new fuel for biodiesel producer

New fuel for biodiesel producer

Australian Biodiesel Group is moving away from producing biodiesel to producing renewable fuels after completing an alliance with White Mountain Group.

Under the agreement, White Mountain will transfer its exclusive worldwide license to the Solverdi processes for producing renewable fuels from waste sources to ABG in return for 10.6 per cent of ABG’s issued capital, or just over 47.4 million shares.

White Mountain will also give ABG a capital injection of $A500,000. “The opportunity that presented itself to ABG in early November of last year has now been realised. Consequently, ABG moves from being a manufacturer of biodiesel, to being a producer of renewable fuels that are to be used to generate distributed renewable electrical energy,” ABG chairman Wayne Rogers said.

Mr Rogers said that electricity generated in this manner would attract renewable energy certificates in Australia as the fuels are produced from waste sourcessuchasoil-contaminated waste water, used cooking oils, and other waste-oil streams.

ABG expects to become cashflow positive by the end of the second quarter of 2009, and move to profitability by the end of the third quarter.

This is due, in part, to White Mountain vesting into ABG a functioning renewable energy plant in the United States in exchange for new shares that make up an additional 37 per cent in ABG.

Newly appointed ABG chief operating officer John Hoffman added that White Mountain is expecting offers from its existing financial partners and is working with ABG financial partners to structure $US3-5 million in debt financing for the first six plants, two of which will be located in Australia.

As part of the agreement, White Mountain managing partner Dennis Danzik has been appointed ABG’s chief executive officer.

ABG will seek shareholder approval for the issue of new shares for the US plant and to change its name to Solverdi Worldwide.

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