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20 Feb 2009 09:07
Biofutures International plc
("Biofutures" or the "Company")
Refinery Contract
20 February 2009
Further to the announcements of 4 and 17 November 2008, in which the Company confirmed the grant of a refinery licence in favour of Zurex Corporation Sdn. Bhd. ("Zurex"), a wholly owned subsidiary of the Company, from the Malaysian Ministry of International Trade and Industry and satisfactory completion of due diligence in relation to the building of a 200,000 metric tonne per annum palm oil refinery plant (the "Refinery") on 14 acres of land owned by Zurex at POIC Lahad Datu in Sabah, Malaysia, the Company is pleased to announce that Zurex has today entered into a contract (the "Contract") with WS Bioengineering Pte. Ltd. ("WS Bio") for the construction and commissioning of the Refinery (other than the refining process system and certain related equipment, which is to be supplied separately) (the "Project").
Under the terms of the Contract, WS Bio has agreed to act as a turnkey contractor for the Project, which is to be completed within fifteen (15) months. The fixed value of the Contract is RM30.2 million (approximately £5.8 million at current exchange rates) of which 30 per cent is payable within seven (7) days from the date of the Contract and the balance in stages as the Project progresses to completion.
Yong Khai Weng is a director of both WS Bio and Zurex (although he is not a director of Biofutures) and, accordingly, the Contract represents a related party transaction for the purposes of the AIM Rules. The directors of Biofutures consider, having consulted with Blomfield Corporate Finance Limited, the Company's AIM nominated adviser, that the terms of the Contract are fair and reasonable insofar as the shareholders of the Company are concerned.
The total build cost of the Refinery is now expected to be between RM36 million and RM40 million and the Refinery is scheduled to be operational by 30 June 2010. Negotiations are currently being held with banks in Asia to secure loan facilities to cover the build and other associated costs, although the Company has sufficient cash resources to fund the majority of the expenditure. Working capital facilities will also be required.
The London Stock Exchange has been consulted and has confirmed that the obligation to invest £5.8 million in the Project under the Contract represents implementation of the Company's investment strategy as approved by shareholders on 6 June 2008. On that basis, trading in the ordinary shares of the Company on AIM will not be suspended on 7 June 2009, as would otherwise have occurred under Rule 15 of the AIM Rules for Companies.
For further information please contact:
Julie Pomeroy, Finance Director
Biofutures International plc
07936 848 343
Derek Crowhurst
Blomfield Corporate Finance Limited
020 7489 4500
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