AUSTRALIAN RENEWABLE

FUELS LIMITED

PO BOX 119

ABN 66 096 782 188 SUITE 3

IB ANGOVE ST
NORTH PERTH WA 6006

NORTH RERTH WA 6906 TEL + 61 B 9327 7688 FAX + 61 8 9227 0101 EMAIL [email protected]

WEB www.ortuels.com.ou

Wednesday 30 April 2008

ASX Release

The Manager Companies Announcements Platform ASX Limited Level 4, 20 Bridge St SYDNEY NSW 2000

Dear Sir/Madam,

Renounceable Rights Issue

The Directors of Australian Renewable Fuels Limited ("ARF" or "Company" - ASX Code: ARW) are pleased to announce that it will undertake a Renounceable Rights Issue to shareholders on the basis of 5 new shares for every 7 shares held on the record date, at an issue price of 2.5 cents for each new share.

The Rights Issue will be fully underwritten by Patersons Securities Limited subject to completion of formal documentation. The Issue will raise approximately \$3.075 million (before expenses) from the issue of approximately 123.0 million shares. The Company is presently finalising an underwriting agreement and a transaction specific prospectus which will include full details of the Rights Issue.

The net proceeds raised from the Rights Issue will be used to retire existing bank debt and augment working capital.

The Investor Presentation is attached.

A proposed timetable for the Rights Issue will be announced once the dates are finalised.

Directors' Recommendation

The Directors encourage you to support the Rights Issue.

For further information, please contact:

Australian Renewable Fuels Limited Tania Oosterhof Company Secretary T: 08 9227 7688 E: [email protected]

ENDS

ATTURES

Investor Presentation

April 2008

STRICTLY PRIVATE & CONFIDENTIAL

regulated disclosure document under the Corporations Law. This information is provided to you for the purpose of considering such an offer and should not be circulated to any other This presentation is limited to persons to whom offers may be made that do not need a person.
respect to those securities. No agreement to subscribe for securities in the Company will be This presentation has been prepared by and issued by Australian Renewable Fuels Limited under section 708 of the Corporations Act, does not need a regulated disclosure document. ("ARF"). It should not be considered as an offer or invitation to subscribe for or purchase entered into on the basis of this presentation. Any offer, when made will be an offer that, any securities in the Company or as an inducement to make an offer or invitation with
order to satisfy yourself as to the accuracy and completeness of the information, statements overview of ARF does not purport to be all inclusive or to contain all information which its prospects. You should conduct your own investigation and perform your own analysis in You should not act or refrain from acting in reliance on this presentation material. This recipients may require in order to make an informed assessment of the Company's and opinions contained in this presentation and making any investment decision.
you on the condition that you do not reproduce or communicate it or disclose it to, or discuss The contents of this presentation are confidential. This presentation is being provided to it with, any other person without the prior written permission of the Company.

arfuels

AUSTRALIAN RENEWABLE
FUELS LIMITED

Company Background

becoming the leading biodiesel producer in the country Listed on the ASX in May 2005 with the objective of
Commissioned two 45m litre p.a. biodiesel plants in Adelaide and Picton at a cost of \$46m
Since listing two major factors beyond the Company's control have led to difficulties experienced by the biodiesel industry in Australia
The effective removal of recovery of excise from biodiesel blends exceeding 20% biodiesel $\overline{1}$
The doubling of feedstock prices in the past 6 months due to burgeoning demand from China
As a result the Company placed both of its biodiesel plants on care and maintenance as it re-evaluates its position j.
The Company has determined that any future production of has entered into a term sheet for the supply of biodiesel on biodiesel will be on a job lot/cost plus basis and to this end this basis

Issued Capital

172.2m Shares
ARWO exercisable 24 April 2009 @ 60¢ 48.0 m Options $\overline{1}$
6.1m unlisted employee share options
- Various exercise dates and prices $\overline{1}$

Share Price	6.56
Market Capitalisation	\$11.2 m
Bank borrowing facility	\$1.7m
Bank amount repayable at
conclusion of Rights Issue	\$1.6m

Major Shareholders at 3 April 2008

	Amadeus Energy	24.67%
Ē	Australian Enterprise Holdings Pty Ltd 9.54%
E	Local Government Super	8.08%
E	MF Custodians Ltd	6.54%

