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Amadeus Energy Limited (“Amadeus”, “Company” – ASX: AMU) has today announced that it will fully support the $14.8 million rights issue and placement by its 27% associate company Australian Renewable Fuels Limited (“Arfuels” – ASX: ARW). Arfuels, an Australian biodiesel group with production facilities in Largs Bay SA and Picton WA, announced today the capital raising of $14.8 million, by way of a placement and subsequent rights issue. The funds will be used for infrastructure development associated with the Company's two production facilities, for general working capital and to retire debt. Arfuels also today announced that it had achieved the production and sales targets necessary for it to qualify for the remaining $5.4 million of a Federal Government Biofuels Capital Grant. Amadeus believes this is a key achievement for the group. Amadeus will take up its full entitlement in the rights issue. Participation in the rights issue will be by conversion of existing debt to equity. Amadeus was the founding investor in Arfuels prior to the initial IPO and now holds 27.6% of the ordinary shares of Arfuels as well as debt which will now be converted. Amadeus Managing Director, Mr Geoffrey Towner (who is also Non Executive Director of Arfuels) said the funds raised by Arfuels will enable the Company to continue to expand their production capacity, in order to supply the burgeoning biodiesel market. “We see a great future for the biodiesel market, and Arfuels in particular, which is why we have chosen to participate in the rights issue, and importantly convert debt into equity,” he said. “We are particularly pleased that Arfuels has today achieved the targets necessary to qualify for remainder of the Capital Grant. This is a significant stage in the continuing increase of biodiesel production capacity at Arfuels,” said Mr Towner. “We look forward to participating in the continued growth of the Arfuels business, as it makes a significant contribution to the development of the biofuels market, and the wider renewable energy sector here in Australia and overseas.