TIDMEQT
RNS Number : 8373H
EQTEC PLC
08 December 2020
8 December 2020
EQTEC plc
("EQTEC", the "Company" or the "Group")
Agreement to acquire Deeside RDF Project following further
progress
EQTEC plc (AIM: EQT), a world leading gasification technology
solutions company for sustainable waste-to-energy projects, is
pleased to announce that, further to its announcement of 23 July
2020, EQTEC's wholly owned subsidiary, Deeside WTV Limited (the
"Buyer"), has signed a Share Purchase Agreement (the "SPA") with
Logik Developments Limited ("Logik") to acquire full ownership of
the Deeside Refuse Derived Fuel ("RDF") project (the "Project")
from Logik through the acquisition of Logik WTE Limited (the
"Project SPV") .
The Project is part of a portfolio of projects currently under
review by a European owner-operator of waste to energy
infrastructure, which is expecting, assuming, inter alia,
completion of final credit review and finalisation of
documentation, to provide the financing required for the
construction phases and commercially operate the plants and this
Project via investment into Deeside. Assuming the requisite
financing is provided, EQTEC expects to act as the project
developer on the Project, providing the design and core advance
gasification technology and retain a portion of the O&M
contract.
Conversations with potential EPC companies are ongoing and the
documentation required for tendering the EPC contract for the first
phase of the Deeside RDF Project is currently being produced. Once
full commercial EPC offers are reviewed and negotiated to contract,
a final decision will be reached with regards the funding structure
for the Project, on which EQTEC will then provide an update to
shareholders.
EQTEC and Logik are progressing discussions about a potential
framework collaboration agreement that is expected to cover the
keys terms of a proposed cooperation for the development of a
portfolio of waste to energy projects that Logik is currently
pursuing in the north of England and across the UK.
David Palumbo, CEO of EQTEC, commented:
"We are pleased to have signed this SPA to acquire the Project
SPV for the Deeside RDF Project after completing our due diligence,
making good progress on funding discussions and shortlisting EPC
companies for the Project. We estimate that, with the application
of EQTEC's advanced gasification technology, the Project would
convert hundreds of thousands of tonnes per year of non-recyclable
everyday household and commercial waste otherwise destined for
landfill or incineration.
In this way, EQTEC expects to be able to significantly improve
both the economics and the environmental impact of this plant and
many traditional waste-to-energy facilities, bringing employment to
the local area and economic and environmental benefits to both the
local community and large industrial energy users, whilst
delivering attractive returns to EQTEC's shareholders ."
About the Deeside RDF Project
The Project comprises 6.27ha of land at the Deeside Industrial
Estate, which currently has planning permission for a waste
management facility comprising the recycling of waste, the
production of RDF and an anaerobic digestion facility, in
Flintshire, Wales.
EQTEC is seeking additional planning permission such that its
advanced gasification technology can be applied to the Project,
which would reduce the environmental impact of the Project, whilst
also improving its economics. EQTEC has been in discussions with
the local authority, which has been supportive and is keen to
utilise EQTEC's advanced gasification infrastructure as an
alternative to incineration technologies.
Subject, inter alia, to additional planning and the requisite
financing, EQTEC estimates that, with the application of its
advanced gasification technology, the Project would convert
hundreds of thousands of tonnes per year of non-recyclable everyday
household and commercial waste, otherwise destined for landfill or
incineration, into 20MW of green electricity, enough to power
37,500 homes, and 27MW of thermal heat production. The electricity
and heat could be exported to the grid and/or sold locally. The
Company's preference would be to create private wire and heat
networks using the surplus electricity and heat, as it is already
aware of interest from a large industrial energy user in the
area.
EQTEC estimates that the additional capacity for the thermal
conversion of waste, utilising the Group's advance gasification
technology, would generate additional revenues for the Project SPV
of c.GBP16 million in gate fees, c.GBP6 million in electricity
sales and up to GBP1.5 million in heat sales.
