Lignol to boost interest in Aussie firm Territory Biofuels

Aug 19, 2013 - Canadian biorefining technology firm Lignol Energy Corp (CVE:LEC) said Monday it might invest up to AUD 1 million (USD 921,000/EUR 691,000) to boost its stake in Territory Biofuels Ltd (TBF) -- the owner of Australia’s largest biodiesel plant.

The transaction could bring Lignol’s interest to some 68% on a fully diluted basis, it calculates.

The plan calls for Lignol to provide AUD 500,000 to TBF in the form of a first-tranche equity financing, including AUD 200,000 that have already been paid and AUD 300,000 due by September 15. After that, other TBF shareholders will be given the opportunity to subscribe for AUD 500,000 more in stock as part of the second tranche of the equity financing. Lignol has agreed to take up any shares that remain unsubscribed following the round’s closing at end-October.

Lignol will finance the investment in that “potentially a very profitable business” through a recently agreed revolving credit facility.

TBF's Darwin facility, with an annual production capacity of 150 million litres (39.63 million gallons) of biodiesel, is expected to resume work later this year, Lignol's chairman and CEO Ross MacLachlan said. The company will make upgrades that will allow the facility to process lower cost feedstocks and thus boost its profitability in 2014, according to the company head.

(AUD 1 = USD 0.921/EUR 0.691)

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