RVA Renova

    RNS Number : 2032X
  Renova Energy plc
  20 June 2008
   

    For immediate release
            20 June 2008

    Renova Energy plc ("the Company")

    Update on US operations

    Renova Energy plc (RVA: AIM), the ethanol production, distribution and marketing company, today provides an update on its financial
position.

    The Group has agreed terms with its Lenders, subject to documentation, for the provision of additional new working capital facilities
amounting to US$4 million in aggregate.  With this funding commitment in place, the US subsidiaries of the Company have voluntarily filed
for Chapter 11 bankruptcy protection as the next step in the financial restructuring process.  This provides the framework within which the
ethanol marketing, distribution and production business can continue to operate in the ordinary course.

    Discussions with the creditors, of Renova Energy (ID) LLC, the project company, that owns the Group's partly constructed ethanol
facility in Heyburn, Idaho, are ongoing.  Discussions with other interested parties, including potential purchasers, are also ongoing.

    The new working capital facility does not extend to funding the parent company, Renova Energy plc.  In the absence of new funding, the
parent company has limited financial resources with which to continue to operate as a going concern.  The Company is, therefore, continuing
to explore other financing and strategic options.  


    Commenting on this, Chris Thomas, Chairman, said:

    "It was very important that we secured additional working capital for our existing and growing business to provide re-assurance to our
customers and suppliers whilst discussions with our lenders are ongoing.

    Despite the Group's financial difficulties, which were caused solely by project cost overruns on the now suspended construction of the
ethanol plant in Idaho, the Group's existing business continues to grow and to generate positive cashflow. In the year to 31 March 2008
approximately 14.2 million gallons of ethanol were sold at an average price of $2.30/gal. In the two months ended 31 May 2008, 3.9 million
gallons of ethanol were sold at an average selling price of $2.81/gal. This represents further annualised sales volume growth of over 60%
since the year end."

    For further information please contact

 Renova Energy
 Chris Thomas, Chairman                 +44 207 299 4444
 Fanton Chuck, Chief Executive Officer  +44 207 299 4444
 Raf Alam, Finance Director             +44 207 299 4444

 Brewin Dolphin
 Ken Fleming, Director                  +44 141 221 7733

 Buchanan Communications
 Ben Willey/Ben Romney                  +44 207 466 5000


    or visit www.renovaenergy.com


This information is provided by RNS
The company news service from the London Stock Exchange
 
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