LONDON (Alliance News) - Velocys PLC on Monday said it will net USD4.2 million from the transfer of rights for the ENVIA Energy LLC's gas-to-liquids plant in Oklahoma City, US, to another partner in the project.
The UK-listed renewables energy company is a minority equity stakeholder of and the senior secured lender to ENVIA Energy.
As part of the rights transfer agreements, ENVIA will sell parts of the site infrastructure and remove the remaining equipment from the site. Velocys also has agreed to release its liens on all equipment from the site in return for a significant recovery under its collateralised loan note to ENVIA.
The company has received USD2.2 million and an additional USD2 million will be paid upon the completion of several performance milestones related to the removal of equipment.
"We are pleased to have worked collaboratively with the other ENVIA joint venture partners on a mutually beneficial solution, allowing the ENVIA site to be repurposed to a renewable natural gas plant and for Velocys to get a fair reimbursement for its financial contributions to ENVIA, during the strategically critical demonstration of the new full scale Velocys FT reactors over the last two years," said Velocys Chief Executive Henrik Wareborn.
In March, ENVIA signed a deal with Liberty Surplus Insurance Corp and Zurich American Insurance Corp to settle claims relating to the Oklahoma plant. In September 2018, ENVIA halted operations at the plant due to financial problems following a leak the preceding May.
Shares in Velocys were trading 4.7% higher at 4.22 pence each on Monday morning.