China Integrated Energy Inc. (CBEH) has reached a preliminary agreement to acquire Hainan Lin Gao Chemical Co. for about $9 million and plans to build a biodiesel plant on land included in the deal.
The acquisition includes land use rights for about 15 acres and an oil-storage facility in the Hainan province. China Integrated said the location is near an abundant supply of low-cost feedstock, mainly bagasse–the fibrous residue left after sugarcane is crushed.
China Integrated last week unveiled plans to sell 2.2 million shares, and its plans for the proceeds included an expansion of its biodiesel capacity.
Earlier this month, China Integrated Energy said it’s poised to double its annual biodiesel output with a separate recent acquisition of a plant, along with the coming completion of a new production facility in Shaanxi province.
The company in November reported third-quarter earnings climbed 39% as sales surged 48% due to strong demand and higher prices.
Shares closed Friday at $7.33 and were inactive premarket.
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