Pennpetro Energy seeks to buy Canadian indigenous bioenergy company
In Canada, Pennpetro Energy has entered into Heads of Agreement with Indigenous Canadian Energy Holdings Inc. (‘ICENERGY’) in relation to the proposed acquisition by Pennpetro of the entire issued share capital of ICENERGY. The Heads of Agreement are non-binding, save for certain provisions described below.
The Proposed Transaction follows the Company’s previous announcement on 15 September 2026 confirming ICENERGY as its reverse takeover target and that the Heads of Agreement would be finalized after the Company’s annual general meeting on 30 September 2026.
ICENERGY is a Canadian transition energy business focused on the steam-enhanced treatment of lignocellulosic fiber. As previously announced, its business includes the proposed conversion of low-quality waste wood fiber into high-value pelletized biofuel for use as a replacement for coal in residential and industrial heat and power generation markets, initially in the European Union, starting with Poland, where first deliveries are scheduled for December 2026.
Under the Heads of Agreement, Pennpetro would acquire the entire issued share capital of ICENERGY from its shareholders. The consideration would be satisfied wholly through the allotment and issue of new ordinary shares in Pennpetro to ICENERGY’s shareholders. No cash consideration would be payable.
ICENERGY’s shareholders would own not less than 90 per cent. of Pennpetro’s issued share capital immediately following completion, before the proposed placing described below and on the basis that Pennpetro has no material assets or liabilities at completion. The percentage remains subject to the agreed treatment of Pennpetro’s existing obligations and outstanding options, warrants, convertible securities and other equity interests, and to the definitive transaction documentation.
In connection with the Proposed Transaction, Pennpetro, with the cooperation of ICENERGY, has agreed to use reasonable endeavours to raise £20 million before expenses through a placing of new ordinary shares, conditional upon re-admission. No placing commitments have yet been obtained.
Under the Heads of Agreement, the placing shares would represent a maximum of 20 per cent. of the enlarged issued share capital immediately following completion of the Proposed Transaction and the placing, based on a pre-money valuation of the enlarged group of at least £80 million.
The net proceeds are expected to be applied towards ICENERGY’s retail business, including the construction of a wholly owned retail production plant (current supply comes from a contracted third-party facility), retail sales and marketing in Europe, working capital and the costs associated with the Proposed Transaction and placing.
Completion of the Proposed Transaction will be conditional upon the placing raising not less than £20 million before expenses. ICENERGY will also have the right to terminate the Heads of Agreement if firm written indications of interest for at least £15 million have not been obtained by 31 January 2027.
Category: Fuels
