D1 Oils says Lord Oxburgh to become chairman in 2007 - UPDATE

D1 Oils says Lord Oxburgh to become chairman in 2007 - UPDATE
Life Style Extra - UK
LONDON (AFX) - D1 Oils PLC, the UK biodiesel producer, said Lord Oxburgh is to become chairman of the group early next year, replacing Karl Watkin. ...

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LONDON (AFX) - D1 Oils PLC, the UK biodiesel producer, said Lord Oxburgh is to become chairman of the group early next year, replacing Karl Watkin.

Oxburgh, former chairman of Shell Transport and Trading PLC and a known advocate of the need to tackle climate change issues, has just joined D1 as a non-executive director.

'This is a business that is making a difference in the world and the presence of Lord Oxburgh as its chairman will enhance that capability immensely. I can think of no better person to lead the board,' said Watkin, who will remain remain a non-executive director once Oxburgh takes over his role.

D1 announced the board changes after it unveiled losses of 4.7 mln stg in the first half, as against losses of 3.3 mln last time, as the group invests heavily in business expansion, both in the UK and overseas. Turnover was steady at 32,600 stg.

The group is aiming to build refining capacity in the UK to 320,000 tonnes next year, then to 420,000 tonnes in 20008, from 32,000 tonnes currently.

That will allow D1 to capture a sizable chunk of Britain's emerging biodiesel market, which is expected to grow dramatically once new environmental regulations take effect.

The UK will be imposing a mandatory 5 pct biodiesel blend under the Renewable Transport Fuels Obligation (RTFO) under the Kyoto climate change treaty, which will be phased in progressively from 2008 to 2010.

Elliott Mannis, the chief executive, believes the new rule will create an annual biodiesel market of 'at least 1 mln tonnes'.

'It's a very, very young industry... and there's only a small number of companies (competing in the market),' he told AFX News in a phone interview.

D1 is currently negotiating contracts with a number of potential buyers, he said, noting that biodiesel is normally priced at a minimum 15 pct premium to ultra-low sulphur diesel.

It has sufficient funding to back its growth ambitions, which will require a further 8 mln stg in 2007 alone, Mannis added.

The group has cash of around 13 mln stg and another 5 mln usd in credit facilities. It is also finalising a lease finance package with Allied Irish Bank and Investec that will back the planned refinery roll-out.

Turning to the bid interest that D1 received two months ago, Mannis said discussions with 'a number of parties' are continuing.

He refused to name the parties involved and to say when talks will conclude.

These parties are interested in either buying a substantial stake in the company or taking over the entire business, Mannis said, reiterating the group's July 5 statement.

Regardless of the outcome of these talks, D1 is committed to pressing ahead with its business plans, said Mannis.

At 10.02 am, D1 shares were down 3 at 205 pence.

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