EverGen Infrastructure Corp., the Renewable Natural Gas (RNG) Infrastructure Platform, has reportedly signed an LOI (letter of intent) with Grow the Energy Circle Ltd. (GrowTEC).
The company had made the move in its capacity as a general collaborator of CKPPQ Farms LP. It intends to acquire a 67% interest in an Alberta-based biogas facility and collaborate with GrowTEC on the development and expansion of renewable gas output at these facilities.
This asset is a breakthrough project in a planned jurisdiction on which the Canada-based company can continue to stake part in the combination and proliferation of the RNG sector.
EverGen will acquire an interest in the project either directly or via ownership in a newly established SPVC (special purpose vehicle corporation) that will hold project assets, for nearly USD 6.6 million comprising of USD 3.3 million of initial cash consideration and issuing around 600,000 EverGen common shares with a deemed per-share value of USD 5.5.
At the closure of the proposed transaction, GrowTEC will be able to nominate a director to the EverGen board. The deal is anticipated to be executed in the Spring of 2022.
Currently, the project is in Phase 1 of development which is predicted to produce nearly 80,000 gigajoules of RNG yearly and will be complete by the third quarter of this year. Upon the closure of the transaction, EverGen will collaborate with GrowTEC to initiate Phase 2 expansion which is anticipated to include an additional 60,000 gigajoules of RNG yearly for a total RNG production of 140,000 gigajoules yearly from the project.
This increased the capabilities of producing RNG by more than 40% across the core operated projects of EverGen. Further cash consideration of nearly USD 4 million will be made upon attaining certain milestones. Consideration for the company’s interest in the project will be financed from current cash flow and working capital.
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