Item 1.01
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Entry into a Material Definitive Agreement.
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On February 27, 2017, Clean Energy Renewable Fuels,
LLC (Renewables), an indirect subsidiary of Clean Energy Fuels Corp. (the Registrant), entered into an asset purchase agreement (the APA) with BP Products North America, Inc. (BP), pursuant
to which Renewables agreed to sell to BP certain assets relating to the Registrants renewable natural gas (RNG) business (collectively, the Assets) (such transaction, the Asset Sale). Subject to
the satisfaction of customary closing conditions, including, among others, the receipt of required governmental and third-party consents and approvals, the Asset Sale is expected to close on or before March 31, 2017.
Pursuant to the terms of the APA, the Assets include the RNG production facilities located at Republic Services landfills in Canton, Michigan and North
Shelby, Tennessee, Renewables 50% ownership interest in joint ventures formed in November 2016 to develop new RNG production facilities at a Republic Services landfill in Oklahoma City, Oklahoma and an Advanced Disposal landfill near Atlanta,
Georgia and Renewables third party RNG supply contracts. Following completion of the Asset Sale, Renewables and the Registrant will continue to obtain RNG from BP under a long-term supply contract, and resell such RNG through its natural gas
fueling infrastructure as Redeem, the Registrants RNG vehicle fuel.
As consideration for the Assets, BP has agreed to pay $155.0 million
(the Purchase Price). At the Closing of the Asset Sale, BP will pay $30.0 million of the Purchase Price in cash and deliver to Renewables a promissory note, for $125.0 million, that matures on April 3, 2017. Pursuant to the
terms of the APA, BP will also pay up to an additional $25.0 million in cash, which amount could be paid in whole, in part or not at all.
The APA
includes representations, warranties,
pre-
and post-closing covenants and termination provisions customary for asset sale transactions of this nature. The APA also includes indemnification provisions that,
subject to certain carve-outs, qualifications and exceptions as set forth in the APA, could subject Renewables to payment obligations upon its breach of the terms of APA.
The foregoing description of the APA does not purport to be complete and is qualified in its entirety by the full text of the APA, which is filed as
Exhibit 2.11 to this Current Report on
Form 8-K
and is incorporated herein by reference. The APA contains customary representations and warranties by the parties thereto, which were made solely for
the purpose of the APA and as of specific dates as set forth therein, may have been qualified by certain private disclosures made between the parties and are subject to a contractual standard of materiality different from that generally applicable
to stockholders, among other limitations. As a result, these representations and warranties should not be relied upon as a disclosure of factual information.
The Registrant issued a press release on March 1, 2017 announcing the APA, a copy of which is attached as Exhibit 99.1 to this Current Report on
Form 8-K.