Placing

    RNS Number : 0659A
  Bluewater Bio International
  29 July 2008
   
    Bluewater Bio International

    Update on Operations

    Placing of new ordinary shares

    Notice of Extraordinary General Meeting

    29 July 2008

    Introduction

    Bluewater Bio International ("Bluewater Bio" or the "Company"), the provider of an advanced wastewater treatment solution named HYBACS,
is pleased to announce that it has conditionally raised a total of �2,000,000 (before expenses) by way of a placing of new Ordinary Shares
of 0.5p each ("Ordinary Shares") with Lehman Brothers International (Europe) (the "Investor"). The Placing will comprise two tranches. For
the initial tranche, the Board has agreed to place the maximum number of Ordinary Shares for which it is currently authorised to do so with
the Investor with immediate effect. 
    To enable the Company to satisfy the issue of the second tranche of Ordinary Shares pursuant to the Placing, the Company is now seeking
to increase its authority to issue new Ordinary Shares at an Extraordinary General Meeting to be held at 10 a.m. on 21 August 2008 (the
"EGM"). Part of this authority will be utilised to allot sufficient Ordinary Shares to the Investor. A circular requisitioning the EGM is to
be sent to shareholders today.
    The Company is also pleased to provide an update on its operations in the period since the Company was admitted to AIM in December 2007.

    Update on Operations
    The Company was incorporated and registered in the Cayman Islands on 12 September 2007 and was admitted to trading on AIM on 13 December
2007, when it raised �2,775,000 before expenses by way of a placing of 22,200,000 Ordinary Shares at 12.5p per share. The Company is the
holding company of a group of companies involved in the design and marketing of an advanced biological solution to wastewater, called
HYBACS.
    At the time of the Company's admission to trading on AIM, the Board anticipated that the Company's initial market would be the private
industrial sector. As circumstances have developed since this time, however, the Board has initiated a change in strategy, which now sees
the Company focusing more on the perceived higher value municipal wastewater treatment sector, particularly in the United Kingdom and
elsewhere in Europe. Notwithstanding this change in strategy, Bluewater continues to address opportunities in the industrial sector, which
had been the focus of the Company's strategy at the time of admission to trading on AIM.
    A key rationale behind this shift in strategy is the directors' belief that substantial opportunities exist amongst companies serving
the municipal sector following recent substantive early stage meetings with first tier water companies in the United Kingdom and
internationally.  
    The Board is pleased to confirm that the Company is in discussions and negotiations with a number of parties who wish either to install
pilot plants, or who are otherwise commercially interested, directly or indirectly, in deploying the Company's HYBACS wastewater treatment
solution. Pilot plants are often necessary because such companies wish to be able to evaluate the Company's technology to ensure the
technology is compatible with factors such as weather and the constituent characteristics of domestic wastewater in different geographical
locations.
    The Company has entered into memoranda of understanding with several such parties. The various discussions and negotiations are at a
pre-contractual stage and the commercial terms have not yet been fully agreed. The Board will continue to pursue such projects to maximise
the benefits for its shareholders, however disclosure of the type and size of these projects cannot be made with certainty at this time and
no binding agreements have been signed. The directors believe the Company is close to executing a definitive contractual agreement for a
HYBACS pilot plant and associated evaluation program with at least one first tier European water company, which the Company will announce in
due course following the execution of such an agreement or agreements.
    As a result of the developments set out above, the Board has decided to develop a pilot-plant based strategy, which was not budgeted for
at the time of admission to trading on AIM and which has resulted in a greater cash outlay than that initially foreseen. On that basis, the
Company therefore wishes to undertake the current fundraising in order to increase its available capital to properly execute such strategy.
    Placing of new ordinary shares
    The Board has conditionally agreed to raise �2,000,000 (before expenses) by way of a placing of new Ordinary Shares to the Investor in
two tranches.
    As the first tranche of this fund raising, the Board has agreed to place the maximum number of Ordinary Shares for which it is currently
authorised, to the Investor with immediate effect, being 7,200,000 new Ordinary Shares at 4.5p per share for a total consideration of
�324,000.  
    The Board is also seeking additional authority to allot up to a further 177,516,562 Ordinary Shares. This authority will be utilised to
allot further shares to the Investor for an aggregate consideration of �1,676,000, at a price per Ordinary Share equivalent to the average
closing mid-market price quoted for an Ordinary Share over the five trading days immediately preceding the date of the EGM, subject to a
maximum price of 9p per Ordinary Share.
    The directors believe this fundraising will contribute to the Company's financial stability based upon the Company's present cash
requirements, and the current business opportunities.
    The Investor is an existing shareholder in the Company with a current shareholding of 13,500,000 Ordinary Shares representing 6.3% of
the issued share capital of the Company. Following the issue of the first tranche of new Ordinary Shares pursuant to the Placing the
Investor will hold 20,700,000 Ordinary Shares, representing 9.3 per cent. of the issued share capital of the Company.
    In order to exploit the potential opportunities that the Board believes are likely to develop in the medium term, the Company is likely
to require funding in addition to that which is currently being raised from the Investor. To provide the directors with additional
flexibility to issue further new Ordinary Shares in the future, the Board is seeking Shareholders' approval to increase the authorised share
capital of the Company and provide authority to the directors to allot Ordinary Shares up to the full amount of the new authorised share
capital. Dependent on the pricing of the new Ordinary Shares issued to the Investor after the EGM, it is anticipated that this will provide
the directors with ample authority to issue further shares. Accordingly, appropriate resolutions to be proposed at the EGM are set out in
the notice of EGM set.
    Extraordinary General Meeting
    The EGM will therefore be held at 10 a.m. on 21 August 2008 at the offices of Geneva Financial Services, Rue du Rh 118, 1204 Geneva,
Switzerland at which certain resolutions will be proposed to:
    *     approve, by ordinary resolution, the increase in the authorised share capital of the Company by 100,000,000  Ordinary Shares to a
total of 400,000,000 Ordinary Shares; and    *    grant by ordinary resolution, authority to allot and issue, otherwise than pro-rata to
existing members, Ordinary Shares with an aggregate nominal value of �887,582.81, being 177,516,562 Ordinary Shares.    Daniel Ishag, CEO of
Bluewater Bio, commented "We are delighted that Lehman has agreed to increase further their holding in Bluewater Bio and provide additional
capital for the Company. We look forward to building further on the opportunities in the wastewater sector at this exciting stage and
outlining our anticipated progress to our shareholders and the Market in due course." 

