10th Dec 2009 14:27
Biofutures International plc
("Biofutures" or the "Company")
Process System Contract
10 December 2009
Following the announcement on 20 February 2009, Biofutures is now pleased to announce that its wholly owned subsidiary, Zurex Corporation Sdn. Bhd. ("Zurex"), has today entered into a contract (the "Contract") with WS Bioengineering Pte. Ltd. ("WS Bio") for the supply of a complete physical refining plant system capable of refining crude palm oil into refined bleached and deodorized palm oil (the "Refining System") for the 200,000 metric tonne per annum palm oil refinery plant (the "Refinery") currently being constructed by WS Bio on the 14 acre site owned by Zurex at POIC Lahad Datu in Sabah, Malaysia.
The fixed value of the Contract is RM7.28 million (approximately £1.3 million at the current exchange rate), of which 30 per cent (the "Initial Payment") is payable within seven (7) days from the date of the Contract and the balance in the form of a full irrevocable and confirmed letter of credit ("LC") in favour of WS Bio, which WS Bio is entitled to present for payment upon presentation by WS Bio of complete shipping documents in respect of the machinery, equipment and items to be supplied by WS Bio as part of the Refining System under the Contract. WS Bio is required to complete the supply of the Refining System within eight (8) months of receipt of the Initial Payment and the LC.
WS Bio is also the turnkey contractor for the construction and commissioning of the Refinery and the directors of Biofutures consider that the award of the Contract to WS Bio will lead to an effective and coordinated implementation of the entire project.
Yong Khai Weng is a director of both WS Bio and Zurex (although he is not a director of Biofutures) and, accordingly, the Contract represents a related party transaction for the purposes of the AIM Rules. The directors of Biofutures consider, having consulted with Blomfield Corporate Finance Limited, the Company's AIM nominated adviser, that the terms of the Contract are fair and reasonable insofar as the shareholders of the Company are concerned.
Biofutures is also pleased to announce that Zurex has been offered a bank facility by Bank Kerjasama Rakyat Malaysia Bhd., a licensed bank in Malaysia, for the aggregate sum of up to RM47 million (approximately £8.3 million at the current exchange rate) consisting of two tranches, of which RM28.8 million is for capital expenditure and RM18.2 million for working capital. All remaining conditions precedent as imposed by the bank can be met and Biofutures expects to be able to drawdown soon.
The Board now considers that the refinery plant will not be operational until 30 September 2010, such delay being attributable to the negotiations and commencement of arbitration proceedings with JJ-Lurgi Engineering Sdn Bhd and the time taken to agree the bank facility against the backdrop of the current difficult economic environment.
The total cost to build the refinery plant, including this Contract, is expected to be between RM38 million and RM40 million. This is in addition to the costs that had been incurred prior to the cessation of the biodiesel project.
For further information please contact:
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Enquiries: |
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Julie Pomeroy, Finance Director |
Biofutures International plc |
Tel: 07747 624 199 |
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Derek Crowhurst |
Blomfield Corporate Finance Limited |
Tel: 020 7444 0800 |
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Daniel Briggs |
Religare Hichens, Harrison plc |
Tel: 020 7444 0500 |
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