TIDMEQT
RNS Number : 0902J
EQTEC PLC
18 December 2020
18 December 2020
EQTEC plc
("EQTEC", the "Company" or the "Group")
Signing of Call Option and Exclusivity Agreement to acquire the
waste gasification and power plant Project Site at Billingham,
UK
EQTEC plc (AIM: EQT), a world leading gasification technology
solutions company for sustainable waste-to-energy projects, is
pleased to announce that Haverton WTV Limited (the "Buyer" and a
wholly owned subsidiary of the Company) and Scott Bros. Enterprises
Limited ("Scott Bros") have signed a Call Option and Exclusivity
Agreement ("Option Agreement") relating to the purchase of the land
on which the proposed up to 25 MWe Billingham waste gasification
and power plant (the "Project") at Haverton Hill, Billingham, UK,
will be constructed (the "Project Site").
This announcement is further to the Company's announcements of 8
May 2019, 23 October 2019, 23 June 2020, 18 September 2020 and 23
November 2020, regarding the Project.
The Project at Billingham, UK, 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 requisite
documentation, to provide the financing required for the
construction phases and commercially operate the plants and this
Project. Assuming the requisite financing is provided, EQTEC
expects to act as the co-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 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.
David Palumbo, CEO of EQTEC, commented:
"We are pleased to have signed this call option and exclusivity
agreement to acquire the Project Site after completing our due
diligence, making good progress on financing discussions and
shortlisting EPC companies for the Project. We estimate that, with
the application of EQTEC's advanced gasification technology, the
Project would convert 200,000 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 our shareholders."
Key terms of the Call Option and Exclusivity Agreement
-- Scott Bros grants to the Buyer an exclusive call option (the
"Option") to require Scott Bros to enter into a binding conditional
Land Purchase Agreement (the "LPA") to sell the Project Site to the
Buyer.
-- The Option may be exercised any time up to 28 February 2021
("Option Lapse Date"), and the Buyer and Scott Bros have agreed to
use all reasonable endeavours in good faith to agree the LPA by
such date and to enter into the same on or before such date. If an
option notice is not served before the Option Lapse Date, or it is
served but the terms of the LPA are not (in the event) agreed by
the Option Lapse Date, then the Option shall lapse and will be of
no further effect.
-- The consideration for the grant of the Option is GBP260,000,
which is payable GBP100,000 on exchange of the Option and
GBP160,000 if completion under the Option (and the LPA is agreed
and entered into) no later than 28 February 2021.
-- The Option Agreement contains the key commercial terms of the
LPA together with an all reasonable endeavours good faith
obligation to agree an LPA on such terms, but such terms will only
become legally binding on the execution of the LPA.
-- The Option Agreement provides that the purchase price for the
Project Site will be GBP8,600,000, less the consideration of
GBP260,000 for the grant of the Option.
-- The proposed terms of the LPA provide that completion
thereunder will be subject to the satisfaction of certain
conditions precedent relating to the development and financing of
the Project, including that the Buyer has reached financial close
in respect of such financing, the Buyer having agreed the form of
the key construction, operational, offtake and feedstock contracts,
and the Project being fully permitted by the relevant planning and
environmental authorities.
-- The Option Agreement provides that the Seller shall not (and
will procure than no member of its group shall), other than with
the Buyer, enter into, re-start or solicit, or initiaite, acquiesce
or participate in, any negotiations with third parties as to any
investment in the Project Site, any disposal of all or any part of
the Project Site, or any development of the Project, during the
period ending on the Option Lapse Date.
About the Project
EQTEC has been developing the Project with the support of local
business, Scott Bros. The proposed plant at Billingham, with the
additional planning under application, is expected to create
directly dozens of local jobs and deliver significant economic and
environmental benefits to both the local community and to local
industrial energy users.
Subject, inter alia, to additional planning and the requisite
financing, EQTEC estimates that, with the application of its
advanced gasification technology, the Project will annually process
200,000 metric tonnes of non-recyclable everyday Municipal Solid
Waste ("MSW"), sorted and subject to basic processing treatment to
be converted into Refused Derived Fuel ("RDF"), otherwise destined
for landfill or incineration, into 25MWe of green electricity,
enough to power 50,000 homes, and 34MW of thermal heat production,
all with no harmful or toxic emissions .
EQTEC has already secured grid connection; completed technical
due diligence with technology insurance providers; and ongoing
discussions with potential funders and co-developers are
progressing well. The project has existing planning permission for
advanced thermal conversion ("ATC") and EQTEC is applying for a
modification on the current planning to both improve the economics
of the project and reduce the size of the footprint of the
plant.
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.
EQTEC's advanced gasification technology is proven and patented
for waste to energy projects and the Company is increasingly
confident that it has the potential to become a new UK and global
standard for many traditional waste-to-energy facilities to
collaborate with, reducing reliance on increasingly less attractive
waste elimination methods such as traditional incineration and
delivering new resilient and locally based green energy
infrastructure across the UK and internationally.
To date, four commercial plants have been built and are using
EQTEC's technology. The oldest one, built in 2011, has operated for
over 125,000 independently audited engine hours, receiving highly
commendable feedback from leading gas engine company Jenbacher
relating to purity of the syngas, reliability and efficiency.
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
------------------------------
James Harris / James Dance / Jack Botros
------------------------------
Arden Partners - Broker +44 20 7614 5900
------------------------------
Paul Shackleton (Corporate) / Simon Johnson
(Sales)
------------------------------
Maitland/AMO - Communications & PR/IR adviser +44 20 7379 5151
------------------------------
James Benjamin/Rhys Jones EQTEC-maitland@maitland.co.uk
------------------------------
About EQTEC plc
EQTEC is a world leading gasification technology partner with
proven proprietary and patented technology for sustainable
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.
The Company's proprietary technology design together with its
deployment and maintenance capabilities mitigate the risks when
using third party equipment. EQTEC's Technology Integration
capabilities enable the Group 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
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