In Brazil, fuel distributor Vibra Energia S.A. has announced that it entered into contracts on July 2, 2022, to acquire a 50 percent stake in compatriot biogas and biomethane project developer ZEG Biogás e Energia S.A. (ZEG Biogás). The transaction was approved by Vibra's Board of Directors and is not dependent on shareholder approval as per Brazilian Corporation Law.
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ZEG Biogás, a subsidiary of ZEG Energias Renováveis S.A. and FSL Consultoria Empresarial Ltda., is dedicated to offering an environmentally advantageous and commercially viable solution to replace the use of fossil gas and other fossil fuels such as diesel oil and liquefied petroleum gas (LPG).
Biomethane aka renewable natural gas (RNG) is sourced from the capture and upgrading of landfill gas (LFG) from landfills or biogas from anaerobic digestion (AD) of different types of agro-industrial residues, such as sugarcane vinasse or palm oil mill effluent (POME).
Complements business operations
According to Vibra, this venture into biogas complements its platform of renewable products and services, reinforcing the company’s position of relevance in the process of transition and decarbonization of the Brazilian energy matrix, through the expansion of the supply of cleaner, renewable and sustainable energy.
ZEG Biogás has the potential to reach production of more than 2 million Nm³/day within five years.
The transaction will take place through a primary contribution of BRL 30 million (≈ US$5.53 million) at the closing of the deal, and a secondary installment of BRL 129.5 million (≈ US$23.88 million), giving Vibra a 50 percent capital ownership in ZEG Biogás.
Vibra undertakes to invest up to BRL 412 million (≈ US$76 million) in the business over the next few years for the execution of new biogas/biomethane projects, of which BRL 206 million (≈ US$38 million) would refer to Vibra’s 50 percent stake and the balance would be contributed on behalf of the other partners.
These contributions will be conditioned to the effective implementation of expansion projects and compliance with the minimum attractiveness conditions established in the contract for each project.
Buy out options
Vibra has also negotiated future Purchase Options, at market value, for which, in the first Option, it may hold 70 percent of the shares representing the share capital of ZEG Biogás and, in the second, hold the entirety of the shares of ZEG Biogás.
The eventual acquisition of control of ZEG Biogás, as a result of the possible exercise of these Purchase Options, will be subject to the necessary approvals, such as from government authorities, under the terms of the current regulation, including approval at the Company’s General Meeting, if necessary.
The effective completion of the transaction will be subject to the verification of certain conditions precedent, including obtaining the approval of the Administrative Council for Economic Defense (CADE).
