Australian biodiesel co. ARfuels to merge with Wentworth Holdings

By ARfuels and Wentworth Holdings | November 19, 2012

ASX-listed Australian Renewable Fuels and Wentworth Holdings Ltd. announced that they have entered a proposed merger agreement that will see national biodiesel provider, ARfuels, injected with $14 million in capital.

ARfuels will make an offer to acquire all outstanding shares of Wentworth, backed by a unanimous recommendation by the directors of Wentworth. The merger will be implemented by way of an off-market takeover of Wentworth by ARfuels.

“The cash injection will significantly strengthen ARfuels’ balance sheet and fund working capital and strategic growth plans,” ARfuels Managing Director Andrew White said. “This proposed merger enhances the financial capabilities of ARfuels, particularly as biodiesel facilities and sales contracts come on-line for Picton and Largs Bay. These sales contracts together with the introduction of low-grade feedstocks, including waste vegetable oils from throughout Asia, require working capital that will now be available.”

The boards of both ARfuels and Wentworth believe there is strategic rationale for the merger that will combine technical expertise and production capabilities of ARfuels—Australia’s only national biodiesel producer—with Wentworth’s economic resources.

Wentworth Chairman Vaughan Webber described the offer as a win-win arrangement for both companies. “Wentworth is delighted to be merging with an emerging asset rich listed company with strong management and clear strategic objectives and growth strategy,” he said. “For Wentworth shareholders, this merger delivers not only exposure to a growth business but enhanced liquidity and genuine potential for share price appreciation. Accordingly, Wentworth directors unanimously recommend the bid.”

Key features of the agreement include:

-ARfuels and Wentworth Holdings have agreed terms of a proposed merger comprising a scrip offer by ARfuels for all the outstanding shares in Wentworth on the basis of 5.70 ARfuels shares for each one Wentworth share

-Unanimous recommendation by the directors of Wentworth

-The merger will be implemented by way of an off-market takeover of Wentworth by ARfuels

-ARfuels has secured pre-bid acceptance agreements for 19.4 percent of Wentworth’s issued shares

-On full acceptance, the merger will provide ARfuels with a cash injection of approximately $14 million to fund working capital, future growth and substantially strengthen its balance sheet.

ARfuels is Australia’s only national publicly listed biodiesel producer with plants in Victoria, South Australia and Western Australia. Focused on producing high-quality biodiesel from low-grade feedstocks from Australia and Asia, ARfuels is committed to environmental sustainability.

In 2011, ARfuels acquired Biodiesel Producers Ltd., which included a state-of-the-art biodiesel facility in Barnawartha, Victoria, increasing its capacity to 150 MMly (39.6 MMgy). 


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