EUROPLASMA: Resumption of Trading

                      EUROPLASMA: Resumption of Trading

  PR Newswire

  BORDEAUX, France, September 26, 2013

BORDEAUX, France, September 26, 2013 /PRNewswire/ --



   Successful Conciliation Procedure and Resumption of Trading, New Funding
                                   Provided

1. SUMMARY: SUCCESS OF THE CONCILIATION PROCEDURE AND SHARE RETRADING

A conciliation process was entered into on 21/02/2013 between Europlasma,
Crédit Suisse Europlasma SPV LLC (" CS ") and the lender and majority owner of
the waste and biomass to energy power plant in Morcenx (the " CHO Morcenx
Partner "), with the collaboration and support from the public authorities,
the key suppliers and its main banking partner. As a result, the share trading
was suspended 15/04/2013 to allow for confidentiality in the conciliation
procedure.

A conciliation procedure is voluntarily requested by a company in financial
difficulties to protect its best interests and those of its shareholders,
concluding in mutual agreements with its creditors and partners. These
agreements are aimed at ensuring the long term viability of the company by
improving the financing conditions and providing cash flow relief.

After five months of conciliation, we are delighted to announce that approval
was given by the Commercial Court of Mont de Marsan on 06/09/2013 on the
memorandum of settlement signed with the Group's partners. As such, the
trading in Europlasma shares will resume on Monday, 30 September 2013 at 9:00
a.m. CET in normal market conditions.

2. WHAT HAS TRANSPIRED OVER THE LAST 12 MONTHS?

CHO Power, the sub dedicated to Renewable Energies, completed the construction
of the 12MW WTE plant in Morcenx last year on time, producing up to 6MW and
proving the overall efficiency of the CHO process and the business model.

However, the "Take-Over Date" of the plant was delayed, largely due to
deficiency of the gasifier in the process. In essence, the gasifier was not
allowing enough through put to be put through the system, disabling the
ability to ramp-up to full production. Given the success with the rest of the
CHO process, the decision was taken to replace the faulty gasifer with one
manufactured by PRM Energy Systems Inc., a US company, with 31 years of
experience and over 25 installed gasifiers around the world. With this
replacement, the Board, Management, the reference Shareholder and the CHO
Morcenx partner are all confident that the plant will be able to operate at
full power.

These delays caused temporary cash flow challenges due to 3 effects: (i) delay
in the revenue from the plant, (ii) delay in the release of the EPC
guarantees, and (iii) working capital needs to support the interim period,
forcing the Group to initiate a conciliation procedure. This procedure was
structured to protect the best interests of the company and its shareholders
and has resulted in improved financing conditions, fair security packages and
cash flow relief, as can be seen below.

3. SUMMARY OF CONCILIATION PROCESS AND AGREEMENT

The conciliation started on Feb 21, 2013 and ended July 18, 2013, with all
parties aligned and the agreement signed, subsequently ratified by the Court
on September 6, 2013 and notified to the parties on September 16, 2013. As a
result:

  *Significant new funding by CS and the CHO Morcenx Partner has begun in
    three tranches, mainly to finance the purchase of the new gasifier and
    support the start of the ramp-up. Through this process and their funding,
    our stakeholders have once again reiterated their confidence and support.

As a result of the financing associated with the conciliation, the Company's
cash shortage issues have been solved for the short-term. More specifically,
the process itself resulted in the implementation of the following measures:

  *CS and the CHO Morcenx Partner have, on a pari passu basis, granted CHO
    Power an additional loan of €4.6m at an interest rate of 8%, retroactively
    increasing to 12% once the "Take-Over-Date" is achieved, repayable by
    8/2014. The funds are to be paid in 3 successive instalments. The first 2
    instalments were paid on 7/2013 and 3 ^rd is underway.
  *The guarantees associated with this loan include standard security
    packages (e.g pledge of securities and assets, certain oversight on
    governance changes, regular preferential claim on new money granted as
    part of the conciliation).
  *Additionally, the loan conditions from 12/2012 have been relaxed
    materially by both CS and the CHO Morcenx Partner, including lowering the
    interest, extending the maturity date and foregoing additional warrants
    due under the contract.
  *Lastly, to meet working capital requirements for the ramp-up, additional
    funds will be raised from shareholders and other investors before the end
    of the year, subject to shareholders approval at the next General Meeting.

