Biofuels Corporation plc, an AIM-listed alternative fuel producer, is to be taken private in a restructuring deal involving its banker.

Biofuels Corporation plc, an AIM-listed alternative fuel producer, is to be taken private in a restructuring deal involving its banker.

The Teesside-based company has an agreement with Barclays to wipe out its £106 million debt in exchange for 94% of the equity in its main trading subsidiary.

Under the terms of the agreement, Barclays will also re-capitalise £40 million of Biofuels’ existing debt to use as working capital. This is not the first time the bank has supported the business after it extended its borrowings in March to keep the business trading.

The agreement has been unanimously approved by the company’s independent directors and is now conditional on shareholder consent at an emergency general meeting next month.

According to a Biofuels release, insolvency will be unavoidable if the proposal is not agreed at the meeting.

Last year, the company reported a £74.4 million loss following rising costs and a downturn in the biofuels market mainly due to volatile oil prices.