Directors

Robert Scott Chairman
Glyn Denison
Geoffrey Towner

Directors shareholding (direct and indirect) 24.86%

Top 20 Shareholders

72.12%

artuels

AUSTRALIAN RENEWABLE
FUELS LIMITED

	Financial Status
	and maintenance but holding a core team of people together, monthly overheads have been reduced to \$140,000 per month Since placing both plants on care
$\blacksquare$	In December 2007 ARF wrote down the carrying value of both plants by (\$26.4m) to \$10.3m and had inventories of biodiesel, feedstock and reagents of \$1.9m
п	Fuel stocks in Adelaide have a current realisable value of \$0.5m and are being systematically liquidated with sales to Caltex and SAFF
	The carrying value as at 31 December 2007 of the Adelaide plant and the Picton plant and land was \$10.3m
в	No other debts besides trade creditors and accruals The Company's debt position is currently: - \$1.6m HSBC loan \$0.4m Government loan I
E	The 31 December 2007 show Net Assets of circa \$11.1m which equates to circa 6.5 ¢ps and management accounts as at 29 February 2008 show Net Assets of circa 6.0 ¢ps
п	approximately \$7.15m as part of the Federal Government Biofuels Capital Grants Program One of ARF's subsidiary companies, ARF Adelaide Pty Ltd has a contingent liability of
П	This contingent liability lies exclusively with ARF Adelaide Pty Ltd. ARF Limited has a \$25m loan to ARF Adelaide which would rank equally with the Federal Government Grant in the dispersal of asset sale proceeds

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Rationalise operations to reduce cash burn and align expenditures to the extent possible, directly with revenues
the market that in the Term Sheet the parties agreed to construct blending infrastructure to be situated at the customer's mine site for storage of ARF supplied biodiesel. These obligations are subject to ARF procuring fun minimum quantity of 5m litres of biodiesel pa with a target volume of 7.5m litres pa for a continuous period
of 5 years into a viable commercial contract. In a release to the ASX on Friday 18 April 2008 ARF informed Advance the Term Sheet with a prominent West Australian resource company that outlines the supply of a
Eliminate all bank debt (except for any debt arising from the construction of the tank infrastructure under the
Term Sheet referred to above) from the rights issue proceeds and liabilities generally with non core asset sales
Dispose of non core assets in an orderly fashion to realise maximum as opposed to forced sale value $\blacksquare$
Develop a go forward strategy that can begin restoring shareholder value by having flexibility to participate in a recovery in the biodiesel market without significant financial exposure
ARF Inc. holds 100% rights for 15 years to the Energea technology for the North American Free Hold 64% equity holding in US subsidiary American Renewable Fuels Incorporated (ARF Inc.) Trade Zone. $\overline{1}$
ARF does not intend to invest any additional capital in ARF Inc. and interest may therefore be diluted

ortuels

AUSTRALIAN RENEWABLE FUELS LIMITED

Dispose of the Adelaide plant where the Company is presently fielding enquiries from several potential purchasers. The plant will be sold on receipt of a satisfactory offer.
on which the Adelaide plant including storage tanks is situated. The storage tanks have net Lease out the Adelaide tank farm - ARF is currently negotiating a 25 year lease of the land rental income potential of circa \$300,000 per annum
Sell remaining inventory at Adelaide for circa \$0.5 m to Caltex and SAFF
Sell land at Picton with indicative valuation of \$3.1m and lease back the portion occupied by the Picton plant
Commercialise the existing Term Sheet and seek to secure additional "cost plus" contracts to produce biodiesel on a job lot basis for dedicated larger user style customers from the Picton plant
Continue to rationalise and reduce costs wherever possible without losing key operational and maintenance capacity.
Raise up to circa \$3.1m via a Rights Issue to retire existing bank debt and provide sufficient working capital to allow the Company to go about the short term actions in an orderly manner

arfuels AUSTRALIAN RENEWABLE
FUELS LIMITED

Details Of Rights Issue

Key Terms

· Pro rata renounceable Rights Issue
5 new shares for every 7 shares held at an issue price of 2.5 $\phi$ ps to raise circa $$3.1m$ $\frac{1}{2}$
Proposed capital structure of the Company post issue: j.

