BIOX exercises option to terminate land lease at New York Harbor
TSX symbol: BX
TORONTO, Dec. 24, 2012 /CNW/ - BIOX Corporation (BIOX) (TSX: BX), a renewable energy company that designs, builds, owns and operates biodiesel production facilities, today announced it has exercised an option which allows the Company to terminate the land lease agreement with International-Matex Tank Terminals (IMTT) to construct a 100 million litre per annum biodiesel production facility in New York Harbor.
"We remain confident in the growth opportunities available to us in the market. However given the significant change in the biodiesel market dynamics since we announced the IMTT agreement in June 2012, terminating the land lease agreement is the responsible decision," said Kevin Norton, Chief Executive Officer of BIOX. "We also remain confident in the value of our Hamilton production facility, especially as we anticipate the market conditions in the U.S. biodiesel market will return to a rational balance between supply and demand. We believe the challenges the biodiesel market has endured in 2012 are short-term issues that reflect the maturing of a relatively nascent sector. As the market evolves we will be in a better position to move quickly at that time to pursue our growth strategies."
Based on BIOX's decision to exercise the option to terminate the land lease agreement, IMTT has agreed to return, in full, the US$4.1 million letter of credit related to the proposed tank modifications. BIOX will also be reimbursed US$1.4 million of the US$2.1 million upfront payment it made to IMTT. The net difference of US$0.7 million will be expensed as a termination charge recorded in the first quarter of fiscal 2013.
Exercising the option reduces the term of the tank services agreement from 20 years to 5 years, with 53 months remaining. BIOX is able to utilize the tanks or sub-lease the tank services during the remaining term of the agreement.
The cumulative impact of exercising the option to terminate will increase BIOX's unrestricted cash position by approximately $5.5 million. Depending upon the timing of its receipt, this amount will be reflected in the Company's cash position in either the first or second quarter of fiscal 2013.
About BIOX Corporation
BIOX is a renewable energy company that designs, builds, owns and operates biodiesel production facilities. BIOX currently owns and operates a biodiesel production facility in Hamilton, Ontario, Canada with a nameplate capacity of 67 million litres per year. BIOX has an innovative, proprietary and patented production process that is capable of producing the highest quality, renewable, clean burning and biodegradable biodiesel fuel utilizing a variety of feedstocks - from pure seed oils to animal fats to recovered vegetable oils with no change to the production process. BIOX's high quality biodiesel fuel meets North American (ASTM D-6751) quality standards. BIOX is Canada's largest biodiesel producer and is focused on building, owning and operating a network of commercial scale biodiesel production facilities in jurisdictions where clearly defined renewable fuel standards policies exist.
Certain statements in this press release constitute "forward-looking" statements that involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance, objectives or achievements of BIOX, or industry results, to be materially different from any future results, performance, objectives or achievements expressed or implied by such forward-looking statements. Such statements relate to, among other things, the return to BIOX of US$5.5 million and BIOX's long-term expectations for the biodiesel market in light of current market conditions. These statements reflect BIOX's current views regarding future events and operating performance, are based on information currently available to BIOX, and speak only as of the date of this press release. These forward-looking statements involve a number of risks, uncertainties and assumptions and should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such performance or results will be achieved. Those assumptions and risks include, but are not limited to, the fact that BIOX's results of operations and business outlook are highly dependent on a mix of legislation and producer payment programs and tax credits and upon commodity prices, which are subject to significant volatility and uncertainty. Many factors could cause the actual results, performance or achievements of BIOX to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including factors described in this press release and those discussed in BIOX's publicly available disclosure documents, as filed by BIOX on SEDAR (www.sedar.com) except as updated herein. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described in this press release as intended, planned, anticipated, believed, estimated or expected. Unless required by applicable securities law, BIOX does not intend and does not assume any obligation to update these forward-looking statements.
SOURCE: BIOX CorporationFor further information:
Executive Vice President & CFO
Phone: (905) 337-4970
Phone: (416) 815-0700 ext. 238