Origo Sino-India Plc ("Origo") (LSE:OSI), the investment and strategic advisory company focused on the private equity markets of China and India
Origo Sino-India Plc ("Origo") (LSE:OSI), the investment and strategic advisory company focused on the private equity markets of China and India, has entered into definitive agreements with Roshini International Bio Energy Corporation Ltd ("RIBEC") to create an international joint venture focused on the renewable bioenergy sector. Origo has taken a 20% equity position in RIBEC, while extending a convertible note of up to US$2,000,000 and retaining the right to invest an additional US$6 million in a pre-IPO private placement.
Headquartered in Hyderabad, India, RIBEC has the world's largest plantation of non-edible, tree-borne feedstock with more than 40 million trees and seedlings. As a fully integrated bioenergy company, RIBEC is involved in the whole bioenergy value chain from plantations to refining and trading of biodiesel, bioethanol, biogas and biofertilisers. RIBEC is achieving rapid growth, with un-audited revenues for the financial year ending March 30, 2007 being US$5.87 million, and EBITDA at US$4.4 million. With operations and representation in India, China, Brazil and Africa, RIBEC intends to list on a major international stock exchange to provide further funding for its rapid expansion.
Established in 1996, RIBEC has more than a decade of research and development expertise and is a producer of non-edible feedstock from dry wasteland areas. RIBEC is a leading supplier of Pongamia Pinnata, a non-edible and drought-resistant tree with high yields of crude oil that recaptures rapidly growing greenhouse gas emissions and generates income to poor farmers and rural communities. RIBEC also grows Jatropha, a source of biodiesel whose residue can also be processed into biomass to power electricity plants.
RIBEC is in close negotiations with a major international energy company about a possible joint venture for plantations and the refining of biofuel in certain geographical sectors.
In addition to taking a 20% equity position in RIBEC, Origo has extended a credit facility under which Roshini may draw down up to US$2,000,000 for working capital purposes and operational expenses associated with the expansion of RIBEC's feedstock. The note is repayable in full in the event of an external financing round, or convertible into equity at the discretion of Origo at a 20% discount to the then applicable price per share. Origo has also been retained as a strategic consultant to assist RIBEC's expansion and fundraising activities.
Vinay Ganga, Managing Director for India of Origo Sino-India Plc, said: "We are pleased to have taken a substantial equity position in the world's largest non-edible, tree-borne feedstock producer. The world's growing and unmet need of biofuel brings enormous business and growth opportunities for integrated producers such as RIBEC."
Anil Reddy, CEO of RIBEC, said: "RIBEC needed a financial and strategic partner rapidly to expand and list on a global stock exchange. Origo provided the ideal combination of finance, management and exposure to India, China and Africa."
Chris Rynning, Chief Executive of Origo, said: "This position validates Origo's business model and execution capabilities in the area of natural resources. We are pleased to fund the roll-out of RIBEC while locking in the opportunity to subscribe for further equity in this highly promising company."