Pressure Technologies, the Sheffield-based specialist engineering group, has announced its intention to sell PT Biogas Holdings for £11.1 million.
The wholly-owned subsidiary is a holding company for the Group’s Alternative Energy Division – which trades under the name Greenlane Biogas.
The company has signed a binding letter of intent with listed capital pool company Creation Capital Corp to offload the business.
The deal is broken down into a £5 million sum on the completion; £2 million payable in common shares of Creation Capital on Completion, and a further £4.1 million by way of a promissory note to be issued by Creation Capital on completion.
Chris Walters, Chief Executive of Pressure Technologies, said: “The global outlook for renewable natural gas (RNG) has improved again throughout the year with governments and energy majors increasing their commitment to renewables in the global energy mix, with RNG playing a significant role, particularly in the US and Europe.
“In June 2018, due to its significant potential, we announced that strategic options would be evaluated for our AE Division that would increase market opportunities and help unlock shareholder value. Our strategic option review also considered refocusing the Group on core specialist manufacturing activities in the defence and oil and gas markets.
“As a result of this strategic review and following the appraisal of outright sale and merger options, we have commenced a process to spin out Greenlane and list it on the TSX Venture Exchange, which will be accomplished by selling it to Creation Capital.
“We will remain a supportive minority shareholder and anticipate retaining our holding for the medium term.”