Mission NewEnergy (ASX:MBT) has entered into a Memorandum of...

Mission NewEnergy (ASX:MBT) has entered into a Memorandum of Understanding with Benefuel Inc., a U.S. based technology provider which has developed and validated a patented biodiesel production process.

Benefuel is the world’s largest palm oil producer.

MBT's biodiesel refinery will be retrofitted using Benefuel US proprietary “ENSEL®” technology that will allow MBT’s 250,000 tpa biodiesel refinery to be commissioned and operated using lower cost feedstock.

In addition, parties are looking at opportunities to set up a joint venture company in Malaysia to own and operate the biodiesel refinery together with an integrated palm plantation company.

Pursuant to the joint venture, Mission’s Malaysian subsidiary simultaneously signed a Plant Purchase Agreement to sell
its 250,000 tpa biodiesel refinery to the joint venture company for a sum of US$22.5 million.

All conditions precedent to the transaction are expected to be completed by the fourth quarter of 2014.

MBT will utilise a significant portion of the proceeds from the sale for debt reduction, and will set aside $4 million in a designated account pursuant to a consent order recorded by the High Court in Malaysia pertaining to the ongoing Malaysian arbitration proceedings with a contractor.

With the sale of the biodiesel refinery to the joint venture company, the restructuring plan embarked in 2012 will be complete.

MBT will retain a 20% equity stake in the refinery through the joint venture.

The first 100,000 tpa refinery which Mission sold last year is now operating profitability at near full capacity, and MBT expects this second refinery will perform at a higher level.

MBT is currently reviewing several business opportunities, with its focus on income generating businesses with growth potential in the energy, biomass to energy, oil and gas sectors.

The company is capitalised at around $250,000.