Argonaut has been successful in working with Renewable Heat & Power (RHP) on a significant transaction that will see the re-commissioning of the Albany Wood Pellet Plant.
RHP is the 100% owner of the Plantation Energy business, an Albany based manufacturing operation that can produce 250,000t of wood pellets per annum. Wood pellets are a renewable energy fuel used extensively in Europe, Japan and Korea as a replacement fuel in coal fired power plants.
Plantation Energy's Albany Wood Pellet Plant has been in care and maintenance since February 2012. Management and Argonaut recognised the opportunity associated with the lower Australian dollar, increased demand for renewable energy worldwide and clarity of forestry ownership in the Albany region, as key changes in the environment that would allow a viable and profitable business to be reestablished.
The transaction is the culmination of nearly 3 years’ dedication and persistence by RHP and Argonaut. Key achievements include:
- Buy-back of the Albany Wood Pellet Plant from a private equity group on excellent terms;
- Raising of seed capital;
- Preparation of a detailed Business Plan to re-establish the business;
- Execution of the Business Plan;
- Negotiation of Off-Take arrangements;
- Leading a global process to find a strategic funding partner; and
- Managing a complicated due diligence and legal drafting process.
RHP’s funding partner is Engie Energy Management (formerly known as GDF Suez), a French multinational electrical utility 40% owned by the French Government and one of the world’s largest energy companies. Engie have substantial energy assets in Australia including the Hazelwood and Loy Yang B power stations in Victoria, Pelican Point Power station in SA and the Kwinana Cogeneration plant in WA.
RHP will use the $7 million in convertible note funding to:
- Recommission the existing plant (to be completed by June 2017);
- Invest into capital requirements for the plant’s operations (ship loader and storage facility); and
- Provide working capital for the return to full operations.
Commercial production is due to commence in Q3, CY17. When in full production the business will have annual revenues of ~A$50m and employ ~30 people, providing a real economic stimulus for the Albany Region.
Argonaut acted as financial adviser to RHP throughout the 3 year period. The transaction highlights Argonaut’s ability to work across the entire landscape of natural resources, with the world’s most sophisticated investors, both in and outside of the listed environment.
For more information on the Company visit www.plantationenergy.com.au.
For further information, contact Peter Balsarini, Director – Corporate Finance, Argonaut; Director of Renewable Heat & Power. Tel: +61 8 9224 6826 or email email@example.com.
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