Velocys customer Red Rock Biofuels cuts size of firm reactor order StockMarketWire.com - Alternative fuel company Velocys said it had agreed to a series of amendments in its licensing contracts with Red Rock Biofuels in order to speed up completion of a planned bio-refinery.
The changes were related to RRB's license of Velocys Fischer-Tropsch reactors and proprietary catalyst for the RRB biorefinery under construction in Lakeview, Oregon.
They included Velocys accelerating the delivery of the first of four reactors and first four charges of catalyst.
There had also been a reduction in the firm commitment for reactors from six to four, but RRB would retain an option to acquire reactors five and six until the end of 2020,.
The changes would have a positive impact on Velocys' near-term cash flow of an estimated $1.1m, but a decrease in revenue of nearly $3m.
Should RRB exercise its option to purchase the two additional reactors the total contract value would return to about $15m.
RRB remained committed to purchase a total of six charges of catalyst in 2019.
'We collaborated with RRB to re-optimise the original agreement to help them complete the biorefinery on their desired timeline,' chief executive Henrik Wareborn said.
'This is an opportunity for us to demonstrate our commitment to delivering for our client the central processing unit in their biorefinery that will convert woody biomass to renewable jet fuel and diesel in Oregon.'
At 9:44am: [ LON:VLS] Velocys share price was -0.01p at 3.92p