RVA Renova

RNS Number:6106N
Renova Energy plc
08 February 2008



For immediate release                                            8 February 2008

                 Renova Energy plc ("the Company" or "Renova")

                       Heyburn project and funding update

Renova Energy plc (RVA:AIM), the ethanol production, distribution and marketing
company, today provides an update on its Heyburn project and the Group's
financial position.

The Company is pleased to report that its core production and distribution
business continues to generate positive operating cash flows, while discussions
with its banks are progressing with a standstill agreement now in place to
provide the Company with a period of time in which to re-plan completion of the
Heyburn project and to raise the additional finance to complete this project.

Funding update

As previously announced, in December 2007 Renova suspended construction of its
integrated 21 MMgal/yr ethanol production facility and 3.2 MW waste-to-energy
power plant at Heyburn, Idaho, following the identification of cost overruns.
These cost overruns amounted to approximately 30% on the original project cost
estimate of US$45 million. The Company has now engaged a leading firm of
engineering consultants, with particular expertise in the petroleum refining and
biofuels sectors, to re-plan and re-evaluate the costs to complete this project
over a revised schedule. This planning exercise is expected to be completed
before the end of February 2008 so that the Company can then move forward with
plans to raise the necessary funds in a combination of debt and equity to
complete the Heyburn project.

In the meantime, the Company has entered into a conditional Standstill Agreement
with its banks until 2 April 2008 under which the banks have agreed not to
exercise their rights relating to existing breaches of banking covenants by the
Company that resulted from the suspension of the Heyburn project. The
continuation of the Standstill Agreement until 2 April 2008 is conditional,
inter alia, on (i) delivery of the revised project plan referred to above and
(ii) no material adverse change in circumstances affecting the Company, its
assets or its business, which could include actions for payment by any unsecured
creditors of Renova Energy (ID) LLC, the Heyburn project company.

The Company has engaged Lazard Middle Market as financial advisors in the US to
assist in raising additional capital necessary to complete the Heyburn project.

Current trading

The Company's marketing and distribution business is continuing to achieve
strong growth with cumulative sales for the 10 months to 31 January 2008 of 10.9
MMgal, compared to 8.1 MMgal in the corresponding period last year, representing
year-on-year growth of 35%. This increase has been achieved through a
combination of additional volumes to existing customers and new customers. The
Company's average realised ethanol prices have remained strong despite weakness
in wholesale ethanol prices in the latter part of 2007, with the Company
realising an average price for the 10 months to 31 January 2008 of $2.27/gal
(2007 - $2.26/gal).

The production optimisation project at Renova's facility in Torrington, Wyoming,
to increase production capability to in excess of 10 MMgal/yr is still ongoing.
Key equipment started arriving on site last week and the project is scheduled
for completion in March 2008.

For further information please contact

Renova Energy
Chris Thomas, Chairman                                +44 207 299 4444
Fanton Chuck, Chief Executive Officer                 +44 207 299 4444
Raf Alam, Finance Director                            +44 207 299 4444

Brewin Dolphin
Ken Fleming/Jamie Cumming                             +44 845 213 1120

Buchanan Communications
Ben Willey                                            +44 207 466 5000

or visit www.renovaenergy.com

Glossary: MMgal - million gallons; MMgal/yr - million gallons per year



                      This information is provided by RNS
            The company news service from the London Stock Exchange

END
MSCUWAARWARURAR

Renova Energy (LSE:RVA)
Historical Stock Chart
From Jan 2025 to Feb 2025

Renova Energy (LSE:RVA)
Historical Stock Chart
From Feb 2024 to Feb 2025