Quadrise Fuels International, which supplies a low-cost alternative to heavy fuel oil in the shipping, refining, and power generation markets, has completed the placing of 50m new ordinary at 7p.
The proceeds of the placing, which totalled £3.5m, is believed to be sufficient to allow the company to develop its current projects to the stage when they can generate net positive cash flow from continuing operations, as well as to strengthen the company's balance sheet in order to meet any additional capital expenditure and general working capital requirements of the group.
The company also gave an update on its operations, saying that the fully detailed definition of the Saudi Aramco project (in Saudi Arabia) planning and execution process is expected to encompass the first major refinery project, followed by a larger scale programme to process the bulk of the available heavy residue to MSAR within Saudi Arabia. Agreements covering the demonstration plant installation and subsequent progression to full commercial operation are anticipated over the next 12-15 months.
In the Americas, there is an opportunity with Petroleos Mexicanos, the state-owned oil company of the Republic of Mexico, with contracts expected to be signed before the end of the year following extensive preparatory work.
In Asia, the agreement with YTL PowerSeraya in Singapore to identify and develop a MSAR fuels supply chain for their power plant in Jurong has been extended.
The firm was keen to emphasise that overall its principal managed programmes have been advanced over the past year, despite the fact a variety of factors have meant its revenue expectations have moved out by around 12 months.
In a statement the company said: "Every effort has been made to reduce the cash burn rate and the Placing will be instrumental in driving the business plan through to commercial revenue. The near term Central and South American prospects will also require funding but in these cases provision has been made in the relevant agreements for the introduction of financing partners at the project/venture level.
"The past 12 months have seen a step-change towards the commercialisation phase for Quadrise and our close partners. In particular, the two year MSAR Marine fuel development and assessment programme with Mærsk has moved forward to pre-commercial testing and certification.
"In Saudi Arabia, Saudi Aramco has formally approved the application of our Quadrise MSAR technology in their refineries and the execution of an MOA [memorandum of agreement] with M/S Rafid Group has settled the basis and terms for our future presence in the country. Quadrise is now well placed to move forward in both of these core business lines, each of which has the potential to have substantial impact on the future performance of the company."
The share price fell 6.35% to 7.38p by 12:57.