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16 May 2008 16:35
Biofutures International plc
('Biofutures' or 'the Company')
Land in Malaysia
On 16 May 2008 Zurex Corporation Sdn Bhd ("Zurex") a wholly owned Malaysian subsidiary of Biofutures entered into two interrelated agreements with POIC Sabah Sdn. Bhd. ("POIC").
The first agreement ("Termination Agreement") rescinded an existing contract between Zurex and POIC whereby Zurex had agreed to acquire a 50 acre plot of land ("50 Acre Plot") within Phase 1 of POIC's Lahad Datu site for Malaysian Ringgit ("RM") 26,136,000 (approximately £4.15m) ("Original Agreement").
Under the second agreement Zurex has contracted to acquire a 14 acre plot of land ("14 Acre Plot") from POIC within Phase 1 of POIC's Lahad Datu site for RM 7,318,080 (approximately £1.16m) ("Sale and Purchase Agreement").
Under the Termination Agreement, subject to the Sale and Purchase Agreement being entered into and with payments being made as described below, neither party to the Original Agreement has any claim whatsoever against each other and the Original Agreement is rescinded with no further effect.
Zurex had paid RM 7,840,800 (approximately £1.25m) towards the purchase of the 50 Acre Plot with the balance of the purchase consideration of RM 18,295,200 (approximately £2.91m) outstanding. POIC has agreed with Zurex that the funds paid to-date by Zurex will be used to acquire the 14 Acre Plot for RM 7,318,080 (approximately £1.16m), plus interest of RM 519,140 (approximately £82,400) with the balance of RM 3,580 (approximately £570) offsetting part of the fees payable by Zurex to POIC in respect of the transaction which total RM 21,400 (approximately £3,400). The outstanding RM 17,820 (approximately £2,830) will be paid to POIC by Zurex in cash. It is the opinion of the Directors that the 14 Acre Plot being acquired is a fair value for the land based on the compromise reached with POIC.
Zurex originally contracted to acquire the 50 Acre Plot in order to develop a 200,000 tonnes per annum palm oil biodiesel plant (the "Plant") leaving room for expansion. As previously announced the board of Biofutures is currently reviewing the economic viability of this project and negotiations are taking place with a view to re-engineering it. The Termination Agreement and the Sale and Purchase Agreement together form part of the re-engineering process and at the same time leave the Directors with sufficient acreage to build the Plant should the project prove to be economically viable while allowing the Company to retain RM 18,277,380 (approximately £2.90m) which would otherwise have been spent on acquiring the 50 Acre Plot.
For the purposes of this announcement an exchange rate of RM 1 to approximately £0.1588 has been used
For further information please contact:
Julie Pomeroy, Finance Director
Biofutures International Plc 0117 920 0092
Emily Morgan, Blomfield Corporate Finance 01275 871 717
Paul Vann 0117 920 0092
Winningtons Financial PR
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