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GPP

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OTHERS GPP RESOURCES BERHAD ("GPP" OR THE "COMPANY") COLLABORATION AGREEMENT BETWEEN GREEN ENERGY RESOURCES (M) SDN BHD, A WHOLLY-OWNED SUBSIDIARY OF GPP, AND BELL ECO POWER SDN BHD

GPP RESOURCES BERHAD

Type Announcement
Subject OTHERS
Description
GPP RESOURCES BERHAD ("GPP" OR THE "COMPANY")

COLLABORATION AGREEMENT BETWEEN GREEN ENERGY RESOURCES (M) SDN BHD, A WHOLLY-OWNED SUBSIDIARY OF GPP, AND BELL ECO POWER SDN BHD

1.         INTRODUCTION

 

            The Board of Directors of GPP wishes to announce that its wholly-owned subsidiary, Green Energy Resources (M) Sdn Bhd (“GER”), had on 10 October 2019 entered into a

            Collaboration Agreement with Bell Eco Power Sdn Bhd (“BELL”) to govern the cooperation between GER and BELL for the operation and management of a biogas power plant

            (“CA”).

 

2.         INFORMATION ON BELL

 

            BELL was incorporated as a private limited company on 5 August 1997 in Malaysia under the then Companies Act, 1965 (Source: Search result with Companies Commission of

            Malaysia).

 

            It is the registered and beneficial owner of a biogas generated electricity power-plant located at Lot 4910-4911, Parit Ju, Mukim 4, Simpang Kiri, 83000 Batu Pahat, Johor,

            Malaysia (“Biogas-Plant”). It has a valid concessionaire agreement for generating, producing and selling electricity at the Biogas-Plant for the purpose of selling the electricity

            generated and produced to Tenaga Nasional Berhad (“TNB”) for a period of 21 years, commencing from 19 January 2010 to 19 January 2031 (“Concession Period”)

            (“Concessionaire Agreement”).

 

3.         SALIENT TERMS OF THE CA

 

3.1       Contribution

 

            (i)       GER will design, construct, commission, manage and maintain the Biogas-Plant for BELL. The Biogas-Plant shall be capable of generating a minimum of 11,900,000

                      kilowatt/hour of electricity per year using palm oil mill effluent provided by BELL.

 

            (ii)      Ownership over the equipments that are to be installed at the Biogas-Plant or any places adjacent to the Biogas-Plant as part of GER’s effort to revamp, overhaul and

                      expand the Biogas-Plant (“Equipment”), shall remain with GER at all material times.

 

            (iii)     Both parties to the CA agree that electricity so produced at the Biogas-Plant shall be used to sell to TNB and power Bell’s palm oil mill located at Batu Pahat. All income to

                      be derived therefrom shall be distributed among GER and BELL at sharing ratio stipulated in the CA.

 

            (iv)     Both parties to the CA agree to set up an operating account (being a current account jointly managed and approved by both parties) to receive income from sale of

                      electricity.

 

3.2       DURATION OF THE CA

 

            The CA shall commence on the date of the CA and expire on 31 January 2031. Either party may give written notice, 6 months before the expiry of the CA, to renew the CA

            (subject to mutually agreed terms and conditions) for a period to be mutually agreed upon.

 

            If the Concession Period was extended or renewed, the duration of the CA shall also be extended or renewed accordingly to reflect the extended / renewed Concession Period.

 

            If relevant authorities decided to convert the Concessionaire Agreement into another type of contract, GER shall be given the first exclusive rights of refusal to renew / extend

            the CA by adopting terms of the new type of contract with relevant authorities.

 

3.3       Events of default

 

            Events of default include:

 

            (a)     filing by such other party of a voluntary petition in bankruptcy or insolvency, or a petition for reorganisation or protection under any bankruptcy or insolvency law;

 

            (b)     consent by such other party to any involuntary petition in bankruptcy or insolvency;

 

            (c)      making of an order / judgement by any competent court, on the application of a creditor, adjudicating such other party bankrupt or insolvent, or approving a petition

                       seeking reorganisation, or appointing a receiver, for all or substantial part of such party’s assets which such order / judgment shall continue unstayed and in effect for 60

                       days;

 

            (d)      a representation / warranty by GER or BELL under the CA is incorrect in any material respect and is reasonably likely to have a material adverse effect on the ability of

                      either party to carry out duties under the CA;

 

            (e)      there is a breach by GER or BELL of any undertakings, covenants or obligation under the CA without cause or prior consent of the other party; and

 

            (f)       occurrence of any situation as specifically laid down in the CA.

 

3.4       Termination

 

             The CA can be terminated due to occurrence of event of default or prolonged force majeure events (as stipulated in the CA). Under both scenarios, BELL shall purchase from

             GER, and GER shall transfer to BELL, all GER’s rights, title and interest in the Equipment for a buy-out price and follow procedures as set out in Schedule B of the CA.

 

 

4.         FINANCIAL EFFECTS

 

            The CA will not have any effect on the issued share capital of the Company and the substantial shareholders’ shareholdings in the Company. The CA is not expected to have

            any material effect on the net assets of GPP and its group of companies (“GPP Group”) for the financial year ending 31 December 2019.

 

            The CA is not expected to have immediate effect on the earnings of GPP Group for the financial year ending 31 December 2019. However, it is expected to contribute positively

            to the future earnings of GPP Group.

 

5.         APPROVAL REQUIRED

 

            The CA is not subject to the approvals of the Company’s shareholders or any relevant authorities.

  

6.         INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED TO THEM

 

            None of the Directors and/or major shareholders of the Company and/or persons connected to them has any interest, whether direct and/or indirect in the CA.

 

7.         STATEMENT BY THE DIRECTORS

 

            The Board of Directors of GPP is of the opinion that it is within the ordinary course of business of the Group to enter into the CA and it is in the best interest of GPP Group.

 

 

This announcement is dated 18 October 2019.






Announcement Info

Company Name GPP RESOURCES BERHAD
Stock Name GPP
Date Announced 18 Oct 2019
Category General Announcement for PLC
Reference Number GA1-18102019-00040