Anaergia is offloading its anaerobic digestion projects in Italy to Arjun Infrastructure Partners due to its inability to fulfill a loan obligation to Arjun.
TSX-listed Anaergia said it has agreed to sell the six build-own-operate assets in Italy to cover debt by granting entities managed by Arjun the option to terminate approximately $145m (€132m) in loan obligations owing to Arjun.
As part of the agreement, Arjun is buying the associated loans for the projects following Anaergia’s failure to secure financing and equity capital for the projects. The deal gives Arjun full ownership and control of the projects which will provide it with the opportunity to fund the additional capital required for each project to reach commercial operations.
Anaergia said as a result of the transaction it will receive de minimis cash consideration.
Anaergia and Arjun have also entered into an agreement to manage post-closing for Anaergia to continue to provide certain services and also receive performance-related incentives.
Brett Hodson, CEO of Anaergia, said as part of the company’s strategic review, it was determined that the best path forward was a consensual deal and arrangement with Arjun to help ensure the projects reach commercial operations in a timely manner.
Hodson added: The transaction reduces our capital requirements and immediately helps improve liquidity for the company.
“We look forward to assisting Arjun and the project teams to complete construction and further advance other business development opportunities in Italy.”
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