of coalbed methane (CBM) and conventional gas licences in South Wales in the UK, which are currently being drilled to evaluate their CBM potential.

Eden would hold 45 per cent of the JV company's issued shares and would also contribute ongoing working capital of £1.0 million. If required by the ASX listing rules, this agreement will be subject to approval by Eden shareholders.

It is proposed that this JV company would itself look for a joint venture for the South Wales CBM Project from a major international gas or petroleum company, and would also seek to list on the AIM in London.

To the extent that Eden may have the right to nominate who can subscribe for shares in the AIM listing of the JV company after meeting the requirements of any underwriter and our joint venture partner, Eden's shareholders at that time will be afforded a priority entitlement to apply for these shares.

This process is expected to occur over the next six to twelve months, depending upon stock market conditions.

As a result of the proposed changes, Eden said it would retain a significant shareholding in two strategic, world-class, listed, alternative energy companies.

Eden in addition, will then have the ability to focus 100 per cent of its energy and resources to fully developing its hydrogen technologies, particularly into the huge emerging Indian clean fuel market where the company has already secured strategic alliances and development agreements with Indian engineering, energy, marketing, manufacturing and distribution conglomerates.

The company anticipates that, subject to market conditions, and any necessary ASX required shareholder approval being obtained, Eden's full restructuring program should be completed sometime during the second half of calendar 2008.

Eden shares remained flat at 36 cents each at 13:13 AEDT.

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