Key terms of the SPA
-- Initial consideration of GBP2,310,000 of which a deposit
amount of GBP300,000, from which the existing exclusivity payment
of GBP100,000 will be deducted, is payable on signing of the SPA
and the balance of GBP2,010,000 payable on or before a date 12
months from the date of signing of the SPA (and which sum shall be
netted off the existing debts of the Project SPV).
-- Additional deferred conditional consideration of GBP2,290,000
payable on the achievement of certain conditions precedent related
to development milestones of the Project.
-- The issue of a fixed dividend share in the Buyer to Logik,
which gives the Logik the right to 5% of distributable profits in
the Buyer. This share carries no voting rights in the Buyer.
-- An additional development premium or overage payment, subject
to a maximum further amount of GBP5.4 million, calculated in
accordance with an agreed formula payable on the achievement of
each of the following:
o Financial close on the funding for the Waste Reception &
Anaerobic Digestion plant on the site for which planning and the
necessary permits have been obtained ("Project Phase I").
o Financial close as defined on the funding for the Advanced
Gasification plant on the site for which planning and the necessary
permits have been obtained ("Project Phase II").
Neil Spencer, Director of Logik, commented:
" LOGIK secured planning on the proposed project site over 12
months ago and, together with EQTEC, we look forward to continuing
to work closely with all local stakeholders to help ensure this
project gets built and secures additional planning that will
further enhance the benefits to the local community.
We are very encouraged to be working with a team with the
experience and credibility of EQTEC and remain optimistic of what
we expect to achieve in Deeside and in further potential
collaborations with EQTEC on a portfolio of waste to energy
projects that Logik is currently progressing in the north of
England and across the UK. "
This announcement contains inside information as defined in
Article 7 of the EU Market Abuse Regulation No 596/2014 and has
been announced in accordance with the Company's obligations under
Article 17 of that Regulation.
ENQUIRIES
EQTEC plc +353 21 2409 056
David Palumbo / Gerry Madden
------------------------------
Strand Hanson - Nomad & Financial Adviser +44 20 7409 3494
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James Harris / James Dance / Jack Botros
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Arden Partners - Broker +44 20 7614 5900
------------------------------
Paul Shackleton (Corporate) / Simon Johnson
(Sales)
------------------------------
Maitland/AMO - Communications & PR/IR Advisor +44 20 7379 5151
------------------------------
James Benjamin / Rhys Jones EQTEC-maitland@maitland.co.uk
------------------------------
About EQTEC plc
EQTEC is a world leading advanced gasification technology
partner with proven proprietary and patented technology for
waste-to-value applications.
EQTEC designs and supplies advanced gasification solutions that
have a higher efficiency product offering and are modular and
scalable from 1MW to 25MW. EQTEC's versatile solutions are
independently proven to process over 50 different types of
feedstock, including municipal waste, agricultural waste, biomass
and plastics with no hazardous waste or toxic emissions. EQTEC's
solutions produce a uniquely pure high-quality synthesis gas
(syngas), that is capable of being used for the widest applications
in the creation of energy, hydrogen and biofuels.
Proprietary technology design together with deployment and
maintenance capabilities mitigate the risks when using third party
equipment. Our Technology Integration capabilities enable us to
lead collaborative ecosystems that build sustainable waste
elimination and green energy infrastructure.
The Company is quoted on AIM (ticker: EQT) and the London Stock
Exchange awarded EQTEC the Green Economy Mark that recognises
listed companies with 50% or more of revenues from
environmental/green solutions.
Further information on the Company can be found at
www.eqtec.com
About Logik Developments
"Advancing cities through collaboration"
As a specialist strategic land developer, it's our drive to
responsibly shape the communities we know and love by collaborating
with sector specialists. Logik was born out of a passion for the
North.
The Logik team has more than 50 years' experience in responsibly
developing strategic sites. Creating a legacy is at the heart of
absolutely everything we do, which is why our collaborative
approach with funders and city authorities has impact and ensures
we're able to unlock and transform new spaces. Through our
connections, we're able to bring new and unique sites to market
which not only advance a city's strategic masterplan but also
deliver long term value to the community, through aspirational
residential developments as well as waste to energy projects.
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