3/6/06 (The Star) - UK RENEWABLE fuels company, Biofutures International Plc, is in talks to buy a biodiesel plant in Malaysia in a deal which will result in the takeover of the British firm.

Biofutures is in early stage discussions with a Malaysian company concerning the possible acquisition of a project to construct a biodiesel plant in Malaysia, it told the London Stock Exchange in an announcement.

The firm is listed on the Alternative Investment Market of the London Stock Exchange.

"Should binding terms be agreed in respect of this project, the acquisition would amount to a reverse takeover under AIM rules," said spokesman Philip Charter. Shares of the company were suspended on Thursday.

It did not name the Malaysian company.

AIM caters to companies in the early stages of their development, which is almost equivalent to the Mesdaq market of Bursa Malaysia. The Mesdaq market is for high growth and technology-based companies.

A Malaysian Palm Oil Association official said the deal makes sense from a commercial point of view because a palm oil-related company should be located near the source of its raw material.

Malaysia is currently building 10 biodiesel plants with 12 more to follow. Out of the ten plants, three are joint ventures between the Malaysian Palm Oil Board and three firms.

They are Golden Hope Plantations Bhd, Kumpulan Fima Bhd and Carotino Sdn Bhd, which are expected to be operational by the end of the year.