2nd May 2006 08:08
D1 Oils Plc02 May 2006 D1 Oils Grants Refinery Franchise in Australia and New Zealand Exclusive franchise expected to generate sales of 16 refineries and operating licence revenues from biodiesel production 2 May, 2006 D1 Oils plc (D1), the UK-based global producer of biodiesel, has signed anexclusive franchise agreement which involves the supply of 16 D1 20 refineriesover three years in Australia and New Zealand. Under the franchise D1 is alsoentitled to receive ongoing revenue from operating licence fees for each tonneof biodiesel produced by the refineries. The franchise agreement requires certain key conditions to be fulfilled withineight weeks and also sets out key performance targets to be achieved by thefranchisee to retain exclusivity of the D1 franchise in Australia and NewZealand. Under the terms of the exclusive franchise agreement, the franchisee is requiredto place orders for the first four D1 20 refineries by the end of 2006 and thenfour further refineries each year from 2007 through to 2009. D1 will receive acapital contribution for the sale of each refinery unit of £1.45m, resulting inexpected total revenues of £23.2m from the sale of the 16 refineries. Inaddition the franchisee is required to pay D1 an operating licence fee ofapproximately £200,000 per annum per refinery over the life of the franchise,which has been agreed for an initial ten years. The franchise has been awarded to D1 Australia Limited (D1 Australia), a companyestablished and predominantly owned by local sponsors, Mike Ganon and AndrewMcGuckin. D1 owns a minority stake in D1 Australia of 10%. D1 Australia aims toraise further funds by October 2006 through an Initial Public Offering (IPO) ofshares on the Australian Stock Exchange. Both Mike Ganon and Andrew McGuckinhave strong track records in capital raising in the Australian markets andextensive knowledge of the Australian and New Zealand biodiesel industry. Thefunds raised through the IPO will facilitate the purchase and operation of thefirst four refineries. In addition the franchise agreement also grants D1Australia the right to operate under the D1 brand. D1 will commission and performance test the refineries and train the franchiseeoperational staff at the D1 Refinery Centre in Middlesbrough, UK, and inAustralia. Elliott Mannis, Chief Executive Officer of D1 Oils commented, "The prospects forgrowth in the Australian and New Zealand biodiesel markets are very promising.This agreement gives D1 an immediate presence in Australia and also demonstratesthe capability of our refining technology to potential partners in othermarkets. The franchising of refinery operations is a cost effective means togenerate sales and licence fees in markets where we do not yet have a presence,and we believe that deals of this type will contribute to taking D1 intoprofitability in 2007." Andrew McGuckin, Chief Executive Officer of D1 Australia commented, "We wereattracted to D1 by the modular and flexible nature of the D1 20 refinery, whichwe believe will match the need for refining capacity in the Australian and NewZealand markets, whose strong growth is being underpinned by high local fuelprices, the adoption of an automotive biodiesel standard and governmentincentives. We are proud to be associated with D1, and with their support we arelooking to build an extremely successful business with a long term future. Thefranchise model offers the right balance of incentives for us to access D1'sproven refinery technology and operational support, whilst driving strongbusiness growth. It also has the capacity to deliver sustainable advantages inthe feedstock and distribution areas to D1 Australia, D1 and all other futurefranchisees". Contacts D1 OilsGraham Prince, Communications DirectorMobile: +44 (0) 7973 323840 Brunswick Group Helen Barnes, Associate PartnerTel: +44 (0) 20 7404 5959 D1 Australia Andrew McGuckin, Director and Chief Executive OfficerTel: +61 (0) 407 827 611 Mike Ganon, DirectorTel: +61 (0) 408 928 157 Notes to Editors Exchange rate Operating licence fees referred to above will be payable in Australian Dollarsand have been converted at a rate of 2.5 Aus$ to £1. D1 Oils D1 Oils plc is a UK-based global producer of biodiesel. We are building a globalsupply chain and network that is sustainable and delivers value from"earth-to-engine". Our operations cover agronomy, refining and trading. We arepioneering the science, planting and production of inedible vegetable oils; wedesign, build, own, operate and market biodiesel refineries; and we source,transport and trade seeds and seedlings, seedcake, crude vegetable oils andbiodiesel. Our vision is to be the world's leading biodiesel business. D1 Australia D1 Australia is an Australian-based group which was co-founded by Mike Ganon andAndrew McGuckin to establish a successful and sustainable biodiesel refiningbusiness in Australia and New Zealand based on proven modular technology. D1Australia's franchise agreement with D1 Oils provides exclusive rights toutilise the D1 20 technology and systems owned by D1 Oils and trade under the D1Oils name. D1 Australia's vision is to become the premier biodiesel business inAustralia and New Zealand. Mike Ganon Mike Ganon, age 41, is the Managing Director of Next Level Corporate Pty Ltd, anAustralia-based corporate advisory and deal arranging firm which he founded in2001. Mike has been actively involved in the structured debt, equities andinvestment banking sectors for 17 years. Prior to founding Next Level Corporate,he was Manager, Corporate Finance Group (Western Australia) within MacquarieBank's Investment Banking Group. He has been involved in over A$3.5 billion inequity, structured debt (including chemical processing plants) and M&Aassignments in Australia and abroad. Over the past four years, Mike has provideddeal arranging and fundraising services to alternative energy companies inAustralia and the UK involved in wave energy, wind power, coal seam gas andbiodiesel processing technology. He holds an MBA from the University of WesternAustralia. Andrew McGuckin Andrew McGuckin, age 45, has over 20 years experience in the finance sector inAustralia and the United States. He was a Director of Porter Western Limited, amajor regional stockbroker based in Perth, Western Australia, which was acquiredby Macquarie Bank in 1999. Andrew then joined Macquarie's Equity Capital Marketsdivision where he was involved in a number of capital raisings. Since 2001, hehas been involved in the biodiesel industry, most recently being the ChiefExecutive Officer of a Western Australia-based research and development businessfocused on biodiesel production processes. His qualifications include a Bachelorof Commerce degree from the University of Western Australia. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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