Kreido Biofuels, Four Rivers BioEnergy complete sale

By Erin Voegele | March 09, 2009
Web exclusive posted March 10, 2009, at 5:39 p.m. CST

Kentucky-based Four Rivers BioEnergy Inc. has acquired California-based Kreido Biofuels Inc. assets, which include Kreido's spinning tube-in-tube STT reactors and STT technology, as well as its modular biodiesel production plant equipment and related assets.

According to Kreido Biofuels' Web site, the STT technology accelerates the rate of chemical reaction; increases selectivity, conversions and yields; provides real-time control of the quality of chemical processes; and reduces the time required for manufacturing scale-up. These advantages are achieved through a phenomenon called Couette flow.

The sale closed on March 5. The purchase price for the assets was approximately $2.8 million in cash, 1.2 million shares of Four Rivers BioEnergy common stock, a warrant to purchase an additional 200,000 shares of Four Rivers BioEnergy common stock at $8 per share, and the assumption of certain purchase orders. The cash proceeds will be used to settle obligations to creditors. The Four Rivers BioEnergy common stock and warrants will be held by Kreido Biofuels for 360 days, after which time the shares may be sold or distributed.

According to Gary Hudson, Four Rivers' president and chief executive officer, the company plans to build a biodiesel refinery near Calvert City, Ky. That refinery will make use of the technology and assets Four Rivers has acquired from Kreido. No timeline is currently available as to when construction will begin on the project, Hudson said. In addition, he continued, Four Rivers intends to utilize the STT technology in other applications as well, including applications in the chemical and pharmaceutical industries.

According to an annual report that Four Rivers filed with the U.S. Securities and Exchange Commission on Feb. 12, the company had purchased approximately 437 acres of land near Calvert City and was in the permitting process for the proposed plant. The next stage of development included raising additional capital to carry out construction. In the annual report, the company stated that the severe decline in capital markets had caused work to be postponed until markets recover.
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