synthesis energy news

http://online.wsj.com/article/BT-CO-20110331-709568.html






DOW JONES NEWSWIRES

Synthesis Energy Systems Inc. (SYMX) agreed to receive an $83.8 million cash infusion from Beijing's Zhongjixuan Investment Management Ltd. to support project development and investment in China.

Shares surged 47% to $3.02 premarket. Through Wednesday's close, the stock had more than doubled the past year.

Synthesis said Zhongjixuan will use its 'extensive relationships' in China to help the company develop joint venture businesses to meet the fast-growing country's increasing demand for clean energy based on lower-cost varieties of coal.

Under the deal, Synthesis will issue Zhongjixuan 37.3 million shares, giving it a 43.5% stake in the company. The buyer is entitled to boost its stake to 60% under certain conditions. Synthesis will also add four directors appointed by the company, as well as a managing director named by Zhongjixuan to lead Synthesis' business in China.

The transaction "significantly strengthens the company's balance sheet and provides additional financial flexibility for [it] to execute on its business plan in China and around the world," Synthesis Energy said in a statement Thursday.

Synthesis had $34.2 million in cash and equivalents as of the end of the year. Lower costs have contributed to bottom-line improvements in recent quarters, while revenue, for the most part, has been on the rise.

-By Matt Jarzemsky, Dow Jones Newswires; 212-416-2240; [email protected]