Enviro signs additional term sheet with TreadCraft Carbon LLC regarding terms and conditions of the license agreement
N.B. The English text is an in-house translation of the original Swedish text. Should there be any disparities between the Swedish and the English text, the Swedish text shall prevail.
Scandinavian Enviro Systems AB (publ) ("Enviro" or "the Company") has signed another term sheet with TreadCraft Carbon LLC, Buffalo, NY, USA. This second agreement covers the crucial parts of the license agreement regarding the right to use Enviro's technology in a jointly owned plant in Buffalo. The parties have already agreed on the main terms and conditions regarding the sale of the plant itself.
The new agreement includes a partial revenue-based license fee, which Enviro estimates to have a value up to EUR 500,000 per year for 20 years from the start of the plant.
As the Company has previously announced, a final agreement between the parties is expected to be finalized during the second half of 2019. A completed agreement would mean that Enviro has sold a plant worth between EUR 25 and EUR 30 million to TreadCraft Carbon LLC. In accordance with Enviro's new strategy, the Company intends to be a co-owner of the Buffalo plant, which will be through a US-based joint venture. In addition to the purchase price of the plant, Enviro also expects license revenue and distribution of future profits through the joint venture. To facilitate the establishment of a joint venture, Enviro, as previously announced, has decided to establish a holding company in the USA.
In this signed term sheet, which refers to the terms and conditions of the license agreement, the parties agree on central terms and conditions such as the scope, validity, payment model, contractual agreements, applicable law, and more. The co-ownership structure of the Buffalo recycling plant in the state of New York is still under negotiation. The final agreements are all conditional upon financing, a process that is ongoing in parallel.
All the other construction projects that were previously announced are continuously evaluated and are still current. The ever-growing market interest in recycled carbon black, rCB, and high bio-content oil will require additional plant capacity for the recycling of end-of-life vehicle tyres.
Enviro owns and operates a plant for the recycling of end-of-life vehicle tyres in Åsensbruk in Dalsland. The plant has a 6,000 tonnes per year capacity for end-of-life tyres. The carbon black from the plant is used, among other things, for the production of rubber parts for the automotive industry. Among the end customers are Volvo Cars, Trelleborg Wheel Systems and Elastomeric.
For further information, please contact:
Thomas Sörensson, CEO of Enviro, +46 (0)735-10 53 43, email@example.com
Urban Folcker, CFO of Enviro, +46 (0)760-00 13 11, firstname.lastname@example.org
Alf Blomqvist, Chairman of the Board of Enviro, +46 733 149 700, email@example.com
Mangold Fondkommission AB, +46 8 503 01 550, firstname.lastname@example.org, is Enviro’s Certified Adviser at Nasdaq First North Growth Market Stockholm.
This information is information that Scandinavian Enviro Systems AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, on September 11th, 2019, at 22:30 CEST.