Clean Air Power is raising £2.3 million gross through a placing and subscription at 12.5p a share in order to provide additional working capital for the business. Loss-making Clean Air warned in July that its 2010 sales would be lower than expected and it was running short of cash. At the end of August there was £900,000 in the bank.
Clean Air’s Dual-Fuel combustion technology enables heavy-duty diesel engines to run on a combination of both diesel and natural gas.
Delays have occurred in the construction of a BOC gas facility in Tasmania. Once this is up and running it will provde a fuel supply for vehicles using Clean Air’s technology.
Another problem is the amount of time which Clean Air has spent on its Volvo project, resulting in delays in the progress of its Genesis EDGE product.
Clean Air has signed a five year supply and development agreement with Volvo Powertrain. The deal, which covers truck engines, follows an initial agreement at the beginning of 2009. The company’s Dual-Fuel technology could make the engines 30% more efficient, and commercial trials will begin in the UK, Sweden and Thailand.
All of the company’s directors are buying shares. Credit Suisse is also making an additional investment, although its stake will still be diluted from 32.7% to 29.3%.
12 month high/low: 39.5p/13p
Market cap: £9.6m
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