LAKE FOREST, Calif., June 1 /PRNewswire/ -- The L.L. Knickerbocker Co., Inc. (Nasdaq:KNIC - news) announced today that Arkenol Asia, Inc. and Central Resource Northern Development Corporation (``Central Resource''), a wholly-owned subsidiary of China Gold Supervision Bureau which is officially authorized to invest in overseas ventures, have signed a Letter of Intent (``LOI'') for Central Resource to invest at least $10 million for approximately five percent (5%) ownership interest in the Common Stock of Arkenol Asia.
The closing, which is scheduled for October 31, 1998, is subject to execution of a definitive investment agreement; completion by Central Resource of their due-diligence review; a feasibility study to be conducted by China's Ministry of Agriculture; Central Resource obtaining the necessary approvals from the Chinese government; Central Resource and Arkenol Asia reaching a final agreement on valuation and approval by Arkenol Asia's Board of Directors.
Arkenol Asia, Inc., a joint venture owned 50/50 by The L. L. Knickerbocker Co., Inc. and Arkenol Holdings, LLC, was formed to commercialize a patented technology for the conversion of various biomass feedstocks (e.g. sugar cane bagasse, rice and wheat straw and hulls, waste paper and tropical grasses) into commercial products, including alcohol based fuels, beverage alcohol and various bio-based chemicals.
The signing of the LOI followed four days of meetings in Tangshan, China, outside of Beijing. Participating in the meetings and witnessing the signing were principals of Central Resource Northern Development Corporation; China's Ministry of Agriculture; Regal Best Limited; Arkenol Asia and a representative of Arkenol Asia's investment banking firm, Raymond James & Associates, Inc.
Central Resource and Arkenol Asia have agreed that Tangshan, China will be the first site for Arkenol Asia's bio-refinery, based on economic, environmental and political considerations. The cost of the feasibility study, with an initial budget of $200,000, will be shared equally by Central Resource and Arkenol Asia. The LOI provides that use of proceeds for the $10 million received by Arkenol Asia for the sale of its common stock will be used for project development, investments in individual projects in China and other Asian countries, and corporate operating expenses.
Arkenol Asia's business contemplates the development, construction and operation of production facilities (bio-refineries) throughout Asia (e.g. China, India, Thailand and Vietnam). These projects may be vertically integrated with the production or procurement of biomass feedstocks and the marketing and distribution of end-products.
Through a Memorandum of Understanding dated December 17, 1997, Arkenol Asia, Central Resource and Regal Best Limited committed to a united effort to develop projects throughout China utilizing Arkenol Asia's technology. In that agreement, Central Resource committed to assist in the development of individual projects and, in addition, expressed a strong interest in acquiring an equity position in Arkenol Asia, Inc.
Raymond James & Associates, Inc., member New York Stock Exchange, is a wholly- owned subsidiary of Raymond James Financial (NYSE: RJF - news) and provides financial services to individuals, corporations and municipalities throughout the United States and overseas.
The L. L. Knickerbocker Co., Inc. is a diverse international company with operations in three strategic divisions: collectibles, jewelry and investments. The Company markets all of its products worldwide. Through its investments division, it has a 50% interest in Arkenol Asia, Inc., an approximate 28% equity interest in Pure Energy Corporation, and an approximate 13% equity interest in Ontro, Inc. [Nasdaq:ONTR - news], adjusted for a recent public offering.