Since 2008, CS has invested in several instances, for total equity and debt of
more than €19 million, repeatedly showing its support and confidence in the
company and its shares. As well, the CHO Morcenx Partner has acted as lender
for the majority of build costs of the waste-to-energy plant in Morcenx (more
than €25 million in project debt) and participated in the recent loan
financings (December 2012 and this summer under the conciliation procedure),
also exemplifying their belief in the underlying technology and commercial
aspirations of the business.

4. OUTLOOK - KEY BUSINESS REORGANIZATION MEASURES TAKEN

In addition to this new funding, several financial and operational
restructuring measures have been taken to ensure the recovery of the Group's
overall situation and focus its activities. These include:

A. New organization structure to match strategy and profitability focus

To improve its performance and visibility, the Group has decided to sharpen
its focus, with a renewed focus and vigour around its core businesses. As
such, an internal reorganisation is underway, starting with the separation and
grouping of all activities into two distinct operating divisions, "Renewable
Energies" and "Hazardous Waste". New group structure and org charts have been
prepared to align the business units with the legal vehicles.

This will allow for efficient and bottom-line focused management, the
elimination of duplication of activities, closer key performing indicators
(KPI) monitoring, spending focused only on profitable growth, as well as
efficient fundraising in the future. Marketing and sales have been reorganized
with these objectives.

B. Reorganization of CHO Power

Under the "Renewable Energies" division, in order to prepare CHO Power for
further growth, several measures have been taken, both operationally and
financially:

  *Operationally, CHO Power has been reorganized so that it houses all
    relevant staff, technology, activities and contracts related to the CHO
    process. This will allow for a proper valuation of the activities,
    accruing direct value to the Europlasma shareholders (which owns 100% of
    CHO Power). As the growth driver of the business, the Board wants to
    ensure that the value of this division is discernible, as it believes in
    its technology differentiation, financed pipeline and ability to develop
    world-class projects.
  *Financially, to strengthen the capital base of CHO Power at the head of
    the "Renewable Energies" segment, its share capital was increased by €24
    million via the incorporation of debt, and then reduced by €11 million via
    the clearance of prior losses. Following these transactions, the share
    capital of CHO Power amounts to €14,393,224. Europlasma's interest in CHO
    Power is unchanged at 100%.

These measures have no material cash effect on the group but allows CHO Power
a clean balance sheet to grow over the coming years, both through its pipeline
(see below in next section) as well as through the debt markets.

C. Set up of CHOPEX

As part of the CHO Power reorganization, the incorporation in July of CHOPEX,
a company wholly owned by CHO Power, dedicated to the operation of the
waste-to-energy plant in Morcenx and the training of operating personnel for
new plants in the future. Operating personnel at the Morcenx plant, initially
recruited by Inertam, and the O&M (operation and maintenance) contract,
originally awarded to Inertam, have been transferred to CHOPEX.

D. Sale of non-core assets and discontinuation of non-core activities

The disposal of Europe Environnement, 51% owned, is underway. Several
potential buyers have expressed interest, and the transaction is expected to
close early 2014. This operation is in line with the desire to focus on core
activities only as well as will have the added benefit of bringing in
additional cash resources into the Group.

E. Establishment of moratoriums (public authorities and suppliers)

The public authorities, through the General Directorate of Public Finance,
have provided the Group with support by rescheduling the payment of
significant tax and social security liabilities. The Group has also received
the support of its key suppliers and its main banking partner, which have
agreed to defer certain payments.

F. Preference shares converted into ordinary shares

As of this day, all of the Europlasma's preference shares have been converted
into ordinary shares. Share capital amounts to €15,764,735, consisting of
15,764,735 ordinary shares.

G. Overall effect on financial results

The delay in the Take-Over-Date, the decision to replace the gasifier, and the
implementation of the reorganization measures have all had a significant
impact on the financial statements for fiscal 2012, though most of these
effects are accounting, non-recurring and non-cash. In addition, significant
asset impairments have been recorded in view of the uncertainties and risks.
Please see the accompanying press release. The Board believes that the
conservatism taken in preparing the financial statements, combined with the
focused approach to our business, will result in a clean slate with which to
approach our growth over the coming years.

H. Effect on senior management

As was reported on 11/7/2013, the Board of Directors put an end to Mr.
Pineau's executive positions. He also resigned from his Director's seat. Mr.
Marchal, current Director, was appointed as acting CEO for a 6 month period.

In the meantime, the Board has engaged with a top-tier executive search firm
to find a permanent replacement to Mr. Pineau, where the process is very
advanced and the final candidates have been chosen. The new hire will be a
world-class CEO, with deep and relevant experience, who will drive the
company's growth going forward, focusing solely on value creation for the
company and shareholders. The Board and Management want to assure the
shareholders that they take this step very seriously and will ensure the
continuity and success of the business.