ssued Capital	Shares	Options
Existing Shares	172.2 m	54.1 m
Rights Issue 5:7	123.0 m	ī
Total	295.2 m	54.1 m

arfuels AUSTRALIAN RENEWABLE
FUELS LIMITED

Proposed \$3.1m Rights Issue

Purpose of the issue:
Retire existing bank debt HSBC \$1.6m (expected liability at repayment date) $\overline{1}$
Provide working capital to allow the Company the opportunity to dispose of the non core assets in an orderly fashion increasing the probability of getting a better price. $\overline{1}$
Position the Company to enter job lot production on a cost plus basis because it is commercially sound $\overline{1}$
ARF anticipates that the orderly sale of the non core assets within the framework of its short term business plan could realise up to circa \$6m, which would provide the Company with the capacity to actively seek opportunities to create value for shareholders. $\blacksquare$

arfuels AUSTRALIAN RENEWABLE
FUELS LIMITED

ARF and its Controlled Entities Consolidated Balance Sheets

value of the assets resulting in a Net Asset position of \$11.1m which equates to At 31 Dec '07 the Board wrote down the carrying circa 6.5¢ps $\blacksquare$
proposed rights issue the pro which equates to circa 4.4 increases to circa \$12.9m forma Net Asset position Upon completion of the $\epsilon$ ps j.
$$15.0m$ (circa $5.16ps$ ) with a Net Asset position towards values would increase the assets for the anticipated The sale of the non core cash component of circa $$7.0m.$

	Audit	(Unaudited)	Pro-forma Balance
	Reviewed at 31 Dec 2007	Management A/Cs at 29 Feb 2008	Sheet after \$3m Rights Issue
	\$'000	\$'000	\$'000
Current Assets
Cash and cash equivalents	452	173	982
Trade and other receivables	43	756	756
Other assets	573	216	216
Inventories	2,997	2,482	2,482
Total Current assets	4,065	3,627	4,436
Non-current assets
Property, plant & equipment	10,257	9.967	9,967
Total assets	14,322	13,594	14,403
Current liabilities
Trade and other payables	780	999	999
Borrowings	1,914	1,841
Total current liabilities	2,694	2,840	999
Non-current liabilities
Payables	8	SS	S9
Borrowings	400	400	400
Total non-current liabilities	499	459	459
Total liabilities	3,193	3,299	1,458
Net Assets	11,129	10,295	12,945
Equity
Contributed Equity	99,665	99,592	102,242
Reserves	120	120	120
Accumulated losses	(88, 656)	(89, 417)	(89, 417)
	11,129	10,295	12,945
Minority shareholder interest	$\mathbf{r}$
Total Equity	11,129	10,295	12,945
Shares on Issue	172.2m	172.2m	295.2
NAPS	6.5¢	6.0¢	$4.4 \notin$

AUSTRALIAN RENEWABLE
FUELS LIMITED

arfuels

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Upon completion of the \$3.1m Rights Issue and having paid off all existing bank debt of \$1.6m, ARF's pro-forma balance sheet is expected to show net cash of circa \$1m $\blacksquare$
The sale of the Adelaide plant is anticipated to realise \$4m $\blacksquare$
The continued sale of inventory at Adelaide is expected to realise \$0.5m $\overline{a}$
The sale of land at Picton is anticipated to realise \$3.1m j.
customers, it is anticipated that the purchase of feedstock and reagents to produce the job lot In the event that ARF secures appropriate "cost plus" job production contracts from quality production would involve up to \$1m of working capital over a period of 4 months $\blacksquare$
The "on lease" of the Adelaide tanks is likely to generate net revenues of \$300,000 pa

arfuels AUSTRALIAN RENEWABLE
FUELS LIMITED

The Rights Issue allows ARF to pay off all existing bank debt so as to allow it to be largely debt free with working capital
The orderly liquidation of non core assets over a period of time could result in the net cash in the balance sheet increasing to \$7.0m, which would imply cash of circa 2.4 ¢ps within a Net Asset framework of 5.1 ¢ps
the Adelaide tank farm and interest income ARF believes it can become cashflow positive By only undertaking "cost plus" job lot production at Picton in conjunction with the lease of
This would position ARF to benefit from positive developments in the biodiesel market given that the replacement cost of the Picton plant in the cost overrun / construction constrained West Australian economy might run to \$30m
Additionally, it has accumulated considerable relevant IP and operational know-how which Owns the Energea technology rights to the "Australian region" which includes Australia, New Zealand, Papua New Guinea, Torres Strait Islands and the Solomon Islands. could be exploited to provide revenue opportunities in the future
The Company will consider and review opportunities that are presented to it that might be rewarding for shareholders

artuels

AUSTRALIAN RENEWABLE
FUELS LIMITED

Australian Renewable Fuels Limited

[email protected]

AI assistant

THORNEY TECHNOLOGIES LTD Capital/Financing Update 2008