Lignol Energy to acquire stake in biodiesel venture

Lignol Energy, an advanced biofuels technology company, will acquire a 40% equity stake in Neutral Fuels, plus a controlling 51% stake in Neutral’s Australia and New Zealand operations.

A total of AU$4.07 million (€2.8 million) will be funded which will help deploy the next phase of planned biorefineries throughout Asia Pacific, the Middle East and Africa region, in conjunction with fast food brand McDonald’s.

Neutral Fuels, under an agreement with McDonald’s, currently operates two closed loop biorefineries located in United Arab Emirates and Australia. The business model takes used cooking oil from local restaurants and in return provides B100 biodiesel to fuel McDonald’s suppliers’ delivery fleets.

‘Neutral’s business model and collaboration with McDonald’s is both an attractive and sustainable model in terms of the environment and in commercial terms,’ says Lignol Energy CEO Ross MacLachlan.

“Partnering with Lignol is a logical next step for us,’ adds Neutral Group CEO Karl Feilder. ‘Our current technology is able to convert used cooking oil to biodiesel and Lignol’s next generation technology provides us with options for the future.’

The terms of the agreement provide for two tranches of funding. Each tranche will be comprised of a shareholder loan which will rank pari passu with the existing shareholder loans currently in place, which are for a five-year term, interest free and unsecured.

The first tranche will be funded on or before 15 October with an AU$2 million loan. The second tranche is due in January 2014.