The Renu Energy Ltd [ASX:RNE] share price was up over 80% earlier today after announcing it was buying Countrywide Renewable Hydrogen Ltd.
Headquartered in Brisbane, Renu Energy is looking to become the only ASX-listed company with a clean energy incubator/accelerator strategy.
What’s the deal?
Renu Energy will be buying 100% of Countrywide Renewable Hydrogen through a share purchase agreement. They’ll be issuing 134,659,520 fully paid ordinary shares at $0.0688 each. The price is Renu Energy’s 10-day volume weighted average price (VWAP) before going into the deal and well below today’s price.
The purchase gives Renu Energy exposure to three growing green hydrogen opportunities in Australia (northwest Tasmania, Melbourne, and Portland) along with a pipeline of opportunities in Canada and the US.
Renu Energy’s CEO Greg Watson said on the deal:
‘We are particularly attracted to the company’s origination expertise, existing portfolio of opportunities, as well as CRH’s overseas pipeline of opportunities. The acquisition is 100% scrip, conserving ReNu Energy’s cash. CRH will be debt free at completion and comes with positive working capital to progress the opportunities in the short term.’
Countrywide Renewable Hydrogen’s managing director, Geoffrey Drucker, explained why the opportunity was too good to pass up:
‘Our goal is to progress the pipeline of green hydrogen opportunities that we have originated and are ready to take to the next stage. The opportunity afforded by this transaction with ReNu Energy not only accelerates delivery of that outcome, but also gives us access to a quality team that will add value to our strategic planning and project delivery to the ultimate benefit of shareholders in both companies.’
CRH can also nominate two members to join Renu Energy’s board of directors. CRH has proposed managing director Geoffrey Drucker and non-executive chair Susan Oliver.
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What happens next for the RNE Share Price?
The deal is subject to Renu Energy’s shareholder approval and is scheduled to be completed in December.
While Renu Energy’s shares reached a high of 15.5 cents today on early trade, at time of writing they’re now trading lower at 11.5 cents. That’s still over 40% up from yesterday’s close.
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