GreenShift Announces $22 Million Commitment by Cornell Capital Partners for New AgriFuels Division; Company To Build 45 Million Gallon Per Year Biodiesel Production Facility
Business Wire via COMTEX
Jun 8, 2006 10:08:01 AM
NEW YORK, Jun 08, 2006 (BUSINESS WIRE) --
GreenShift Corporation (OTCBB: GSHF) today announced the execution of agreements by GreenShift's new AgriFuels division, GS AgriFuels, for a $22 million investment by Cornell Capital Partners.
GS AgriFuels will use the investment to build a 45 million gallon per year biodiesel production facility and to provide working capital for the facility's initial operations.
"Cornell Capital is a great supporter of biofuels and renewable energy in general," said Kevin Kreisler, Chairman and Chief Executive Officer of GreenShift. "Cornell Capital's serious approach to supporting companies on the cutting edge of biofuels production reflects its overall vision and commitment to the clean energy sector," said Kreisler.
"Both innovative and sustainable, we see the GS AgriFuels business model as one that will thrive in the biofuels marketplace," said Troy Rillo, Managing Director of Cornell Capital. "We are proud to be a part of GS AgriFuels' development and look forward to being a part of its future."
This investment follows the closing yesterday of the sale by GreenShift of its wholly-owned subsidiary, Mean Green BioFuels, Inc., to another GreenShift subsidiary, Hugo International Telecom, Inc. (OTC Bulletin Board: HGOT) Hugo is an 80% owned subsidiary of GreenShift that has been inactive to date. Hugo will be re-named "GS AgriFuels Corporation" early next quarter in connection with these transactions.
Under the investment agreements, Cornell Capital will purchase 5% debentures in GS AgriFuels (Hugo) totaling $22 million that are convertible into GS AgriFuels (Hugo) common stock at a price of $3.00 per share. Cornell Capital provided an initial $5,500,000 of this amount at the closing, and will provide the balance of the investment in a series of tranches tied to GS AgriFuels' satisfaction of key benchmarks in its development schedule.
About GS AgriFuels Corporation
GS AgriFuels intends to finance, build and operate several biodiesel production facilities in the U.S. The feedstock for these facilities will include corn oil derived from ethanol facilities, soybean oil, and animal fats. The first planned biodiesel production facility will produce 45 million gallons per year and will be expandable to accommodate growth. Each GS AgriFuels biodiesel facility is expected to utilize traditional esterification and transesterification methods as well as proprietary processes.
GS AgriFuels is party to a strategic alliance with GreenShift's clean technology subsidiary, Veridium Corporation (OTC Bulletin Board: VRDM) pursuant to which GS AgriFuels has the right of first refusal to purchase Veridium's various biodiesel feedstocks, including the high grade corn oil that Veridium extracts from an ethanol by-product called distillers dried grain ("DDG") with Veridium's patent-pending Corn Oil Extraction System(TM).
Veridium's is developing a captive supply of DDG by providing its turn-key systems to ethanol facilities for no up-front cost in exchange for long-term corn oil purchase agreements that will afford Veridium a fixed discount to prevailing corn oil market prices. Veridium intends to purchase and sell its extracted corn oil as a high grade corn oil product until GS AgriFuels' first biodiesel production facility commences operations, at which point GS AgriFuels will purchase the corn oil from Veridium based on a fixed discount to prevailing fuel prices.
