re: biodiesel announcement out
Update on Biodiesel Activities The Board of Jupiter Energy Limited (ASX: JPR) (Jupiter Energy) is pleased to provide shareholders with an update on the progress of its planned Malaysian based biodiesel project. As already outlined in earlier shareholder announcements, there are a number of key milestones that the Board has been focused on achieving in recent months. Broadly speaking these can be categorized as follows: • Location • Plant Technology • Supply of Feedstock • Government Licences • Off take Agreements • Corporate Activities This announcement will outline the progress made in each of these areas. Plant Location Jupiter Energy, through its 100% owned Malaysian subsidiary Jupiter Biofuels Sdn Bhd, has reached agreement with the Kuantan Port Authority to lease 6 hectares of land in Kuantan for a period of 30 years on ordinary commercial terms. Kuantan Port is an all weather, deep sea port and has significant existing infrastructure in terms of petro-chemical and palm oil process plants; bulk liquid cargo storage and liquid berth terminals and is located on the east coast of the Malaysian Peninsular. Plant Technology Jupiter Energy, through its 100% owned Malaysian subsidiary Jupiter Biofuels Sdn Bhd, (Jupiter Biofuels), is finalizing negotiations with the European based biodiesel technology provider, Desmet Ballestra Oleo, to acquire a biodiesel plant. Desmet Ballestra was founded in 1946 and currently employs over 600 people, located in offices in 17 countries. Desmet has built 5,700 plants in 148 countries around the world. The company has an annual turnover of Euro 250 million and is one of the leaders in terms of the manufacture and commissioning of biodiesel plants. Desmet Ballestra is currently building plants in Western Europe, North and South America and South East Asia, including Malaysia. The Jupiter Biofuels plant is expected to have an initial capacity of 250,000 tonnes per annum (TPA) and will be based on a continuous transesterification process with the ability to use either Crude or Refined Palm Oil as its feedstock. A 250,000 TPA plant has the capacity to produce some 280 million litres of biodiesel per annum, when running at full capacity. Balance of Plant Contractor Jupiter Biofuels has also entered negotiations with SMEC Malaysia Sdn Bhd in relation to the Balance of Plant contractor role. The Balance of Plant contract will cover all the other key elements to the construction phase including: site works; the tank farm; civil and structural works; mechanical; piping and electrical works; office buildings; service buildings and other key utilities. Feedstock Supply Jupiter Biofuels has received signed letters of intent to enter into supply arrangements from five organisations for the supply of various feedstocks for the production of biodiesel. These organizations are Tradewinds Plantation Bhd, Dominion Square Sdn Bhd, Sawira Bhd Sdn, Kilang Kelapa Sawit Jerantut Sdn Bhd and Pan-Century Edible Oils Sdn Bhd. The contracted quantities will be sufficient to fully support the plant being built in Kuantan and the arrangements will allow for additional supply if and when Jupiter Biofuels considers increasing its production capacity. Government Licences The building of a biodiesel plant in Malaysia requires a range of government licences. The cornerstone licence must come from the Malaysian Industrial Development Authority (MIDA) which is one of the key government bodies in Malaysia overseeing the development of the biodiesel industry. Jupiter Energy is delighted to confirm that MIDA has approved the Jupiter Biofuels application to build a 250,000 TPA plant in Kuantan. Jupiter Biofuels, having obtained this approval, is now working with the other relevant agencies to obtain final approval for tax concessions and other relevant sign offs. Offtake Agreements The Board of Jupiter Energy is currently in discussions with several trading houses in Europe, the USA and South East Asia with respect to offtake agreements for the planned biodiesel production and will make a more detailed announcement on progress in this area in due course. Corporate Activities The Board of Jupiter Energy can confirm that it is their intention to seek shareholder approval to spin off the biodiesel project held within Jupiter Biofuels Limited via an in specie distribution. A meeting of Jupiter Energy’s shareholders will be called to consider and vote on the proposed in specie distribution. For this purpose, a Notice of Meeting will be sent to Jupiter Energy shareholders and this will contain all information required by shareholders to form an opinion on how to vote. The Notice of Meeting is expected to be dispatched in August 2006 for a meeting to be held in September 2006. Jupiter Biofuels Limited will issue a Prospectus to raise the required capital to fund the construction of the plant in Kuantan and the necessary working capital. The Jupiter