XL TechGroup company, AgCert International, announces intention to list on London Stock Exchange
03 May 2005
XL TechGroup (AIM: XLT), the systematic architect and builder of an ongoing stream of high value new companies, today announces that its first company, AgCert International ("AgCert"), a global leader in the production and sale of agriculturally derived greenhouse gas ("GHG") mission reductions ("Offsets"), has advised of its intention to proceed with a placing of its ordinary shares and to seek admission to listing on the Official List of the UK Listing Authority and to trading on the London Stock Exchange plc. It is intended that the flotation will be completed in June 2005 and that the ordinary shares will be placed with institutional investors in the United Kingdom and continental Europe.
As of 31 December 2004 , XL TechGroup's beneficial ownership in AgCert was approximately 43%. XL TechGroup remains very confident about AgCert's prospects and has no plans to sell any AgCert shares .
Dr John Scott, CEO of XL TechGroup, said "The planned listing of AgCert is a further validation of our systematic approach towards matching disruptive technologies to market needs. Since AgCert's inception, greenhouse gas emissions reduction has become one of the single most important issues in the world. We identified this market opportunity in 2002 through our systematic approach, and built AgCert to address the need."
"AgCert is the first company created by XL TechGroup and is followed by a high-quality pipeline of opportunities, including TyraTech which was created less than a year ago and is expected to be earning its first revenues by the end of this year. We also expect to be announcing the establishment of our third new business during the next few months and, following numerous exclusive option deals on technologies in recent months, there are a number of significant future opportunities in the XL TechGroup pipeline."
AgCert, an Irish company, was founded to generate Offsets from livestock farms for pooling and sale to industrial emitters, governments, funds and energy traders.
Key Strengths
- Founded in response to an identified market need;
- the first business with a scaleable, turn-key mechanism for Offset generation;
- UN approved methodology for Offset generation;
- agreements with over 500 farms for production of Offsets;
- provision of financial and sustainable benefits to farmers through modification of their animal waste management systems;
- €69 million of forward sales established;
- significant opportunities for growth; and
- a highly experienced management team.
The start of the European Union Emissions Trading Scheme ("EU-ETS") on 1 January 2005 and entry into force of the Kyoto Protocol on 16 February 2005 has created significant demand for Offsets. Point Carbon, a leading global provider of independent analysis, market intelligence and forecasting for the emerging carbon emissions markets, forecasts that the global market for Offsets could potentially reach €34 billion by 2010. Through buying these Offsets, emitters may ensure that their net greenhouse gas emissions remain within specified limits and thereby avoid financial penalties. AgCert has entered into forward sales contracts, valued in aggregate at approximately €69 million, with customers including Nuon, EDF, and BHP Billiton.
AgCert has identified agriculture as one of the largest commercial opportunities for Offset generation and expects to be a leading supplier of Offsets from this sector. Agriculture is responsible for approximately 20 per cent of the world's annual greenhouse gas emissions. Under the Kyoto Protocol, reductions in greenhouse gas emissions derived from agriculture can qualify as Offsets provided they are properly validated, verified, registered and certified according to the stringent requirements laid down by the United Nations. AgCert intends principally to produce a type of Offset known as Certified Emission Reductions ("CERs"), which are compliant under the Kyoto Protocol and the EU-ETS. Currently AgCert's systems and processes include one of only two UN approved large scale methodologies for the production of Offsets in the agricultural sector. At present, AgCert is waiting for various regulatory approvals before certification of its Offsets from the farms.
In order to generate Offsets, AgCert installs, operates and maintains animal waste management systems ("Biodigesters") on livestock farms. These Biodigesters allow for the collection and combustion of Biogas. This converts the methane in the Biogas into carbon dioxide and water, which have a much lower global warming potential than methane, and it is this difference that allows Offsets to be generated. Methane is 21 times more potent than carbon dioxide as a greenhouse gas, therefore burning it to produce carbon dioxide and water results in a 95% reduction in global warming potential, hence producing a greenhouse gas emission reduction.
To date, AgCert has initiated the modifications of animal waste management systems on approximately 200, principally swine farms in Latin America, which should create a reserve of approximately 15 million Offsets throughout the life of the contracts to which these farms relate. The farms benefit substantially from these sustainable projects. These benefits include renewable energy, fertilizer and localised environmental benefits.
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