VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 06/19/12 -- BioteQ Environmental Technologies Inc. (TSX: BQE), a leader in the treatment of industrial wastewater, announces that it has agreed to sell the majority of equipment from its SART plant, located in Lluvia, Mexico, to the site owner, NWM Mining, for US$650,000. BioteQ expects to receive a cash payment of $650,000 by June 22, 2012, and ownership of the equipment will be transferred to NWM Mining on an 'as is' basis.
As part of the sale arrangement, BioteQ will maintain ownership of the process logic control (PLC) system that forms a key intellectual property component of the plant. BioteQ will be removing the PLC and related equipment from the site.
The equipment sale agreement follows the settlement of legal claims by BioteQ against NWM in April for unpaid lease payments. Under the terms of the settlement, BioteQ was obligated to remove the SART plant by September 30, 2012. The US$650,000 payment to be received by BioteQ for the equipment sale is in addition to the CDN$1.3 million NWM has agreed to pay BioteQ over the next two years.
Jonathan Wilkinson, BioteQ's CEO stated, 'After settling the lawsuit against NWM, BioteQ evaluated all available options associated with the equipment located at the Lluvia, Mexico site. We looked at options in terms of both the returns that could be generated as well as the overall desirability of the transaction. After significant work, review and consideration, we have concluded that the sale of the equipment to NWM represents the best available option for BioteQ and its shareholders. This option avoids the significant costs associated with demobilization and generates a material incremental cash contribution. We believe the asset recovery provided for in this agreement provides the best value possible for our shareholders, under the circumstances.'
The plant in Mexico was built in 2008. It has been idle since NWM ceased making payments to BioteQ under the lease to own arrangement.
Prior to entering into negotiations with NWM regarding sale of the equipment, BioteQ evaluated all other relevant options. These options included repurposing the equipment for use in another plant, and demobilisation of the plant and the subsequent sale of all components that are in useable condition.
The $650,000 payment will be recognized in the second quarter financial statements as a recovery of the impairment charge recognized in 2010. Further, BioteQ had accrued $375,000 for demobilization related costs, which will be reversed. The income statement impact of this sale will be a positive contribution of $1,025,000 to net income and the impact on cash flow will be $650,000 for 2012.
BioteQ Corporate Profile
BioteQ is an innovative clean technology leader in global industrial water treatment, serving the mining and energy markets. The company's proven technologies have been applied at sites around the world to recover dissolved metals and remove sulphate, producing clean water and eliminating residual waste. BioteQ is headquartered in Vancouver, Canada and trades on the TSX under the symbol BQE. Please visit our website at www.bioteq.ca for additional information.
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