Interra Resources Limited (5GI), a petroleum exploration and production company, has collaborated with VibroPower Corporation Limited for a joint venture agreement and a convertible bond agreement.
As per the Joint Venture Agreement, Interra Resources and VibroPower will jointly work to establish a 2-megawatt solar farm in Sabah, Malaysia. With the generating capacity of up to 2,000 kilowatts of electricity from sunlight, it will serve as the foundation for a renewable energy supply business.
The project is estimated to cost S$3,000,000 for the total development and construction cost of the Solar Farm. Interra Resources will provide S$1,500,000, secured by the Convertible Bond, while VibroPower will be responsible for the excess development costs. Upon completion, the assets and profits of the Solar Farm will be shared equally between both companies.
Interra Resources has also entered into a Convertible Bond Agreement with VibroPower. The Convertible Bond, valued at S$1,500,000, will be used by VibroPower for the construction of the Solar Farm.
The firm said that the Convertible Bond has a redemption date of 36 months from its issuance, and Interest will be payable at a rate of 8.5% per annum. If VibroPower fails to meet its payment obligations, the Default Interest Rate will apply. VibroPower can redeem the Convertible Bond at any time with three months’ notice.
This comes as a part of Interra Resources’ commitment to venture into clean and renewable energy and is reported to have a significant impact on the Group’s financial figures. The company’s investment is approximately S$1,500,000 and will be funded by internal sources of funds.