AFC Energy, the industrial fuel cell company, has announced an equity investment into AFC by Ervington Investments, the ultimate beneficial owner of which is Russian business tycoon Roman Abramovich.
Ervington has subscribed for 32.6m new ordinary shares at 26.6p each, raising £8.27m net of costs. The shares will represent 15% of the enlarged issued share capital of AFC.
The company intends to use the funds to further strengthen its balance sheet and provide the company with additional cash resources to execute its long term growth strategy and invest in its low cost fuel cell technology over the next several years. Following receipt of the funds, AFC Energy's total cash balance will be £11.2m.
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Ian Williamson, Chief Executive of AFC Energy, said: "This investment by Ervington is a ringing endorsement of AFC's innovative technology and its strategy to become a leading hydrogen fuel cell energy supply company for industrial and utility-scale applications. Ervington's support not only enables us to take full advantage of our commercialisation plans expeditiously, but will also provide us with high level access to energy users and potential partners globally."
Under the terms of the subscription agreement, Ervington has entered into a lock-in and orderly market agreement with AFC, meaning it cannot dispose of the new shares within 12 months and for a further 12 months can only dispose of any new shares in such a way so as to maintain an orderly market in the company's shares.
As part of the investment, Ervington has the right to nominate two directors to the board of AFC.
The share price leapt 23% to 36p by 09:00.
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