PETALING JAYA: Genting Plantations Bhd (GenP) has called off the share sale agreement it entered into with Elevance Renewable Sciences Singapore Pte Ltd (ERS Singapore) in July 2014.

Under the original agreement, GenP was to sell a 25% stake in its biodiesel unit Genting Biorefinery Sdn Bhd (GIB) for RM72 million, and collaborate with ERS Singapore to produce high value palm oil derivatives in Malaysia.

As part of the unwinding, ERS Singapore will transfer back the 25% equity to GenP, while GenP will pay ERS Singapore a net amount of RM64 million after setting off RM8 million owing by ERS Singapore for the initial share sale.

In a Bursa filing, GenP said ERS Singapore is currently undergoing a restructuring exercise, and as such, it will not take on further capital commitments for the metathesis plant.

“In view thereof, it is in GenP’s best interest that Elevance (as the holding company of ERS Singapore) exits as shareholder of GIB under the proposed transactions but to remain in the role of licensor for the metathesis licence,” it said.

The metathesis plant refers to GIB’s existing 200,000 tonne biodiesel plant located at Lahad Datu, Sabah, which will be transformed to produce high value palm oil derivatives using Elevance’s metathesis technology.

As for the licence and catalyst supply agreement also inked in July 2014, Elevance will continue to grant the metathesis licence and provide catalyst supply to GIB following the same terms and conditions.

GenP also noted that upon completion of the agreement termination, GIB will become a wholly-owned subsidiary of GenP and will continue to hold the metathesis licence, giving it the flexibility to pursue the metathesis plant in future and to collaborate with other strategic partners to venture into higher value added product streams.