TIDMBION
RNS Number : 8013F
Bion PLC
19 November 2020
19 November 2020
BiON plc
("BiON" or "the Company")
BiON to establish consortium to accelerate expansion of biogas
activities in Malaysia
BiON (AIM: BION), an environmental engineering, wastewater
treatment and renewable energy solutions company, announces that it
has today signed a number of non-binding Memorandums of
Understanding ("MOUs") with three parties, with complementary
expertise and resources in the biogas industry in Malaysia, to work
together to advance their joint interests. The parties will now
seek to enter formal partnerships, which would enable a significant
strengthening and expansion of the Company's biogas and broader
waste-to-energy activities.
The Company, through its wholly-owned subsidiaries BiON Ventures
Sdn Bhd ("BVSB") and BiON Sdn Bhd, has signed MOUs with each of the
following:
-- Green Lagoon Technology Sdn Bhd ("GLT"), a developer of
biogas power plants for customers and those that are wholly-owned,
with a specialisation in in-ground bioreactor systems. GLT
currently has four grid-connected biogas power plants generating a
total of 6MW.
-- LIPP Engineering Sdn Bhd ("LIPP"), an engineering,
procurement and construction company focused on generating
renewable energy from various biomass or waste sources utilising
its German-developed technology. In addition, through a subsidiary
company, LIPP has strong manufacturing capabilities enabling it to
produce advanced equipment and machinery.
-- SIRIM Tech Venture Sdn Bhd ("SIRIM"), a government
organisation established to promote technological advancement and
adoption to drive industrial efficiency and development in
Malaysia.
Under the terms of the Company's agreement with GLT, the parties
will seek to formalise a partnership that is expected to involve
the establishment of a special purpose vehicle ("SPV") (which would
be 55% owned by BiON with a majority board control) that would own
and operate the entire biogas assets of both companies, valued for
the purposes of the transaction at RM53.9 million for BVSB and
RM61.1 million for GLT ("Assigned Values"). BVSB shall be
responsible for raising the funding to meet the requirements of the
SPV and GLT shall be responsible for managing all biogas power
plant projects, including current pipeline and future biogas power
plant projects.
The Directors believe that the new entity would be the largest
owner of biogas power plants in Malaysia based on installed
capacity, which would enjoy benefits such as from economies of
scale and the pooling of expertise.
It is intended that BVSB and GLT shall enter into a definitive
share subscription agreement, shareholders' agreement and other
relevant agreements, which will be subject to the following:
(i) verification of the Assigned Value by an independent party
to be appointed by GLT and BVSB;
(ii) satisfactory legal due diligence on GLT and BVSB;
(iii) satisfactory technical due diligence on GLT and BVSB; and
(iv) in principle approval from the relevant authorities on the transaction structure.
In addition, as this transaction would be considered a
Fundamental Change of business under the AIM Rules, any such
transaction would require the approval of the Company's
shareholders via the convening of a general meeting. The Company
will update the market as appropriate in due course.
GLT's audited accounts for the year ended 31 December 2019
reported a profit before taxation of RM1.3 million on turnover of
RM47.0 million with gross assets as at that date of RM42.0
million.
BiON will, in addition, work with each of LIPP and SIRIM,
respectively, to explore potential waste-to-energy opportunities,
including biogas, that would be of mutual benefit and which can
leverage the resources of both parties. In particular, under the
agreement with LIPP, the parties will seek to work together - with
LIPP as a technology and/or development partner - to enhance BiON's
current biogas business as well as seeking future opportunities
across various biomass fields. The Company's partnership with SIRIM
includes, amongst other objectives, the joint establishment of a
bioenergy hub for the commercialisation of agricultural and
industrial waste.
As noted above, each of the MOUs are non-binding and subject to
definitive documentation.
Datuk Syed Nazim bin Syed Faisal, CEO of BiON, said: "We are
delighted to have entered these three MOUs that we believe will
accelerate the expansion of our activities. Each member of this
consortium - with BiON at the centre - brings different, but
complementary, resources and expertise, which, together, provide
critical mass to enable us to drive forward not only our own
business but the development of the biogas and broader
waste-to-energy industry in Malaysia. As we have said previously, a
key element of our growth strategy is to form strategic
partnerships and joint ventures and this is the important first
step in the delivery of that plan. We look forward to working with
our new partners and reporting on our progress."
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the EU Market Abuse Regulation (596/2014).
Enquiries:
BiON plc
Datuk Syed Nazim bin Syed Faisal, CEO
+603 6413 1085
Fakrizzaki Ghazali, CFO
www.bionplc.com
Beaumont Cornish Limited (Nominated Adviser)
Roland Cornish, Felicity Geidt +44 20 7628 3396
Optiva Securities Limited (Broker)
Vishal Balasingham +44 20 3137 1903
Luther Pendragon (Financial PR Adviser)
Claire Norbury +44 20 7618 9100
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