Anaergia Transfers Italian Projects to Arjun

23 Aug, 2023

Anaergia Transfers Italian Projects to Arjun

Anaergia Inc. has made an official announcement regarding its recent agreements with entities overseen by Arjun Infrastructure Partners, London. These agreements have led to the immediate termination of Anaergia's obligations associated with loan amounts totaling approximately $145 million, which were owed to Arjun.

The Canada-based company, Anaergia, headquartered in Burlington, has executed a transaction wherein it has transferred ownership of six build-own-operate assets located in Italy to Arjun's subsidiaries. In return for this transfer, Anaergia's loan obligations to Arjun, amounting to $145 million, have been effectively canceled.

In consequence, Anaergia will be receiving a nominal amount of cash consideration as part of this transaction. The decision to engage in these agreements stemmed from Anaergia's strategic evaluation, which was previously disclosed, and extensive consultations with professional advisors. It was determined that the ongoing projects required additional capital beyond what the company could secure through its existing lending facilities to attain operational viability. It's important to note that Anaergia was not equipped to acquire the associated loans if Arjun were to exercise the lender option.

Following the completion of this transaction, Arjun has gained complete ownership and control over the projects. This gives Arjun the opportunity to infuse the additional capital needed for each project to establish commercial operations. Consequently, Anaergia is now relieved of any further obligations to provide additional capital for these projects.

Anaergia's CEO, Brett Hodson, emphasized that their strategic assessment led to the conclusion that a consensual arrangement with Arjun was the optimal path forward. This arrangement was aimed at ensuring the projects achieve operational success in a timely manner. Hodson further highlighted that this transaction not only reduces their capital requirements but also enhances the company's liquidity. Hodson expressed his enthusiasm for the collaboration with Arjun and the joint commitment to completing the construction and advancing other business development prospects in Italy.

Additionally, Anaergia and Arjun have entered into a cooperative agreement to manage post-closing activities. This agreement outlines Anaergia's continued involvement in providing engineering, procurement, and construction work for the projects, along with certain transition services. Moreover, the agreement opens the possibility for Anaergia to receive extra compensation through performance incentives and an earn-out, subject to good faith negotiations on the terms.

Anaergia's primary focus is on mitigating a significant source of greenhouse gas emissions. They achieve this by utilizing proprietary technologies to convert organic waste into valuable resources such as renewable natural gas (RNG), fertilizer, and clean water. With a track record of project development spanning four continents, Anaergia offers comprehensive solutions encompassing waste organic extraction, efficient anaerobic digestion, biogas enhancement, fertilizer production, and water purification.