Wednesday, January 8, 2014

News: £6m deal for ITI Energy

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Warwick Energy has agreed a deal with the administrators to buy ITI Energy Ltd, a pioneering company that has been developing advanced gasification technology on the Advanced Manufacturing (AMP) in Rotherham.

ITI Energy was formed to commercialise an advanced gasification technology developed over ten years of research at Newcastle University.

The company manufactures a compact and highly efficient thermal destruction technology that allows the transformation of difficult-to-process feedstocks such as municipal solid waste and sewage sludge into a gas clean enough to fuel an internal combustion engine.

Michael Wellard and Roderick Weston of Mazars LLP were appointed as joint administrators in November.

The firm's major project was at Warwick Energy's Nottingham development that included a single gasifier to supply 1.7 MWe/hr Nett to the grid and process 12,000 tones of refuse-derived fuel (RDF), expanding to five gasifiers in later phases.

A report by the administrators shows that problems occurred when it became apparent that, due to technical issues, the gasifier that was being completed for phase one of the project would not comply with the terms of the contract without an additional investment of approximately £2m.

ITI had previously secured millions through fundraising deals with investors but terms could not be agreed for the additional funding required.

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A number of staff working on the contract were made redundant and the registered office was changed from the AMP Technology Centre as the administrators looked to realise the value of ITI's intellectual property. Bids came forward from Warwick Energy and the existing creditors, who planned to buy the business and assets through a new company.

Secured creditors were owed £9.6m and include investors and former directors including Tim Yeo, MP for South Suffolk and former Minister for the Environment and Countryside, who was nonexecutive director (unpaid) and shareholder. Yeo left the directorship role in April along with several others including founding director, Miles Lewis.

Unsecured creditors were left owed around £590,000.

The contract for the Nottingham project was then terminated and a £6m bid from Warwick Energy for ITI Energy was accepted, based on the condition that the gasifier technology works and that the money would be deferred based on future contracts.

ITI Energy website

Images: Newcastle University

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