Biofuels Limited Prospectus is expected to be lodged with the ASIC and ASX in August 2006 and it will be seeking to raise A$70 million via the issue of 140 million shares at an issue price of $0.50 per share. The Prospectus will be based on Jupiter Biofuels Limited having an implied value of $40 million (ie 80 million shares) prior to the capital raising resulting in the shareholders of Jupiter Energy maintaining an approximate 36% interest in the project after the proposed $A70 million raising. In conjunction with advisors Deloitte Corporate Finance Pty Ltd, the Jupiter Energy Board is completing a detailed financial model of the project that will be used to support the financial forecasts to be disclosed in the Jupiter Biofuels Limited Prospectus. This model will be supported, where required, by binding agreements and/or Independent Expert Reports from leading industry consultants. In terms of process, the Board of Jupiter Energy expects to nominate a record date which will be the date on which all shareholders of Jupiter Energy will be able to participate in the in specie distribution. Jupiter Energy shareholders will be allocated at total of 80 million Jupiter Biofuels Limited shares at an implied value of $0.50 per share in recognition of the pre money value of the biodiesel project, being $40 million. These shares will be allocated in proportion to the number of Jupiter Energy shares individual shareholders hold on the record date. The number of Jupiter Biofuels will be calculated by dividing the number of shares on issue in Jupiter Energy as at the record date (which will depend on the number of Jupiter Energy options exercised prior to the record date) by 80 million which is the number of shares in Jupiter Biofuels that will be issued in recognition of the $40 million implied value of the project. The Board believes it is likely that Jupiter Energy shareholders will receive 1 share in Jupiter Biofuels Limited for every 1.61 to 1.88 shares held in Jupiter Energy as at the record date. It is important to note that Jupiter Energy option holders MUST convert their options to shares in order to participate in the in specie distribution of Jupiter Biofuels. A letter will be sent to all Jupiter Energy option holders in due course notifying them of the requirement to exercise their options in order to participate in the in specie distribution. The Jupiter Energy Board is also delighted to announce that the following new Directors have agreed to join the Jupiter Biofuels Limited Board as it prepares for its Initial Public Offering. These new Board members are: Dato' Captain Ahmad Sufian (Independent Non Executive Director) Dato’ Captain Ahmad Sufian is the Chairman of WCT Engineering Berhad, Chairman of Alam Maritim Resources Berhad, a Director of Malaysian Bulk Carriers Berhad (a company listed on the main board of Bursa Malaysia) and the founder and Chairman of GD Express Carrier Berhad, a logistics company listed on the MESDAQ. He has over 35 years experience in the international maritime industry and he served as a Director of Kuantan Port Authority for 14 years. He also served as Kuantan Port Consortium’s first Executive Director and CEO for 2 years. Geoff Clifford (Finance Director) Geoff Clifford holds a Bachelor of Business degree from Curtin University and undertook post graduate studies in Administrative and Secretarial Practice. He has more than 25 years experience in senior accounting, finance, administration and company secretarial roles in the mining, retail, and wholesale industries. He was admitted as a Fellow of the Australian Society of Certified Practising Accountants in 1989 and as a Fellow of the Institute of Chartered Secretaries and Administrators in 1995. Geoff is also vice president of the Western Australian State Council of Chartered Secretaries Australia. He currently sits on the Board of Aztec Resources Limited and is also Chairman of Sino Gas and Energy Limited. The Board is still in discussions with several parties regarding at least one other independent Non Executive Director position and looks forward to making an appointment in the near term. In addition, the Jupiter Biofuels Limited Board will also be made up of: Eddie Smith and Geoff Gander (Existing Jupiter Energy Directors) Eddie Smith will remain on the Jupiter Biofuels Limited board as Non Executive Chairman and Geoff Gander will take on the role of Managing Director of Jupiter Biofuels Limited. Both Eddie and Geoff are existing Jupiter Energy shareholders and promoters of Jupiter Biofuels Limited and as a result will be subject to a 24 months escrow on all the shares they hold in Jupiter Biofuels Limited as a result of the in specie distribution from Jupiter Energy. Any questions relating to this announcement should be directed to Executive Director, Geoff Gander, on 0417 914 137 or via email to [email protected]. ENDS
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