Wasabi Energy (LON:WAS) confirmed it has paid another instalment on its purchase of a majority stake in Shanghai Shenghe New Energy Resources Science and Technology (SSNE).
Wasabi agreed last year to purchase 50.5% of SSNE for around US$30mln through its subsidiary, Wasabi New Energy Asia (WNEA). With the payment of the latest instalment of US$2.85mln, WNEA has now stumped up US$22mln, of which US$8.2mln has been in cash, with the rest satisfied through the issue of 30mln WNEA shares.
The rest of the purchase consideration is due by the end of November of this year. Wasabi says it has appointed an international brokerage house in Hong Kong to complete a fund raising before the payment deadline and ahead of a planned flotation of WNEA on the Singapore stock exchange in the first half of 2014.
Wasabi owns 40mln shares in WNEA, equivalent to two-thirds of the share capital of the company. The vendors of SSNE have a 31.25% stake in WNEA after exercising an option to take some of the purchase consideration in WNEA shares.
“Wasabi Energy intends to hold a significant shareholding in WNEA, which will raise its own capital with the value of WNEA being reflected back into the Wasabi Energy balance sheet,” revealed Wasabi’s chairman, John Byrne.
"Wasabi is establishing WNEA as a significant power producer in the Asian region utilising its unique ownership of the Kalina Cycle and Enhanced Rankine cycle technologies,” Byrne said, adding that the establishment of WNEA is advancing the Wasabi plan of using regional subsidiaries to expand into key global regions.
“The Asian markets, and in particular China, offer an enormous opportunity for the Kalina Cycle. We are in advanced discussions with a number of significant leading industrial companies on the application of the Kalina Cycle to their operations," Byrne revealed.