Green EnviroTech Inks Deal with Fund Manager

Green EnviroTech Holdings Corp. (GETH), Riverbank, Calif., has signed a Letter of Intent (LOI) with the fund manager 5 Stone Green Capital LLC, based in New York, which seeks to create a partnership that will assist GETH in building facilities capable of converting of plastic scrap from auto shredder residue (ASR) to oil.

The LOI is initially targeting the U.S. market, although the company is considering business opportunities outside North America.

GETH expects the facility to require around $5 million in financing to acquire the building and installing the equipment. Under the LOI, 5 Stone will acquire the building and land, while Green EnviroTech is working with private bankers to obtain funding to purchase equipment.

Gary De Laurentiis, chairman and CEO of GETH, expects the first facility to be operational by the third quarter of 2012. The Sheboygan facility will take in ASR generated by Miller Compressing’s auto shredder. The company is expected to process around 100,000 tons of ASR from the facility per year.

De Laurentiis says that GETH’s equipment will initially allow the company to extract about 23 percent of the ASR that is plastic. Later on, he notes, the equipment will be able to process fiber and non-tire rubber that also is included in the ASR.

Under the LOI, 5 Stone has a right of first offer to provide financing on subsequent GETH projects where ASR will be consumed, plus the right to participate in any future financing of projects for ASR recycling for up to 20 percent of the total financing.

"By working with 5 Stone GETH benefits from both their financing and expert knowledge of developments in the environmental field. I look forward to a very meaningful partnership with them," says De Laurentiis.

Lewis Jones, managing principal of 5 Stone Green Capital, states, "5 Stone is excited about its collaboration with Green EnviroTech. Its strategy is well aligned with 5 Stones’ focus on green manufacturing that has a compelling business model, is environmentally friendly and creates jobs."