Lignol Receives $1,150,000 as Final Tranche of $4,515,000 Private Placement and Terminates Shareholders Rights Plan

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VANCOUVER, March 7, 2013 /CNW/ - Lignol Energy Corporation (TSXV: LEC) ("LEC" or the "Company"), a leading technology company in the advanced biofuels and renewable chemicals sector, is pleased to announce that, further to the private placement of $4.5 million which included 7,666,667 subscription receipts (the "Subscription Receipts") issued to Difference Capital Funding Inc. ("DCF") as described in LEC's press release dated December 17, 2012, the subscription proceeds of $1,150,000 previously held in escrow with respect to the Subscription Receipts have been released to the Company. Concurrently, each Subscription Receipt has been converted into one unit of the Company (each a "Unit"), each Unit consisting of one common share of the Company (a "Common Share") and one half of one warrant, each whole warrant entitling the holder to purchase one additional Common Share at a price of $0.20 per Common Share prior to December 17, 2014.

Following this conversion DCF will own approximately 25.6% on a fully diluted basis of the outstanding shares of LEC. As part of the conditions to the release of the escrowed subscription proceeds, the shareholders of the Company, at the special meeting of the shareholders held on March 6, 2013 (the "Meeting"), approved (i) the creation of DCF as a "Control Person" as defined in the TSX Venture Exchange Corporate Finance Manual; and (ii) the waiver of the application of the shareholder rights plan agreement between the Company and Computershare Corporation Trust Company of Canada dated July 8, 2010 (the "Rights Plan") with respect to DCF being the holder of 20% or more of the outstanding Common Shares.

The shareholders of the Company at the Meeting also approved the termination of the Rights Plan and redeemed all outstanding rights issued thereunder effective March 6, 2013. Of shareholders who voted at the meeting in person or by proxy, 98.6% were in favour of terminating the Rights Plan.

Shareholders who wish to receive their nominal payment of $0.0001 per right (the "Redemption Price") must complete the Payment Form which was mailed to shareholders, and return it to Computershare Trust Company of Canada at 2nd Floor, 510 Burrard Street, Vancouver, BC V6C 3B9. The entitlement of any holder will be rounded up to the nearest whole cent and the Company shall not be obligated to make a payment of the Redemption Price to any holders of Rights unless such holder is entitled to receive at least $1.00 in respect of all Rights held by such holder.

About Lignol Energy Corporation ("LEC")

LEC (TSXV: LEC) currently owns 100% of the issued and voting shares of Lignol Innovations Ltd. ("LIL") and is one of the largest shareholders of Australian Renewable Fuels Ltd (ASX: ARW) ("ARW"). LEC also intends to invest in, or otherwise obtain, equity interests in energy related projects which have synergies with the Company and which have the potential to generate short term cash flow.

LIL is a leading technology company in the advanced biofuels and renewable chemicals sector undertaking the development of biorefining technologies for the production of advanced biofuels, including fuel-grade ethanol, and other renewable chemicals from non-food cellulosic biomass feedstocks. LIL's modified solvent based pre-treatment technology facilitates the rapid, high-yield conversion of cellulose to ethanol and the production of value-added biochemical co-products, including high purity HP-LTM lignin. HP-LTM lignin represents a new class of high purity lignin extractives (and their subsequent derivatives) which can be engineered to meet the chemical properties and functional requirements of a range of industrial applications that until now has not been possible with traditional lignin by-products generated from other processes. LIL is executing on its development plan through strategic partnerships to further develop and integrate its core technologies on a commercial scale. For more information please visit Lignol's website at www.lignol.ca.

ARW is the largest biodiesel producer in Australia owning three plants with a total nameplate capacity of 150 million litres per annum. ARW's three plants were built at an aggregate cost of approximately A$150 million. ARW has made significant changes in recent years to become a cost effective producer of high quality biodiesel to address growing biofuel demand in the Australian market. ARW has recently announced proposed transactions to raise a combined A$12.3 million in cash through a placement and an entitlement offer, in which LEC intends to participate. More information on ARW can be found at their website at www.arfuels.com.au.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Caution concerning forward-looking statements:
Certain statements contained in this document may constitute forward-looking information within the meaning of applicable securities laws. Such forward-looking statements or information include, without limitation, statements or information about  the conversion of DCF's units into shares and the future exercise of DCF's warrants, the redemption of the rights pursuant to the Rights Plan, the success of the proposed transaction announced by ARW to raise A$12.3 million and the resulting change to the LEC equity interest in ARW, our ability to complete the acquisition of additional shares of ARW, LEC's ability to invest in, or otherwise obtain, equity interests in energy related projects which have synergies with the Company and which have the potential to generate short term cash flow, LEC's ability to continue as a going concern and to raise additional financing to fund the operations of LEC and LIL, the development status of LIL's fully integrated pilot scale biorefinery in Burnaby, British Columbia, the planning and development of a commercial plant, LIL's ability to complete project deliverables which are funded in part by government agencies, obtaining strategic partnership investments and government funding for initial commercial projects. Often, but not always, forward looking statements or information can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes" or variations of such words and phrases or words and phrases that state or indicate that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved.

Such statements or information reflect LEC's current views with respect to future events and are subject to certain risks, uncertainties and assumptions including, without limitation, our ability to establish the validity of Lignol's technology at the fully integrated biorefinery pilot plant scale, LIL's ability to satisfy the conditions of existing government grants and to obtain new additional grants, our ability to continue to finance our operations and to finance and complete the development of a commercial project, LIL's ability to work with Novozymes to produce cellulosic ethanol at production costs competitive with gasoline and corn ethanol, LIL's ability to develop products and to obtain off-take agreements, LIL's ability to obtain requisite regulatory approvals and its ability to enter into agreements with strategic partners on terms acceptable to us, the inability of LEC to influence the strategy, operations and financial performance of ARW, the reliance on publically available information of ARW in the Company's evaluation of its acquisition of shares in ARW, the potential inability to divest the ARW ordinary shares due to modest trading volumes, the cost of future ARW capital investment, the fluctuation of biodiesel and feedstock prices on ARW, the effect on ARW of changes in government policy relating to the environment, and incentives for renewable fuels, and the ability of ARW to generate short term cash flow and pay dividends. Many factors could cause LEC's actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements or information, including among other things, the technological challenges that remain to be surpassed in obtaining the necessary operating data from LIL's fully integrated biorefinery pilot plant that is required prior to completing the next scale-up of the technology, financial market conditions which will impact our ability to finance our operations and to finance the construction and operation of a commercial plant, the price of gasoline and demand for ethanol, the market pricing and demand for renewable chemicals, risks relating to the protection of LIL's core technology from infringement and those risk factors which are discussed elsewhere in documents that LEC files from time to time with securities regulatory authorities. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements or information prove incorrect, actual results may vary materially from those described herein as intended planned, anticipated, believed, estimated or expected. Except as required by law, the Company expressly disclaims any intention or obligation to update or revise any forward looking statements and information whether as a result of new information, future events or otherwise. All written and oral forward-looking statements and information attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements.

SOURCE: Lignol Energy Corporation

For further information:

Lignol Energy Corporation
David Turner
Chief Financial Officer
Tel: 604-453-1241
Email: dturner@lignol.ca