Biox terminates land lease deal for New York biodiesel plant
Dec 27, 2012 - Canada-based Biox Corp (TSE:BX) on Monday announced the termination of a land lease agreement for the construction of a biodiesel facility with a capacity to produce 100 million litres a year in New York Harbor.
The decision to drop the project and terminate the agreement with International-Matex Tank Terminals, first announced in June 2012, reflects changes on the biodiesel market, chief executive Kevin Norton said. The supply and demand balance in the US biodiesel market is expected to return to normal and the company keeps its confidence in its Hamilton biodiesel plant, the head noted.
International-Matex Tank Terminals is to return to Biox the USD-4.1-million (EUR 3.1m) letter of credit connected with the planned tank modifications. The Canadian company will also get back USD 1.4 million of the USD-2.1-million upfront payment made to International-Matex Tank Terminals, booking a USD-700,000 termination charge in the first quarter of its fiscal year to September 2013.
The tank services agreement term is reduced by 15 years to 5 years, with 53 months still left, as a result of the termination of the land lease agreement. Biox can utilise the tanks or sub-lease the services during this period.