5. OUTLOOK - FOCUSED VISION ON CORE BUSINESS AND PROFITABILITY

The Group will devote itself exclusively to scaling both the Hazardous Waste
and the Renewable Energies businesses over the medium term. Given the proven
technologies in the Hazardous Waste and Renewable Energies domains, a focused
delivery of value creation activities for each of these, supported by the
Group's achievements over the last 12 months, will drive the long-term growth
over the coming years:

A. "Hazardous Waste"

Notable progress over the last 12 months:

  *The triennial comprehensive overhaul of the asbestos waste processing unit
    was conducted this summer on budget and on time. Technical issues
    encountered over the previous several months in respect of the preparation
    of loads for the processing line have been resolved. These changes,
    combined with the comprehensive overhaul of the furnace, should accelerate
    production rates. The plant has resumed operations on 20/09/2013, in line
    with the production schedule.
  *The plasma furnace designed and built by Europlasma under the KNPP
    (Kozloduy Nuclear Power Plant) contract for treating low-level radioactive
    waste was delivered to the customer in July. The plant will be shipped to
    Bulgaria after disassembly. Europlasma has also demonstrated the
    performance of the plasma furnace to key players in the nuclear industry
    who had expressed an interest. The presentation was made using
    representative non-radioactive waste.

Expected value creation over the medium and long term:

  *The Management believes that the Inertam and KNPP units provide the proof
    points necessary to scale the Hazardous Waste business significantly. A
    strategic market assessment is currently being carried out to understand
    where the most profitable market segments lie and what the most efficient
    approach to such markets is. The Board and Management are very confident
    about these business opportunities and will update all shareholders on the
    progress over the coming months.

B. "Renewable Energies"

Notable progress over the last 12 months:

  *Since its construction was completed last summer, the WTE power plant in
    Morcenx has proven its overall efficiency, thanks in part to the wood
    dryer equipment connected.
  *Given the technical difficulties and thanks to the funding form the
    conciliation, the old gasifier at the plant has been dismantled, with the
    new gasifier having been ordered. Engineering studies have been completed
    and installation and connection work on the new gasifier will continue
    until December 2013, allowing the plant to resume operations in early
    2014. The new "Take-Over Date" is 28 February 2014.
  *The first four test campaigns of the KIWI (Kobelco Industrial CHO poWer
    gasIfication) R&D programme, carried out in 2012/13 in partnership with
    Kobelco (former Kobe Steel), have been highly successful, particularly in
    respect of the destruction of tars using the Turboplasma system.

Expected value creation over the medium and long term:

  *The CHO Power business remains the key driver of value creation for
    Europlasma. With the gasifier change and once the WTE power plant is up
    and running, Management will focus on developing the pipeline it has kept
    "warm", with the added benefit of the financing being made available in
    large part by the CHOM Morcenx partner. With financing exclusivity for 8
    plants across different countries, CHO Power is poised for strong growth
    over the coming years.
  *Additionally, the KIWI platform mentioned above will provide the Group
    with an added source of competitive advantage, which when coupled with its
    proven technology at the Morcenx plant, will turn CHO Power into a world
    leader in plasma gasification. The combination of the Turboplasma system
    with the gasifier will allow for the CHO process to be seamlessly
    integrated into potential facilities.

6. WHAT DOES THIS ALL MEAN FOR OUR SHAREHODERS?

The Management and the Board would like again to thank all shareholders for
their patience and understanding as the Group has undergone this conciliation
process. With the reiterated support of our key stakeholders, the Group is
poised to embark on a new era of profitable and focused growth. The
world-class technologies, associated pipelines and business opportunities,
combined with the support and continuity from our financing partners, new
Management and cash flow relief from the conciliation, should all work to
provide strong and profitable growth opportunities over the medium-term,
accruing direct value to our loyal and existing shareholders.

7. FINANCIAL CALENDAR

25 September 2013 :  Annual General Meeting notice (BALO)

26 September 2013:  Release of the FY 2012 consolidated results + 2012 Group
financial statements

30 September 2013:  Resumption of trading

31 October 2013:  Release of the HY Unaudited 2013 results

08 November 2013:  General Meeting of Shareholders

Contact: François MARCHAL, Acting C.E.O. Tel: +33-556-497-000
contactbourse@europlasma.com
 
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