Interra Resources Limited (5GI), a petroleum exploration and production company, has unveiled a substantial collaboration with VibroPower Corporation Limited, marked by a joint venture agreement and a convertible bond agreement.
Under the Joint Venture Agreement, Interra Resources and VibroPower are set to join forces in the establishment of a 2-megawatt solar farm in Sabah, Malaysia. This solar facility, capable of harnessing sunlight to generate up to 2,000 kilowatts of electricity, lays the foundation for a renewable energy supply business.
The total budget for the development and construction of the Solar Farm is estimated at S$3,000,000. Interra Resources will provide S$1,500,000, backed by the Convertible Bond, while VibroPower will assume responsibility for any additional development costs. Once completed, both companies will equally share the assets and profits generated by the Solar Farm.
Simultaneously, 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 allocated by VibroPower to finance the construction of the Solar Farm.
A pivotal condition for the completion of the Convertible Bond Agreement is the provision of a Personal Guarantee by Mr. Benedict Chen Onn Meng, the Executive Director, Chief Executive Officer, and controlling shareholder of VibroPower.
The Convertible Bond comes with a redemption date set at 36 months from its issuance, featuring an annual interest rate of 8.5%. In the event that VibroPower defaults on its payment obligations, the Default Interest Rate will apply. VibroPower retains the option to redeem the Convertible Bond at any time, subject to a three-month notice period.
These strategic transactions represent Interra Resources' commitment to expanding into clean and renewable energy sectors, and are expected to have a significant impact on the company's financial performance. The investment, totaling approximately S$1,500,000, will be financed through internal funding sources.