SINGAPORE - Mainboard-listed USP Group and the potential buyer of its 93.09 per cent-owned biofuel subsidiary now have until July 5 to enter into a definitive sales and purchase agreement (SPA) for the $5.59 million deal.

On June 18, the buyer, AJ Jetting Pte Ltd, and USP amended the term sheet for the proposed disposal of Biofuel Research, extending the deadline for the SPA from June 15 to July 5 to allow for further negotiations.

Pursuant to the extension, USP received a good faith advance payment of $1.4 million from the buyer, subject to completion of the sale, USP said in a filing late on Wednesday night (June 19).

Both parties had on May 23 entered into the legally binding term sheet for the deal.

USP said in a Feb 20 filing that the disposal will strengthen its financial position and improve its cash position. It had most recently reported a net loss of $21.3 million for the year ended March 31, 2019, on exceptional items.

Selling the biofuel unit will also allow the group to better focus on its marine business, USP said on Feb 20.

Biofuel Research is one of the first companies in Singapore to pioneer proprietary technology to convert waste oil to biodiesel.

Aside from its oil trading and marine equipment trading segments, USP is also involved in property development.

Shares of USP, which is on the Singapore Exchange's watch-list, ended Wednesday down 0.5 cent or 6.25 per cent at $0.075.