BiON plc an environmental engineering, wastewater treatment, and renewable energy solutions company, has announced that it has signed non-binding Memorandums of Understanding (MoUs) with three parties, with complementary expertise and resources in the biogas industry in Malaysia, to work together to advance their joint interests.
BiON, through its wholly-owned subsidiaries BiON Ventures Sdn Bhd (BVSB) and BiON Sdn Bhd, has signed MoUs with each of the following:
- Green Lagoon Technology Sdn Bhd (GLT), a developer of biogas power plants for customers and those that are wholly-owned, with a specialisation in in-ground bioreactor systems. GLT currently has four grid-connected biogas power plants generating a total of 6MW;
- LIPP Engineering Sdn Bhd (LIPP), an engineering, procurement, and construction (EPC) company focused on generating renewable energy from various biomass or waste sources utilising its German-developed technology. In addition, through a subsidiary company, LIPP has strong manufacturing capabilities enabling it to produce advanced equipment and machinery;
- SIRIM Tech Venture Sdn Bhd (“SIRIM”), a government organisation established to promote technological advancement and adoption to drive industrial efficiency and development in Malaysia.
The parties will now seek to enter formal partnerships, which would enable a significant strengthening and expansion of the BiON’s biogas and broader waste-to-energy activities in the country
Own and operate biogas power plants
Under the terms of BiON’s agreement with GLT, the parties will seek to formalize a partnership that is expected to involve the establishment of a special purpose vehicle (SPV), which would be 55 percent owned by BiON, that would own and operate the entire biogas assets of both companies, valued for the purposes of the transaction at RM53.9 million for BVSB and RM61.1 million for GLT.
BVSB shall be responsible for raising the funding to meet the requirements of the SPV and GLT shall be responsible for managing all biogas power plant projects, including current pipeline and future biogas power plant projects.
The new SPV would aim to become the largest owner of biogas power plants in Malaysia based on installed capacity, which would enjoy benefits such as from economies of scale and the pooling of expertise.
It is intended that BVSB and GLT shall enter into a definitive share subscription agreement, shareholders’ agreement, and other relevant agreements, which will be subject to the following:
- verification of the Assigned Value by an independent party to be appointed by GLT and BVSB;
- satisfactory legal due diligence on GLT and BVSB;
- satisfactory technical due diligence on GLT and BVSB; and
- in-principle approval from the relevant authorities on the transaction structure.
In addition, as this transaction would be considered a Fundamental Change of business under the UK’s London Stock Exchange Alternative Investment Market (AIM) rules, any such transaction would require the approval of the BiON’s shareholders via the convening of a general meeting.
Explore waste-to-energy opportunities
BiON will, in addition, work with each of LIPP and SIRIM, respectively, to explore potential waste-to-energy opportunities, including biogas, that would be of mutual benefit and which can leverage the resources of both parties.
In particular, under the agreement with LIPP, the parties will seek to work together – with LIPP as technology and/or development partner – to enhance BiON’s current biogas business as well as seeking future opportunities across various biomass fields.
BiON’s proposed partnership with SIRIM includes, amongst other objectives, the joint establishment of a bioenergy hub for the commercialization of agricultural and industrial waste.
We are delighted to have entered these three MOUs that we believe will accelerate the expansion of our activities. Each member of this consortium – with BiON at the centre – brings different, but complementary resources and expertise, which, together, provide the critical mass to enable us to drive forward not only our own business but the development of the biogas and broader waste-to-energy industry in Malaysia. As we have said previously, a key element of our growth strategy is to form strategic partnerships and joint ventures and this is the important first step in the delivery of that plan. We look forward to working with our new partners and reporting on our progress, said Datuk Syed Nazim bin Syed Faisal, CEO of BiON.
BiON has successfully delivered projects, provided consultancy services, and forged collaborative partnerships among both the public and private sectors, in Malaysia and abroad.
BiON’s portfolio includes Independent Power Producer (IPP) projects, the commissioning of more than 30 anaerobic reactors for the rubber and palm oil industry sectors, as well as the construction of 19 digesters for numerous types of wastewater treatment plants (WWTPs) in countries such as Cambodia, India, Indonesia, the Philippines, Singapore, Thailand, and Vietnam.
