Enerji Limited (ASX:ERJ) Scales Down Convertible Bond Facility

Perth, Dec 8, 2011 AEST (ABN Newswire) - Perth based green power company Enerji Limited (ASX:ERJ) has renegotiated a previous $25 million convertible bond facility with Fortensa Special Opportunities Fund ("Fortensa").

A variation agreement has been signed by both parties with the key changes being:

- Reduction in the overall facility maximum from $25m to $6.25m. $1.25m has already been drawn down with $5m remaining

- Reduction of tranches to $250,000, down from $1m

- The conversion price formula is now the higher of:

90% volume weighted average price (VWAP) for a 5 day period in the past 30 days - previously it was the average closing price; and

80% of the VWAP for the 5 days prior to conversion.

The new conversion formula effectively sets the minimum conversion price of bonds to be in line with Listing Rule 7.3.3.

Since Enerji has drawn down $1.25 million of the facility earlier in the year, it has been unable to make further use of it because of the existing conversion price. Under the original agreement Enerji had to draw down a minimum of $12 million in the first 24 months or pay liquidated damages.

Draw downs are still initiated only at Enerji's request.

"The re-negotiation should get the facility working again and it can become a valuable funding resource for the company to complete the imminent installations of Opcon Powerboxes once our recently signed MoUs begin to bear fruit," said Enerji CEO Greg Pennefather.

"Once the outstanding bonds are converted, it reduces the maximum debt from $1 million to $250,000, allows the facility to operate as intended providing a funding source for the company and reduces the number of shares that Fortensa holds after a conversion."

"This revised version of the arrangement will assist in funding Opcon Powerbox installations that will become Enerji's revenue streams."

An added benefit of significantly reducing the size of the facility is that Enerji will be better able to realise its stated goal of debt funding the implementation of Opcon Powerboxes sooner than might otherwise have occurred with the larger bond facility in place. The Company is actively seeking to secure debt funding for its upcoming projects and is in discussions with a number of debt providers.

The changes to the price at which shares are issued will require shareholder approval for conversion of existing bonds and the issue of further bonds. Enerji will seek these approvals at an EGM early in 2012. Previously Enerji received a waiver of listing rule 7.3.2 to be able to issue shares upon conversion of bonds for up to 15 months without further shareholder approval. This will be nullified by the changes.

At the EGM shareholder approval will be sought, among other things, to issue up to $5 million worth of bonds which are convertible into shares at no less than 80% of the VWAP for the 5 days prior to issue of the shares. The Company will seek another waiver of listing rule 7.3.2. in order to issue the bonds for up to 15 months from shareholder approval without the need to seek further shareholder approvals.

The bonds have a 5 year term and, if not converted by Fortensa prior to maturity, are redeemable by Enerji at the face value. The bonds are convertible into Enerji ordinary shares at Fortensa's election. All bonds must be converted before a subsequent tranche can be issued unless otherwise agreed.

Fortensa is a multi-strategy investment fund and is an alternative provider of capital and investor in businesses in the Asia-Pacific region.

A Notice of Meeting will soon be distributed to shareholders with the Explanatory Statement accompanying the Notice of Meeting including details and the new terms and conditions of the bonds.

Contact

Greg Pennefather Enerji Limited Tel: +61-8-9268-3800 http://www.enerji.com.au