Plant Impact is in exclusive negotiations with one of the top 10 agrochemicals companies in the world about a global licence for BugOil.
The crop yield improvement technology developer has signed a letter of intent with the potential partner, which has also lent the company £750,000. This loan will be drawn down over a period of 180 days. The interest rate is LIBOR plus 3%.
The loan will be secured on the intellectual property of Plant Impact so it needs to make sure it is in a position to pay it back within three years of the date of the loan agreement. Up to 50% of the royalty payments from any agreement can be offset against the interest and principal owed to the potential partner.
Evaluation trials have already been carried out on BugOil by the potential partner. The deal would involve a global licence for all uses other than home and garden and animal health. The licence will be for 20 years - or the life of the patents. There will be milestone payments as well as royalties on sales.
The deal could evolve to include some of Plant Impact’s other technologies.
The licensing agreement should be finalised by the end of the first half of 2009.
Shares in Plant Impact rose 1.5p to 17.5p each, valuing the company at £4.6m.
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