You're reading: Active Energy Group acquires biomass exporter Nikofeso Holdings

London-listed Active Energy Group with operations in Ukraine announced on June 4 that it had entered into a conditional agreement to acquire 100 percent of Cypriot-registered Nikofeso Holdings, including its subsidiary Nikwood, which specializes in exporting high quality wood chip for biomass power generation and medium density fireboard manufacturing in Ukraine, for €4.4 million (about $5.75 million).

The company also said it has conditionally
raised a total of €3.6 million ($4.7 million) in order to provide working
capital for the enlarged group and to pay for costs associated with the
acquisition.

“This marks the start of the new Active Energy
Group,” said Englishman Richard Spinks, chief executive at Active Energy. “The
demand for wood chip/biomass is strong and expected to increase. We have the
expertise and advantageous geographic locations to procure, process and ship
quickly and efficiently and this will form a stable and profitable base upon
which we can build.”

The company’s report said the deal also will strengthen and supplement the
company’s existing forestry and associated exploitation rights in western Ukraine,
establishing it not only as a fully integrated provider of wood chips, but as
the chief operator in the Black Sea and Balkan regions.

Specifically, expanding in Ukraine provides Active Energy with rail
access to Belarus and Russia, sea access to the Middle East and Mediterranean
countries, as well as lower logistic costs and financial exposure, according to
the company.

Nikwood has wood processing facilities located in two deep-water ports
in Mykolaiv region. In 2012, the company processed 39,000 tons of wood.

Active Energy Ukraine has 10-year contracts for the purchase of wood, which
it processes into chip fuel in Ukraine and uses to replenish its supply to
power facilities in Poland.

In particular, under the contract, Liuboml Forestry in Volyn region will
deliver up to 100,000 tons of wood per year at a fixed price, while
Volyninvestbud will process raw materials into chip fuel at a fixed rate,
delivering up to 80,000 tons of finished products per year.

 Kyiv Post staff writer Christopher J. Miller can be reached
at 
[email protected], or on Twitter
at 
@ChristopherJM. Additional
information provided by Interfax Ukraine.