Active Energy reorganises, solicits offers for Ukraine operations

International renewable energy and forestry management company Active Energy Group announced on Monday that the board is reorganising the group’s structure to focus on its two principal growth areas.

The AIM-traded firm said those two growth areas were the global commercial rollout and development of AEG's biomass coal replacement fuel product, and the development of a forestry management business based in various territories.

As a result, AEG said it now intended to reduce its operating exposure to Ukraine, and establish two separate affiliate companies to hold AEG's current and future CoalSwitch and Timberlands assets.

The first affiliate company was to be called Advanced Biomass Solutions, which would hold all of the current CoalSwitch operations controlled by AEG in North America, along with all future projects relating to the company's unique biomass coal replacement technology.

Timberlands International was the other, which would hold all of the current timberland assets controlled by AEG, along with forthcoming timberlands projects which AEG acquires in the future.

To implement the growth strategies of each company, Richard Spinks, the group's CEO, had been appointed to the board of Timberlands and Brian Evans-Jones, the group's CFO, to the board of ABS.

AEG said it intended to appoint additional directors with relevant industry experience to each of the boards of ABS and Timberlands in due course.

The company had already received significant international interest for the activities of both ABS and Timberlands, which the board believed underpinned the reorganisation plans.

As a result, the company confirmed it had decided to reduce its operating exposure to Ukraine and would consider offers for its Ukrainian WoodFibre operations.

It envisaged that, under the terms of any transaction, AEG would retain a share of the current and future revenues from AEG WoodFibre.

In the light of the decision, chief operating officer Matteo Girlanda had resigned from the AEG board with immediate effect, to present an offer for AEG WoodFibre and avoid any conflicts of interest during the period of negotiation.

“ABS and Timberlands represent two highly compelling business opportunities for AEG, which we believe are capable of establishing important new franchises in each of their existing industry sectors,” said group chairman Michael Rowan.

“The market opportunities being presented to each of these companies show considerable commercial potential.

“Accordingly, the board has resolved that to achieve optimal success and capitalise on this, AEG needs to create a more defined group structure to execute these opportunities in an efficient and value accretive manner.”

Rowan said the reorganisation would decrease AEG's future involvement in AEG WoodFibre and operations in Ukraine, thus significantly reducing the group's perceived geographic risk profile and allow investors to focus on “two exciting investment strategies” that were complementary, but also had significant value as standalone operations.

“The board would like to express gratitude to Matteo Girlanda for his support over the last four years.

“We look forward to entering into negotiations with Mr Girlanda with the objective of ensuring the smooth transition of AEG WoodFibre for the benefit of all parties.”