(Sharecast News) - Sabien Technology Group updated the market on contract progress with the South Korea-based City Oil Field and B.grn Group on Wednesday.
The AIM-traded firm had previously announced City Oil Field as a partner, that specialises in recycling waste plastic into fuel products and naphtha, while it also owns 33% of the B.grn special purpose vehicle.
On 26 October, B.grn and City Oil Field signed a binding contract for the supply of the first regenerated green oil (RGO) system into the UK, with Sabien as the sales agent under the agreement.
Under the deal, Sabien said B.grn would responsible for securing, funding and developing a suitable site, and for procuring all necessary equipment from City Oil Field, while City Oil Field was bound to supply the contracted system at the price set out in the agreement under engineering, procurement, and construction contract terms.
B.grn had now paid a fee to City Oil Field to formalise the contract, with the agreement conditional on B.grn raising the required funding and entering into an engineering, procurement and construction deal within one year, unless an extension is mutually agreed.
In addition, Sabien noted that B.grn had announced and started a fundraising round to capitalise the special purpose vehicle, issued a formal expression of interest in a site in the Midlands, commissioned an architect to design the necessary buildings on the target site, and entered into memorandum of understanding discussions to install RGO facilities in multiple countries in addition to the UK.
Sabien said it would have no liability under the agreement, nor would it have any requirement to provide funding to B.grn.
The board warned that there could be "no certainty" that B.grn would be able to raise the required funds, though they said they believed it was "probable" that an agreement would be completed.
As a shareholder in B.grn, Sabien said it would also profit share in its earnings from future operations.
"The signing of the agreement followed a successful visit by executives from City Oil Field and the Korean Environmental Corporation to the UK between 24 and 26 October," said Sabien chairman Richard Parris.
"After meetings in the Palace of Westminster, a dedicated trade summit, visits with Cambridge and Birmingham Universities, engagements with city councils and the inspection of a target site, the parties to the contract agreed that the time was right to move from a discussion phase to the start of business execution.
"As interested parties, I will keep Sabien investors updated on b.grn's production roll-out plans."
At 1323 GMT, shares in Sabien Technology Group were up 2.65% at 12.57p.
Reporting by Josh White for Sharecast.com.
Sabien Tech. (SNT)