Algae.Tec (ASX:AEB) will introduce its algae based renewable fuel and carbon capture technology into the greater China region under an agreement with China Finance Strategies Investment Holdings (CFS).
The company will issue an initial US$0.5 million convertible bond, and subject to achieving certain milestones, will issue US$5 million in conditional options to CFS.
CFS is a Hong Kong based financial institution that has great experience of introducing and developing new technologies into China.
It invests its own capital, manages investment funds, as well as providing corporate and financial advisory services, with one of their key focuses on the green energy sector.
CFS has extensive relationships in China with its key executives having completed over 250 fundraising and advisory transactions in Greater China Region and invested in over 20 projects involving around US$1.5 billion.
Both companies will jointly explore commercial scale opportunities for Algae.Tec’s technology across Greater China incorporating the People’s Republic of China, Taiwan, Hong Kong and Macau.
Algae.Tec expects its algae based renewable fuel and carbon capture technology to play a meaningful role in contributing to the Strategic Targets China has set for itself.
Recently, China and the U.S. agreed on a set of greenhouse gas emission targets.
The US$0.5 million bond is convertible into Algae.Tec shares at A$0.075 cents per share.
The bond attracts a 12% coupon payable annually in arrears and is repayable or convertible after 18 months.
Funds raised will be for working capital and the further development of algae plants.
The agreement with CFS also provides for them to be issued options to subscribe for an additional US$5 million in Algae.Tec shares exercisable at A$0.075 per option, contingent upon achieving certain commercial plant commitment milestones.
In December, the company received a show of confidence from its largest partner Reliance Group (BSE:500325, NSE:RELIANCE), which is subscribing for shares and options totalling $2.4 million.
Reliance is one of India’s largest publicly traded companies with businesses in the energy and materials value chain delivering revenue of US$75 billion in 2014.
View original article at: Algae.Tec making inroads into greater China region