Australian Renewable Fuels to acquire competitor

In a bid to become a key player in the biodiesel sector, biodiesel producer Australian Renewable Fuels Limited will acquire its largest competitor Biodiesel Producers Limited.

The acquisition includes Biodiesel Producers' production plant, installed with technology capable of converting tallow and waste cooking oil into biodiesel.

The facility is sited in Barnawartha, Victoria, and has a 60 million litre-a-year capacity. This will increase Australia Renewable's production capacity to 150 million litres a year, making the company the only national biodiesel producer in Australia.

'This acquisition will provide ARW with a national footprint with operations to service the Eastern Seaboard, South Australia and West Australia,' says Tom Engelsman, CEO of Australian Renewable Fuels. 'Strategically, the BPL acquisition catapults ARW into being the most significant player in the biodiesel space, positioning the company with improved overall supply options, enhancing our ability to supply the major operating companies in Australia with a superior certified product that is consistent in both supply and quality.'

The predominantly non-cash assumption of Biodiesel Producers' existing convertible note debt (with a redemption value of $21 million (€15 million) will incorporate a payment and structure of Australian Renewable's notes aligned to the future performance of Biodiesel Producer's plant over a five-year period.

The due diligence process has commenced and is expected to be finalised by the end of February 2011.