TIDMEQT
RNS Number : 0035B
EQTEC PLC
04 June 2019
4 June 2019
EQTEC plc
("EQTEC" or the "Company")
Investment in North Fork Community Power
EQTEC plc (AIM: EQT), the technology solution company for waste
gasification to energy projects, is pleased to announce that,
further to the framework agreement with Phoenix Biomass Energy,
Inc. ("Phoenix") announced on 22 May 2019, it has signed its first
agreement regarding the joint development of a biomass gasification
power project in California, USA.
The Company has signed a legally binding agreement with Phoenix
and North Fork Community Development Council ("NFCDC") (the
"Agreement"), to acquire 19.99% ownership of North Fork Community
Power LLC ("NFCP"), a special purpose vehicle ("SPV") formed to
build and operate a 2MW biomass project in North Fork, California
(the "Project"). The consideration for the Company's investment
will be solely satisfied by the supply of certain items of the
existing equipment currently held at EQTEC's Newry site, valued at
US$2.5 million and no cash consideration will be required.
EQTEC also expects to invoice NFCP EUR2.2 million, under a
separate sales contract, for the sale of further equipment and the
supply of engineering and design services to NFCP. The sales
contract, which will involve a substantial down payment on signing
together with further agreed milestone payments until
commissioning, is expected be completed and signed by the end of
June 2019.
On commissioning the Project is estimated by NFCP to have a
valuation of approximately US$20 million and be capable of
generating annual revenues of approximately US$4 million.
NFCP holds the lease for the Project's site as well the relevant
permits, power purchase agreement and various other commercial
agreements required for the development of the Project. Initial
works have already commenced on site and the EPC contractor has
been engaged.
Ian Price, Chief Executive Officer of EQTEC, commented:
"We are delighted that our framework agreement with Phoenix is
already progressing at speed and creating significant value to all
stakeholders. We look forward to signing the sales contract over
the coming weeks and visiting the US to explore further
opportunities and projects together. This transaction fits with our
strategy to have diversified revenue streams and it is a major step
for the Company and for all shareholders."
Gregory Stangl, Chief Executive Officer of Phoenix,
commented:
"The technology developed by EQTEC represents a repeatable,
scalable solution that could have a big impact on California's tree
mortality crisis and related climate challenges. We are delighted
to have a partner who shares a vision for building out a network of
distributed biomass generation."
Further information on the Agreement
Pursuant to the Agreement:
-- EQTEC will contribute equipment valued at US$2.5 million into
NFCP as consideration for the investment;
-- EQTEC will be allotted 19.99% of the total ownership of NFCP;
-- EQTEC will become one of three Managing Members of NFCP, with
rights and privileges equivalent to the existing Managing Members
to be further detailed in an operating agreement;
-- It is intended that an operating agreement be completed prior
to financial close which is expected to be by 30 June 2019; and
-- The Agreement is legally binding subject only to obtaining of
all standard corporate authorisations required on the part of NFCP
and its members.
About NFCP
NFCP is currently building the Project on the site of a former
mill in North Fork, California, which it intends to own and
operate. NFCP is the entity that controls the site, owns the
Project and holds the relevant permits, power purchase agreement
and various other commercial agreements. Phoenix and NFCDC are
existing shareholder and Managing Members of NFCP.
NFCP is an SPV set up specifically for this Project and has not
previously traded.
Separately, the Company also updates shareholders that the
commercial proposal made by the Company to the owners of the Usk
Project, as announced on 9 April 2019, did not reach an acceptable
agreement and the Company has no further interest in this
project.
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
Enquiries
EQTEC plc +353 (0)21 2409 056
Ian Price - Chief Executive
Officer
Gerry Madden - Finance Director
Strand Hanson - Nomad, Financial
Adviser & Broker +44 (0) 207 409 3494
James Harris/Richard Tulloch/Jack
Botros
IFC Advisory - Financial PR
& IR +44 (0) 203 934 6630
Tim Metcalfe / Miles Nolan /
Zach Cohen
Notes to Editors
About EQTEC plc
EQTEC's business model involves sourcing and providing
assistance in developing waste elimination projects to which it
will ultimately sell its EQTEC Gasifier Technology ("EGT") and
O&M services. EGT enables project developers to construct waste
elimination plants and recover electrical and thermal energy from
the waste streams.
EQTEC sources projects that have a local supply of waste in need
of elimination and conversion. It builds relationships and brings
together the developers, the waste owners, the building contractors
and funders. It then supplies the energy recovery technology and
provides engineering services to the projects. Furthermore, EQTEC
will provide O&M services to the operating projects generating
recurring revenues over the life of the projects.
The Company is quoted on AIM and trades as EQT. Further
information on the Company can be found at www.eqtecplc.com.
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END
AGREANKDEAENEFF
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