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Past ASX Release
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19 September 2005 AUSTRALIAN CONSORTIUM ALLIANCE AGREEMENT The Directors of Advanced Engine Components Ltd ("AEC") are pleased to announce that AEC has signed an Alliance Agreement with Motive Energy Pty Ltd ("Motive"). Motive was formed, in April 2004, as a supplier of fleet services for natural gas fuelled vehicles. Motive’s operations integrate the supply of refuelling facilities, fuel, fleet management services, engine products, and vehicles. Motive has brought together key participants, within their relevant industries, to maximise the commercial opportunities for natural gas fuelled vehicles throughout Australia and New Zealand. As well as AEC, other alliance participants include Major Motors Pty Ltd, WA Fork Truck Distributors Pty Ltd and National Power Services Pty Ltd. Through the Alliance Agreement, and subject to meeting performance criteria on related contracts, AEC has the right to acquire an 8.3% equity interest in Motive. Other major shareholders in Motive are National Power Services Pty Ltd and E-Motive Holdings Pty Ltd. Pursuant to the Alliance Agreement, AEC will re-configure six pre-production Isuzu truck engine applications to enable the use of natural gas as the source of fuel. The engines will satisfy stringent Australian standards including greenhouse gas emission levels and be at least equivalent to the Original Equipment Manufacturers product standard. AEC will invoice Motive an agreed amount for AEC's engine and truck development services. Development of the first three engine applications is nearing completion. The first engine has been re-installed in an Isuzu truck, satisfied tests in terms of power and torque, and returned to Motive. A further two natural gas engines will be installed, road tested and returned to Motive by the end of October 2005. The final natural gas engine will complete road tests and be returned to Motive in November 2005. AEC is entitled to subscribe for shares in Motive as each engine development is completed. The total subscription value will not exceed the revenue earned by AEC for providing engine and truck development services to Motive. Pursuant to the Alliance Agreement, AEC will also provide Motive with ongoing technical support and an ongoing supply of engine components. The supply components include AEC’s Natural Gas Vehicle System incorporating AEC patented electronic control unit and injectors. AEC will benefit as a strategic shareholder in Motive and from the on going supply of technical support and engine components. It is expected AEC’s supply of NGVS components to Motive, over a four year period commencing December 2005, will create sales revenue to AEC in a range of $20 million to $34 million. For further
information please contact:
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