Acquisition of Remaining Interest in Pellet JV
Source: RNS
3 October 2022
Drax Group plc
("Drax", "the Group", "Drax Group", "the Company"; Symbol: DRX)
Acquisition of Remaining 10% Interest in Alabama Pellets
Drax is pleased to announce that it has agreed to acquire the remaining 10% minority interest in Alabama Pellets LLC joint venture ("Alabama Pellets"), from Two Rivers Lumber Co LLC ("Two Rivers") for a cash consideration of US$22 million.
The acquisition of Pinnacle Renewable Energy Inc. in April 2021 included a change of control provision over Alabama Pellets, in which Two Rivers held a 10% interest.
Alabama Pellets is comprised of the Aliceville and Demopolis pellet plants. Aliceville, which commissioned in 2018, has a nameplate production capacity of 300,000 tonnes per annum. Demopolis, which commissioned in 2022 and is co-located with a Two Rivers sawmill, has a nameplate production capacity of 360,000 tonnes per annum. The acquisition will provide Drax with net economic control over a further 66,000 tonnes of sustainable biomass production capacity per annum, rights over land associated with Demopolis and extend long-term fibre supply arrangements.
Two Rivers is considered to be a Related Party under the UK Listing Rules with the proposed transaction constituting a Smaller Related Party Transaction under Listing Rule 11.1.10.
Completion is expected to take place in October 2022.
Enquiries:
Drax Investor Relations: Mark Strafford
+44 (0) 7730 763 949
Media:
Drax External Communications: Ali Lewis
+44 (0) 7712 670 888
Website: www.Drax.com
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