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Major biofuel firm's survival depends on deal with bank
Page 16
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Biofuels Corporation seeks to restructure as higher vegetable oil prices and lower biofuels prices hit business. David Harris reports.
ONE OF EUROPE'S biggest biodiesel producers has drafted a restructuring plan in a bid to avoid insolvency.
Biofuels Corporation, based at Seals Sands, Teesside, has proposed a deal which would leave 94% of the company owned by Barclays Bank. The company admits it can only continue trading with Barclays' support.
Biofuels Corporation chairman Mike Buzzacott says: "Given the difficult trading backdrop and the level of existing debt, the board has concluded it should enter into restructuring discussions with Barclays to seek to create a platform from which the group could fulfil its potential as a significant force in the renewable transport fuels market."
A statement explains: The combination of higher vegetable oil prices and lower biodiesel prices have together meant that the company has been unable to make profits from the production of biodiesel." An emergency general meeting will discuss the restructuring on 23 July. If approved, the plan will take effect immediately. The company is expected to cancel its membership of the Alternative Investment Market (AIM) on 2 August.
Under the deal, Barclays would cancel .£40m of the company's debt in exchange for 94% of the shares.
Biofuels Corporation began selling biofuel in April 2006; by September the plant had been tested at production rates of 30 tonnes/hour which represents more than 90% of capacity.