Algae.Tec Moves Forward In India

Algae.Tec (AEB) uses proprietary technology to grow algae in scalable modules fed by CO2 emissions and solar power. The resultant end-product is a clean biofuel, achieving a win-win of carbon capture and clean energy production… A year ago Algae.Tec signed a deal with the NSW government to build a biofuel facility at Macquarie Generation’s Bayswater coal-fired power plant.

In January this year, Algae.Tec entered an agreement with India’s largest privately owned company, Reliance Group, to build a pilot biofuel facility at the company’s Jamnagar complex – the world’s largest oil reginery.

The pilot facility will provide the opportunity to calibrate to suit local conditions before a larger demonstration plant is constructed, and if all goes well, a suitable fully-sized plant will follow. Thereafter, the agrement opens up Algae.Tec’s proprietary technology to a vast Indian economy heavily reliant on coal-fired power and diesel consumption and the potential to make a significant impact with regard India’s energy and environmental requirements, the company suggests. Reliance will retain exclusivity over the technology in teh Indian market.

Under the agreement, Algae.Tec issued $1.5m worth of new shares to Reliance at the then 90-day volume-weighted average price of 16/36c, and $ 5 m worth of options over new shares at an equivalent exercise price, with a commitment to exercise $1.2m worth of options within the next two years.

Today Reliance exercised its first tranche of options, representing just over 1.83 m shares, at 16.36c. The stock closed yesterday at 8c. Given some 300 m shares on issue, dilution on creation of new stock is negligible.

The decision to exercise follows progress achieved on the joint project to date. “The engineering of the plant is progressing well.” notes Algae.Tec, “fabrication of the module and other critical equipment is underway and construction is scheduled to begin within the next few months”.

 

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