Drax to acquire remaining 10% interest in Alabama Pellets

Drax is pleased to announce that it has agreed to acquire the remaining 10 percent minority interest in Alabama Pellets LLC joint venture, from Two Rivers Lumber Co LLC for a cash consideration of US$22 million.

The acquisition of Pinnacle Renewable Energy Inc. in April 2021 included a change of control provision over Alabama Pellets, in which Two Rivers held a 10 percent interest.

Alabama Pellets is comprised of the Aliceville and Demopolis pellet plants. Aliceville, which commissioned in 2018, has a nameplate production capacity of 300,000 metric tons per annum. Demopolis, which commissioned in 2022 and is co-located with a Two Rivers sawmill, has a nameplate production capacity of 360,000 metric tons per annum. The acquisition will provide Drax with net economic control over a further 66,000 metric tons of sustainable biomass production capacity per annum, rights over land associated with Demopolis and extend long-term fiber supply arrangements.

Two Rivers is considered to be a Related Party under the U.K. Listing Rules with the proposed transaction constituting a Smaller Related Party Transaction under Listing Rule 11.1.10.

Completion is expected to take place in October 2022.