BFC Biofuels

RNS Number:8233S
Biofuels Corporation PLC
13 March 2007



Biofuels Corporation plc
(the "Company")


Trading Update and Financing


Current Trading


In December 2006, the Company confirmed that trading conditions had recently
been impacted by a combination of lower mineral oil prices and increased input
costs, specifically vegetable oils and methanol.  The decision was taken to
limit production levels by only taking on contracts that provided acceptable
margins or, in the absence of such contracts, to focus on reprocessing
intermediate product and sales of refined glycerine.


Current market conditions and the immediate outlook have not improved.
Consequently, biodiesel production levels, which have been intentionally
restricted allowing intermediate product to be reprocessed, were in January and
February running at 25% of plant nameplate capacity and will remain low for the
immediate future.  This, together with increased manufacturing costs, arising
from a number of previously advised technical issues, will lead to the results
for the year to 31 March 2007 being materially worse than market expectations.


The technical issues referred to above are being addressed through a clearly
defined remedial engineering programme focussed on the intermediate product
reprocessing unit for which the Board has agreed further capital expenditure of
#1.5 million. Contingency has been provided in financing plans over the next 12
months for an additional #1 million to cover possible technical enhancements.
The Company has initiated a claim against its previous technology provider,
Energea, for plant design failures.



In the lead-up to the introduction of Renewable Transport Fuel Obligation (RTFO)
mandation in April 2008, the Company believes that margins should recover from
the current unsustainable levels and that the Company, with a proven and
on-stream plant, will be well placed to take advantage of such a recovery. The
company believes that the current weak market conditions, which are affecting
the biodiesel sector as a whole, could restrict industry capacity and supply on
the introduction of the RTFO.


Financing


The Company also announced in December that its on-demand banking facilities had
been rolled over to 30 June 2007.


As previously advised, whilst the Company remains within its on-demand debt
facilities, it will require additional funding from the beginning of April 2007.
The Company had said that this was expected to be not less than #10 million to
31 December 2007.  Against the backcloth of a weaker market, additional
remediation costs and a lack of clarity on the timing and extent of any market
recovery, the Company now expects this funding requirement to be between #16
million and #25 million.


The Board is advancing discussions with the Company's bankers, who remain
supportive, regarding short term cash requirements and continues to thoroughly
investigate a range of options to restructure the current debt in order to
secure the Company's longer term future.


                                                                   13 March 2007

ENQUIRIES:


College Hill                020 7457 2020

Mark Garraway

Gareth David


                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

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