    Enquiries:

 Bluewater Bio International                      Tel: +44 (0) 20 7907 9820
                                                                           
 Daniel Ishag, CEO                                                         
  
 Citigate Dewe Rogerson (PR advisor)            Tel: +44 (0) 20 7638 9571
  
 Tom Baldock /Lindsay Noton                                                
  
 Strand Partners Limited (Nominated Adviser)     Tel: +44 (0) 20 7409 3494 
                                                                           
 James Harris/Angela Peace                                                 
  

    Notes to Editors 

    About Bluewater Bio 

    Bluewater Bio International designs and markets a highly innovative advanced biological solution to the treatment of wastewater, called
HYBACS. This system deploys a different biological approach to any internationally established wastewater treatment process. Through its
design and operation, HYBACS biologically selects a particular group of bacteria, Bacillus, with unusual natural properties which if
correctly stimulated exhibit higher biological reaction rates than other known naturally occurring bacteria. 

    The company believes that HYBACS will be proven to be commercially superior to the majority of existing comparable treatment processes
worldwide, and is able to treat efficiently both municipal wastewater as well as a wide range of organic industrial wastewaters, including
highly concentrated livestock wastewater and the effluent from, among others, breweries, food processors, textile manufacturers, hospitals,
factories and residential developments.

    Bluewater Bio is looking to make sales of its HYBACS technology globally.

    Key benefits of the HYBACS system include: 

    HYBACS produces high quality treated wastewater, treating the biological waste in municipal wastewater down to 10 mg/L BOD (Biological
Oxygen Demand), and up to 99 per cent. treatment of the biological waste in concentrated wastewaters;

    HYBACS requires between five and 15 per cent. less capital expenditure than most widely installed comparable technologies to achieve
these performance qualities on a like-for-like basis;

    HYBACS requires between 22 and 30 per cent. less ongoing operating expenditure based on an overall lower energy consumption requirement
on a like-for-like basis.

    HYBACS is highly suited to plant retrofitting which makes HYBACS more suitable for various types of plant upgrading as compared to many
other advanced modern wastewater treatment processes. In applications where odour levels emanating from the plant may be an issue, the
HYBACS process removes offensive odour without the requirement for additional deodorisation facilities which involve additional capital and
operating expenditures; and

    HYBACS removes approximately twice the concentration of E. coli bacteria, compared to conventional technology which may result in
moderately reduced operating expenditure at sites where disinfection of the effluent is required.
Bluwater Bio (LSE:BWB)
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