ReNu Energy to sell hydrogen business

SYDNEY: ReNu Energy Limited (ASX: RNE) announced Thursday it has agreed, subject to shareholder approval, to sell its Countrywide Hydrogen Business, including its Tasmanian green hydrogen project, to Countrywide Hydrogen Holdings Pty Ltd, an entity controlled by ReNu Energy’s management team.

On October 14, 2024, ReNu Energy received a non-binding indicative offer from its management team for the company’s wholly owned subsidiary, Countrywide Hydrogen Pty Ltd, and its hydrogen business assets. ReNu Energy engaged constructively with the proponents, establishing an Independent Board Committee comprising Susan Oliver AM and Greg Watson to oversee the proposal and make recommendations to shareholders.

The Independent Board Committee unanimously recommends the proposed divestment, in the absence of a superior proposal and subject to the Independent Expert concluding that the proposed divestment is fair and reasonable to ReNu Energy shareholders, excluding the buyer and its associates.

ReNu Energy and Countrywide Hydrogen have entered into an Asset Sale and Purchase Agreement for the sale of the Countrywide Hydrogen Business and assets to the buyer for total consideration of up to $1.1 million. The deal includes cash payments, the assumption of employee entitlements and equipment leases, and a cash royalty based on project revenue.

The divestment is subject to several conditions, including shareholder approvals under ASX Listing Rules 10.1 and 11.2, the Independent Expert’s conclusion on fairness and reasonableness, the release of security interests over the Countrywide Hydrogen Business assets, and no material adverse changes before completion.

ReNu Energy cited market feedback, financial position, project funding requirements, and recent Board and Executive changes as reasons for the proposed divestment. The Countrywide Hydrogen Business requires significant additional capital to progress, which ReNu Energy lacks.

The proposed divestment is expected to save ReNu Energy over $40,000 per month in operating costs and strengthen its balance sheet. Post-divestment, ReNu Energy will seek opportunities to create shareholder value through acquisitions, equity investments, or strategic combinations.

ReNu Energy is consulting with ASX regarding the transaction, which will require re-compliance with Chapters 1 and 2 of the Listing Rules due to the significant change in the company’s nature and activities.