TORONTO, Aug. 28, 2012 /CNW/ - Difference Capital Funding Inc. (TSXV: DCF) ("DCF") has acquired a 12.5% stake in Lignol Energy Corporation (TSXV: LEC) ("Lignol"), a leading technology company in the advanced biofuels and renewable chemicals sector, in a transaction previously announced August 14, 2012 by Lignol.
DCF purchased 12,500,000 common shares of Lignol at a price of $0.08 per share for a total investment of $1 million as part of a non-brokered private placement undertaken by Lignol for gross proceeds of $2.46 million (the "Private Placement"). The Private Placement was undertaken by Lignol in connection with the execution of a Share Purchase Agreement to acquire from Wasabi Energy Limited (ASX/AIM: WAS) ("Wasabi"), 275,000,000 ordinary shares of Australian Renewable Fuels Limited (ASX: ARW) ("ARW"), for a total purchase price of CAD$4,265,770.
Lignol will now own an 11% stake in ARW, the largest biodiesel producer in Australia, owning three plants with a total nameplate capacity of 150 million litres per annum, which were built at a cost of approximately A$150 million. A recent restructuring has resulted in two consecutive quarters of positive cash flows, ending June 30, 2012. More information on ARW can be found at their website www.arfuels.com.au.
Ross MacLachlan, Lignol's Chief Executive Officer said: "This transaction is transformational for Lignol, and it brings both Difference Capital and Wasabi as significant shareholders. We are delighted to have them as shareholders to help Lignol increase its profile in the Canadian and international capital markets."
Mike Wekerle, DCF's Chief Executive Officer, added: "This is a terrific deal for us because Lignol and ARW have both had large amounts of capital invested in their companies and the combination of cash flow through the ARW stake and Lignol's patented biorefining technology we feel is what cleantech investors want to see. We have confidence this sets the right course for Lignol to deliver superior results to shareholders."
The investment in Lignol is DCF's fourth transaction since its formation as a growth-oriented merchant bank in the spring of 2012. It recently announced investments in Virgin Gaming, the fast-growing online service that hosts video-game tournaments, leagues and ladders; Appinions, an innovative and fast-growing provider of influencer information for brands, agencies and online publishers; and Gotham Analytics LLC, a technology company specializing in the delivery of systems and solutions that leverages satellite communications for mission critical remote monitoring applications.
DCF acquired the Lignol shares for investment purposes only. DCF may in the future take such actions in respect of its holdings as deemed appropriate in light of the circumstances then existing, including the purchase of additional shares or other securities of Lignol through open market purchases or privately negotiated transactions, or the sale of all or a portion of his holdings in the open market or in privately negotiated transactions to one or more purchasers. The parties relied on the accredited investor exemption available under section 2.3 of National Instrument 45-106 - Prospectus Exempt Distributions. DCF's head office is located at 130 King Street West, Suite 2950, P.O. Box 361, Toronto, Ontario M5X 1E2.
About Difference Capital Funding Inc.
Difference Capital Funding Inc. is a publicly-listed Toronto-based merchant bank focused on growth-oriented investments.
Lignol (TSXV: LEC) is a Canadian company 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. Lignol'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-L™ lignin. HP-L™ 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. Lignol is executing on its development plan through strategic partnerships to further develop and integrate its core technologies on a commercial scale. Lignol also intends to invest in, or otherwise obtain, equity interests in energy related projects which have synergies with its biorefining technology. For more information please visit Lignol's website at www.lignol.ca.
This press release contains forward-looking statements regarding future growth, results of operations, performance, business prospects and opportunities involving DCF. Words such as "expects", "anticipates", "intends", "plans", "believes", "estimates", or similar expressions, are forward-looking statements within the meaning of securities laws. Forward-looking statements include, without limitation, the information concerning possible or assumed future results of operations of DCF, Lignol and AWR. These statements are not historical facts but instead represent only management's and the board's expectations, estimates and projections regarding future events. These statements are not guarantees of future performance and involve known and unknown risks, assumptions, uncertainties, and other factors that may cause actual results or events to differ materially from what is expressed, implied or forecasted in such forward-looking statements. In addition to the factors the Company currently believes to be material such as, but not limited to, the ability to secure additional financings, the ability to close on future investments, the ability of DCF to achieve its investment objectives, its dependence on the efforts of management, risks associated with fluctuations in net asset value and valuation of DCF's portfolio, its ability to operate on a profitable basis, changes in interest rates, evaluation of its provision for income and related taxes, and other factors, such as general, economic and business conditions and opportunities available to or pursued by DCF, not currently viewed as material could cause actual results to differ materially from those described in the forward-looking statements. Although DCF has attempted to identify important risks and factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors and risks that cause actions, events or results not to be anticipated, estimated or intended. Accordingly, shareholders should not place any undue reliance on forward-looking statements as such information may not be appropriate for other purposes. DCF does not undertake any obligation to update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this press release except as required by applicable law.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) has in any way passed upon the merits of the proposed transactions and neither of the foregoing entities has approved or disapproved of the contents of this press release.
SOURCE: Difference Capital Funding Inc.
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Difference Capital Funding Inc.