BIOX and World Energy Announce Closing of Previously Announced Acquisition of 90 Million USG Biodiesel Facility in Houston
Jun 30, 2016, 17:00 ET
BIOX ALSO ANNOUNCES COMPLETION OF FINANCING AND BOARD CHANGES
TSX symbol: BX
TORONTO and BOSTON, June 30, 2016 /CNW/ - BIOX Corporation ("BIOX") (TSX: BX) and World Energy, today announced the closing of the previously announced acquisition of a 90 million U.S. gallon (USG) (341 million litre) biodiesel production facility in Houston, Texas. Through a 50/50 joint venture, each company has contributed US$10 million to the World Energy BIOX Biofuels joint venture.
The facility, formerly known as Green Earth Fuels, is located within the Kinder Morgan Liquids terminal on the Houston Ship Channel and is the third largest biodiesel production facility in North America. Plant commissioning and start-up will ramp up over the third quarter of the year.
In order to fund its US$10 million contribution to the joint venture, BIOX has received funding from a group of its existing shareholders comprising Clearwater Fine Foods Inc. ("CFFI"), T. Robert Beamish and William Lambert (CFFI, Mr. Beamish and Mr. Lambert being referred to collectively as the "Private Placees"). Messrs Beamish and Lambert are also directors of BIOX. CFFI has provided a six month, secured bridge loan (the "Bridge Loan") for US$5 million. In addition, the Private Placees have subscribed for 5,000 units of BIOX for gross proceeds of US$5 million (the "Private Placement"), with each unit consisting of a secured note in the principal amount of US$1,000 (collectively, the "Notes") and 880 common share purchase warrants ("Warrants") exercisable at a price of $0.673 per common share (being 125% of the volume weighted average trading price for the common shares of BIOX on the Toronto Stock Exchange for the five-day period ended on June 24, 2016). The Bridge Loan and the Private Placement were approved by the independent members of the board. Material terms of these financings are as follows:
- Both the Bridge Loan and the Notes provide for voluntary prepayments without premium or penalty.
- Neither the Bridge Loan nor the Notes are convertible, directly or indirectly, into equity or voting securities of BIOX or any of its subsidiaries, or otherwise participating in nature; or repayable as to principal or interest, directly or indirectly, in equity or voting securities of BIOX or any of its subsidiaries.
- The Bridge Loan and the Notes are secured by a pledge of the interest held by a wholly- owned subsidiary of BIOX in the joint venture company formed to complete the acquisition of the Houston facility.
- The Notes have an initial six-month term that will be automatically extended to June 30, 2018 if shareholders approve the Warrants as discussed below.
- The Bridge Loan bears interest at a rate of 12% per annum from the date of advance to August 31, 2016, at 14% from September 1, 2016 to September 30, 2016, at 16% from October 1, 2016 to October 31, 2016 and at 18% thereafter, payable monthly in arrears.
- The Notes bear interest at a rate of 12% per annum payable quarterly in arrears.
BIOX will convene a special meeting of shareholders to be held on August 24, 2016 to seek approval of the Warrants by shareholders other than the Private Placees. Until this dis-interested shareholder approval is obtained, the Warrants are not transferable or exercisable. If the Warrants are not approved, then
- The Warrants will terminate automatically.
- BIOX will be obligated to pay an Exit Fee at the time the Bridge Loan is repaid in an amount equal to 2% of the face amount thereof if paid on or before September 30, 2016 or 3.5% of the face amount thereof if the Bridge Loan is repaid after September 30, 2016.
- BIOX will be obligated to pay an Exit Fee at the time the Notes are repaid in an amount equal to 2% of the face amount thereof if paid on or before September 30, 2016 or 5% of the face amount thereof if the Bridge Loan is repaid after September 30, 2016.
BIOX Board of Directors Changes
Following the establishment of the World Energy BIOX joint venture, the Board of Directors of BIOX accepted the request of Robert Beamish to retire from the Board. To fill the vacancy created by Mr. Beamish's retirement, the Board has appointed Gene Gebolys, CEO of World Energy. In addition, the Board of Directors has appointed Alan Rickard, the CEO of BIOX, to the board of directors.
About World Energy
World Energy (www.worldenergy.net) is an Advanced Biofuels supplier based in Boston with over 200 million gallons (600,000 metric tons) of production capacity in Pennsylvania, Georgia, Mississippi, and Texas and over 16 million gallons of biofuels storage servicing major markets in North America and beyond.
About BIOX Corporation
BIOX is a renewable energy company that owns and operates approximately 450 million litres of nameplate biodiesel production capacity at plants located in southern Ontario and Houston, Texas. 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.
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 timeline for the World Energy BIOX Biofuels facility commencing production, the capacity of and anticipated upgrades to the facility and timing thereof. 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. To the extent any forward-looking statements herein constitute financial outlook, they were approved by management as of the date hereof and have been included to provide an understanding with respect to BIOX's financial performance and are subject to the same risks and assumptions referred to herein. There can be no assurance that the plans, intentions or expectations upon which these forward-looking statements are based will occur and readers are cautioned that any financial outlook information contained in this news release should not be used for purposes other than for which it is disclosed herein.
SOURCE BIOX Corporation
For further information: Alan Rickard, CEO, BIOX Corporation, 905-521-8205 ext. 253, [email protected]; Brendan Marusa, Vice President, World Energy, 617-889-7320, [email protected]
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