ASX Company News: Australian Renewable Fuels To Acquire Biodiesel Producers

25 January 2011
Published in Blog Trader Dealer

The Board of Australian Renewable Fuels (ARW) is pleased to announce it has signed a non-binding agreement with the Board of Biodiesel Producers Ltd (Barnawartha VIC) with regard to the acquisition of BPL by ARF.

The structure of the acquisition will be predominately based on a non-cash assumption of BPL’s existing convertible note debt (with a redemption value of $21 million) by ARF by the issue of ARF convertible notes on terms to be agreed, but with the payment and structure of the ARF notes linked to the future performance of BPL’s plant over a 5 year period.

ARF expects to complete the transaction without the issue of any further share capital at this stage. The BPL facility has a capacity of 60 million litres per annum, and is well positioned to service the East Coast market. The plant, built in 2008 and operational since that time, is a major supplier of product to various oil companies, as well as the regional market. The addition of the BPL plant will give the ARF overall group a production capacity in excess of 150 million litres per year, and excellent coverage of the main industrial areas of Australia, with the ARF plants (45 million litre capacity each) being located in WA and SA respectively.

“The acquisition of BPL is a major strategic progression for both companies” said Tom Engelsman, Managing Director of ARF “since it allows for the combined entity to fully explore the opportunities in the market place, not only with regard to the use of Biodiesel, but also in related areas of interest. The combination will also substantially enhance the human capital of the business, since both parties have strong and dedicated employees at the various sites”. Andrew White, Managing Director of BPL stated that “the combination will allow the excellent results of BPL to be leveraged across the ARF facilities, and will further allow for the strengthening of the brand which BPL has developed in the market place. I look forward to working with the ARF Board and Management to optimize all of the benefits of the merger”.