ReNu Energy (ASX:RNE) recommended that shareholders vote in favor of the sale of its Countrywide hydrogen business to Countrywide Hydrogen Holdings, for up to AU$1.1 million, in the absence of a superior proposal, and taking into account an independent expert's evaluation, according to a Friday filing with the Australian bourse.

The transaction involves the sale of the hydrogen business, related assets, and projects, with consideration including cash payments, the assumption of employee entitlements, equipment leases, and a cash royalty based on project revenues, the filing said.

The deal is expected to close in March 2025, pending shareholder approval at an extraordinary general meeting, the filing added.

The decision to divest follows market feedback and ReNu Energy's financial position, which has made it unable to fund further development of the Countrywide hydrogen business, the company said.

The divestment is expected to provide immediate operating cost savings and improve ReNu Energy's balance sheet, enabling the company to reposition itself as a cleaner, debt-free listed entity.