Interra Resources Limited (5GI), a petroleum exploration and production company, has announced a significant partnership with VibroPower Corporation Limited for a joint venture agreement and a convertible bond agreement.
Under the Joint Venture Agreement, Interra Resources and VibroPower will collaborate to establish a 2-megawatt solar farm in Sabah, Malaysia. This solar farm, capable of generating up to 2,000 kilowatts of electricity from sunlight, will serve as the foundation for a renewable energy supply business.
The total development and construction cost for the Solar Farm is budgeted at S$3,000,000. Interra Resources will provide S$1,500,000, secured by the Convertible Bond, while VibroPower will be responsible for the excess development costs. Upon completion, the assets and profits of the Solar Farm will be shared equally between both companies.
In conjunction with the Joint Venture Agreement, Interra Resources has entered into a Convertible Bond Agreement with VibroPower. The Convertible Bond, valued at S$1,500,000, will be used by VibroPower for the construction of the Solar Farm.
A crucial condition for the completion of the Convertible Bond Agreement is the execution of a Personal Guarantee by Mr. Benedict Chen Onn Meng, the Executive Director, Chief Executive Officer, and controlling shareholder of VibroPower.
The Convertible Bond has a redemption date of 36 months from its issuance, and Interest will be payable at a rate of 8.5% per annum. If VibroPower fails to meet its payment obligations, the Default Interest Rate will apply. VibroPower can redeem the Convertible Bond at any time with three months’ notice.
The Transactions are part of Interra Resources’ commitment to venture into clean and renewable energy and have a significant impact on the Group’s financial figures. The company’s investment is approximately S$1,500,000 and will be funded by internal sources of funds.