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Exclusive: Biodiesel company raising £850,000 in placing
BIODIESEL developer Viridas has announced a £850,000 share placing to fund a plantation in Brazil in an attempt to kick start its commercial biofuel production project.
The Leeds-based firm aims to produce oil from the jatropha plant, an inedible but highly-calorific plant which grows in Brazil.
The placing forms part of a planned series of fund raisings which will be used to establish a new administrative organisation in Salvador, Brazil, and to buy a 250-hectare farm in the state of Bahia.
The company has also appointed two new directors to the board with immediate effect. Martin Brink is the new managing director and David Thompson is finance director.
Stanley Wootliff, chairman of Viridas, said: "The placing provides Viridas with the additional working capital to move to the next stage of its development programme and to take advantage of the growing EU demand for compliant sustainable biodiesel and biomass sourced from a dedicated energy crop.
"With a strong team and partnerships in place this funding will enable us to build a business with sustainability at its core while building value for our shareholders."
In February this year, the group said it needed to around 5m to fund the base plantation but it has struggled to obtain investment due to the recession.
It hopes that today's share placing will kick start investment so it can move forward with its production plans.
The funds will go to establishing the base plantation, training 200 staff, buying 120 tractors, obtaining 26 million jatropha plants, plus getting its venture licensed and approved.
Once the base plantation is established, Viridas will start rolling out the commercial operation, which will require further funding.
Viridas hopes the plantation ultimately will produce 60,000 tonnes of crude jatropha oil and 240,000 tonnes of biomass annually.
Last month, the company revealed it made a loss of 231,322 in the last half year, but said it hoped the planned share placing would improve its performance.
Mr Wootliff said the operating losses in the six months to June 30 were due to the costs of personnel and maintaining its AIM listing as well as its extended fundraising.
The group made a retained loss of 217,936 which has been transferred to reserves. It had net assets at the half-year of 136,841.
Mr Wootliff said the group is in discussions with a number of potential investors and he is optimistic funding will be made available.
Mr Wootliff said commercial production of crude jatropha oil and biomass could be achieved within three years of securing the funds.
Achieving maximum production could take another five years, he added.
The oil will be used for transport and the biomass for electricity generation.
The company has a supply deal in place with chemicals giant Ineos, plus a management agreement with South American agricultural firm Cazenave.
The plantation will be on
marginal land which was previously used for cattle grazing but is now virtually useless for agriculture.
The firm has in recent years completely shifted its focus to concentrate on jatropha, changing its name from Caldwell Investments to Viridas.
It was previously a collection of businesses which ranged from garden furniture to a baby buggy parasols plus a German underwear firm.
Fresh faces on the board
Viridas has appointed two new directors to the board.
Managing director Martin Brink is a multi-lingual Dutch national who has been managing director of a property firm in Salvador, Brazil, for the past five years.
For the past 14 months he has been acting as a consultant to Viridas.
Finance director David Thompson has been finance director of Higgins, one of the largest potato suppliers to the processing industry, since 1988.
For the last nine years he has also been a non-executive director of commercial nursery business Johnsons of Whixley.
Mr Thompson is also a director of Esso, APLH and D Thompson.
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Thursday 24 May 2012
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