Vulcan Energy Resources (ASX:VUL) - Managing Director, Dr Francis Wedin
Managing Director, Dr Francis Wedin
Source: The Market Herald
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  • Vulcan Energy Resources (VUL) has signed a binding agreement to acquire 100 per cent of German geothermal sub-surface consultancy GeoThermal Engineering
  • GeoT has been working closely with Vulcan since the beginning of its Zero Carbon Lithium Project, supporting Vulcan’s rapidly growing development team
  • Vulcan entered into a binding term sheet with the sole shareholder of GeoT, Dr. Horst Kreuter, who is also the Executive Director of Vulcan
  • Vulcan will acquire GeoThermal Engineering for a purchase price of just one euro (just under A$2)
  • Kreuter will also receive 50 per cent of any payments received from certain debtors to GeoT, if made within 18 months of the acquisition closing
  • Vulcan Energy Resources shares are down 6.22 per cent, trading at $8.45

Vulcan Energy Resources (VUL) has signed a binding agreement to acquire 100 per cent of geothermal sub-surface consultancy GeoThermal Engineering (GeoT).

GeoT has a world-leading scientific team based in the Upper Rhine Valley in Germany, with over a century of combined expertise in sub-surface development of geothermal projects, from exploration to production drilling.

GeoT has been working closely with the Vulcan team since the beginning of the Zero Carbon Lithium Project, making this an ideal acquisition for Vulcan, which plans to accelerate the project in Germany by rapidly growing its development team.

Vulcan entered into a binding term sheet with the sole shareholder of GeoT, Dr. Horst Kreuter, who is also the Executive Director of Vulcan.  Due to Dr. Kreuter being heavily involved with both companies, he was excluded from the negotiation process on Vulcan’s side, with the transaction negotiated at arm’s length.

It was agreed that Vulcan will acquire GeoThermal Engineering for a purchase price of just 1 euro (just under A$2).

Dr Kreuter will also receive 50 per cent of any payments received from certain debtors to GeoT, if made within 18 months of completion of the acquisition.

GeoT owes a dept of €140,000 (around A$219,000) plus interest to Dr. Kreuter. 50 per cent of this will be paid within three months of the acquisition, with the remaining 50 per cent to be paid by the end of 2021.

GeoT also has further debt of approximately €135,000 (roughly A$211,000) plus interest accrued in 2020.

Before the deal can close, however, Vulcan will need to undertake a due diligence review to ensure the deal meets its sole discretion and satisfaction.

This acquisition did not require shareholder approval as Dr Kreuter was excluded from the negotiation process on Vulcan’s side and the terms of the acquisition are on arm’s length in terms of the consideration payable compared to the value of the assets being acquired.

Vulcan Energy Resources shares are down 6.22 per cent, trading at $8.45 at 9:55 am AEDT.

VUL by the numbers
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