Proposed Acquisition, EGM

RNS Number:4539O
Cue Energy Plc
21 February 2008


21 February 2008


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

Restoration of Trading on AIM, Proposed Acquisition, Notice of EGM, Resignation
                     of Director and Appointment of Broker


On 28 September 2007, the Company announced that it had agreed in principle,
subject to funding, to acquire 100% of the issued capital of Oreion Australia
Energy Pty Ltd ("Oreion"), a private Australian company, in order to
commercialise the micro fuel cell technology ("the PEM Technology") which had
been developed by CSIRO, Australia's leading technology research organisation.
Trading in the Company's ordinary shares on AIM was suspended as the acquisition
would have been classified as a reverse takeover under the AIM Rules.


On 24 December 2007, the Company announced that the Directors were working on a
structure under which Oreion would commercialise the PEM Technology as an
independent company in which Cue would have a significant equity position and
that discussions regarding the original proposed acquisition had therefore
terminated.


The Company has today conditionally agreed terms for the acquisition of 100% of
the issued capital of Oreion (the "Acquisition"). As mentioned below, and as
part of the Company's passive investment strategy, it is envisaged that Oreion
will raise funding and seek partners in order to enable the continued
commercialisation of the PEM Technology.


The Company will issue 50,000,000 new ordinary shares at an issue price of 2p to
the shareholders of Oreion (the "Consideration Shares") in consideration for the
Acquisition. The Consideration Shares will represent approximately 18% of the
total issued enlarged share capital of the Company. At the issue price, the
value of the Consideration Shares is £1,000,000. Approval will be sought from
Shareholders in a general meeting to effect the Acquisition. Trading in the
Company's ordinary shares on AIM has been restored with effect from today as the
Acquisition is not classified as a reverse takeover under the AIM Rules.


Since incorporation on 4 September 2001, Oreion undertook no trading or other
activities until 3 August 2006 when it entered into the first of various
agreements with CSIRO (the "Commercialisation Agreements"). The
Commercialisation Agreements have been extended beyond their original expiry
date until 30 June 2008 conditional inter alia upon the Acquisition and
subsequent funding contributions of A$69,000 per month (£32,547 at an exchange
rate of A$2.12 to £1) by Oreion. They are also conditional on the Company and
Oreion obtaining sufficient funding to enable the continued commercialisation of
the PEM Technology. The level of funding required will be dependent on further
negotiations with CSIRO and other potential partners.


By virtue of the Commercialisation Agreements, Oreion intends to become a
leading enabler of fuel cell technology, generating revenues through the
sub-licensing of the PEM Technology for the development, manufacture and sale of
fuel cell test stations and PEM electrolysers, and subsequently through the
technology development of direct hydrogen micro fuel cell products and the
licensing of related fuel cell technology. Under the Commercialisation
Agreements, Oreion will, under certain terms and conditions, have an exclusive
worldwide licence over certain advanced technology as well as access to a highly
experienced technical team.


Oreion's audited Financial Accounts for the period ended 30 April 2007 reported
a loss before tax of A$516,001 (£239,352) and net liabilities of A$509,751
(£236,453). It is proposed that Oreion's operations in Australia will continue
to be managed by its current directors, John Simpson and Tim Malloch, with
Oreion's management reporting to the Board of the Company.


As at 31 December 2007, the total expenditure (unaudited) incurred by the
Company on technical, commercialisation and legal costs in relation to the
Oreion transaction totalled £1,376,611. These costs will continue to be carried
forward and capitalised in the accounts of the Company. In addition, the Company
has provided Oreion with a convertible loan of £250,000 under the finance
facility agreement dated 3 January 2007. As at 21 February 2008 the Company has
cash at bank of £823,792.


The Company will continue to pursue additional new investment opportunities in
line with the proposed amended investing strategy.


In order to balance the operational costs of the Company moving forward with the
Acquisition, Jade Styants has resigned from the Board with immediate effect.


HB Corporate has been appointed sole broker to the Company replacing Hichens,
Harrison & Co plc.


A circular has been sent today to shareholders convening a general meeting to
consider the following resolutions:-


1.       an ordinary resolution to amend the Company's Investing Strategy by
expansion of the geographical focus;

2.       an ordinary resolution to approve and renew the Company's Investing
Strategy as amended by Resolution 1;

3.       an ordinary resolution to approve the Company's continuing in the
business of seeking investments as directed by 1 and 2 above;

4.       an ordinary resolution to approve the Acquisition;

5.       an ordinary resolution to authorise the directors to allot new shares
in the Company up to an aggregate nominal amount of £13,838,855;

6.       a special resolution to disapply statutory pre-emption rights which
would otherwise apply on the allotment of new shares for cash in connection with
rights and similar issues and otherwise up to an aggregate nominal amount of
£5,000,000; and

7.       a special resolution (which will be proposed if Resolution 3 has not
been passed, but not otherwise, immediately following the vote on Resolution 3)
to place the Company in voluntary winding-up.


A copy of the circular is available on the Company's website at
www.cueenergy.co.uk.


For further information:

Cue Energy plc
Malcolm James / Gregory Kuenzel Tel: [phone]


www.cueenergy.co.uk


HB Corporate
Edward Hutton/ Rachel Kane      Tel: [phone]



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