UP 25% on NEWS,,,,,,,,,,,,,,,,,,SCHOENER........??????????? ReGen III Announces Completion of Equity Due Diligence, Resulting in Amended Terms with Private Equity Firm
V.GIII | 9 hours ago
Vancouver, British Columbia--(Newsfile Corp. - July 27, 2022) - ReGen III Corp. (TSXV: GIII) (OTCQX: ISRJF) (FSE: PN4) ("ReGen III" or the "Company") is pleased to announce that after successful completion of the equity due diligence process and FEL2, ReGen III and the U.S. based multi-billion-dollar, green energy infrastructure focused, private equity firm ("PE Firm") have signed an amended letter of intent (the "LOI") for the development, construction, financing and ownership of the Company's Texas used lubricating oils recycling facility and a partnership framework for financing future projects.
The PE Firm or its designated affiliate will commit a minimum of US$75 million up to a maximum of US$150 million of equity to the Company's Texas recycling project, an increase from the maximum US$75 million initially announced. In return the PE Firm will receive a 14.4% preferred return on funds invested plus 50% ownership in the project (the "Project Level Financing").
The increased project equity commitment by the PE firm will materially reduce the funds ReGen III will need to raise in the public markets thereby substantially reducing shareholder dilution at the parent company level.
The PE Firm and the Company are committed to updating and finalizing the four, previously announced Definitive Agreements within thirty (30) calendar days.
On execution of the Definitive Agreements, the PE Firm will also have an exclusive Right-of-First-Offer to provide up to one hundred percent (100%) of the equity required for the construction financing of each future project developed by the Company through December 31, 2023.
Concurrent with the closing of the Texas City project investment, the PE Firm will continue to have the right to acquire, via a private placement, up to a 5% stake of the common stock of ReGen III on a fully diluted basis (the "Pubco Financing").
Greg Clarkes, Chairman and CEO of ReGen III, stated, "Following a successful and lengthy due diligence process, we are pleased to see the equity finish line. Members of the Company and the PE Firm will work to complete the four (4) outstanding Definitive Agreements for the Texas facility over the next thirty (30) calendar days. The amended LOI terms were negotiated against a backdrop of challenging capital markets, increased capital costs due to inflationary pressures and site-specific scope changes identified during FEL2 and the value engineering process. With base oil prices increasing during Q1/Q2 2022, the projected economics for the Texas facility remain incredibly robust without relying on any government subsidies."
Mr. Clarkes continued, "The amended LOI provides compelling evidence of the strength of ReGen III's Texas Project. In the PE Firm, ReGen III has a potential partner willing to increase its equity investment from US$75 million to a range of US$75 to US$150 million while also agreeing to take a larger role in developing our innovative, sustainable technology to recycle used motor oil into high value Group III base oils - both in Texas and around the globe. ReGen III looks forward to moving to binding agreements for Texas expeditiously over the next thirty (30) calendar days and building additional projects in partnership with the PE Firm."
A finders' fee of two percent (2%) cash and two percent (2%) in common shares of ReGen III will become payable to a licensed entity upon closing of the proposed equity financings.
About ReGen III
ReGen III is a cleantech recycling company creating more sustainable solutions that include better environmental outcomes and compelling economics.
Last year, ReGen III engaged Koch Project Solutions, LLC ("KPS") to provide project execution management services leading up to the turnkey delivery of its new facility in Texas whereby, KPS is leading ReGen III's world class engineering, construction and licensed vendor teams (PCL Industrial Management Ltd., Koch Modular Process Systems and Duke Technologies) through the completion of detailed design, construction, commissioning, and start-up. ReGen III has a definitive offtake agreement with bp to purchase 100% of the Company's base oils produced at the proposed Texas recycling facility.