Aug 28, 2013 - Canadian firm Terreno Resources Corp (CVE:TNO) said Tuesday it had sealed a memorandum of understanding (MOU) to acquire Dominican Renewables Inc (DRI) for CAD 2.56 million (USD 2.4m/EUR 1.8m) in stock, seeking to focus on biofuel production in the Dominican Republic.
DRI is a privately-owned firm that makes biofuels. It has been active since 2008. The company owns interest over some lands and agreements for the production of green fuel in the Dominican Republic.
As part of the transaction, the Canadian mining exploration and development company will acquire 100% in DRI in return for total of 51.37 million of its common stock, or two Terreno shares per one DRI share. Terreno will also launch a private share offering of at least 10 million units in connection with the acquisition, with each unit consisting of one common share and a half of a common share purchase warrant. The proceeds will go to back the development of DRI's biofuel project, equipment purchases and to replenish general working capital. Additional funds will be used to cover costs related to DRI's acquisition and for unallocated working capital. Terreno will seek to obtain gross proceeds of up to CAD 250,000 from the share offering.
"The success of this transaction brings near term cash flow potential to Terreno with the ability to scale up the operations in the future,” said Terreno chairman John Icke. Via the deal, the buyer seeks synergies in operating its existing portfolio of mineral exploration projects in Argentina and the Dominican Republic and running DRI, it said.
The acquisition is dependent on signing a definitive agreement, planned for October 31, due diligence results and clearance from the Toronto stock exchange. It is also subject to approval from both companies’ managing boards, completion of the share issue, as well as other conditions.
(CAD 1.0 = USD 0.955/EUR 0.713)
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