TIDMSAE
RNS Number : 7408D
SIMEC Atlantis Energy Limited
28 June 2019
The information contained in this announcement is inside
information under the Market Abuse Regulation (EU) No 596 / 2014.
The person responsible for arranging the release of this
announcement on behalf of SIMEC Atlantis Energy Limited is Tim
Cornelius, Chief Executive Officer of SIMEC Atlantis Energy
Limited.
28 June 2019
SIMEC ATLANTIS ENERGY LIMITED
("Atlantis" or the "Company" ")
Update on the proposed acquisition of Green Highland
Renewables
Atlantis provides the following update to the announcement made
on 18 June 2019 regarding its conditional sale and purchase
agreement ("SPA") to acquire Green Highland Renewables ("GHR") from
the SIMEC group.
As announced on 18 June, the Company is considering an
alternative transaction structure in relation to GHR. Atlantis now
has agreed to release the SIMEC group from its obligations under
the SPA in consideration for receipt of a payment in cash of
approximately GBP5 million, pursuant to a payment agreement, (the
"Payment Agreement") which will be deployed towards the delivery of
its flagship 220MW Uskmouth waste-to-energy conversion project.
Furthermore, SIMEC has agreed pursuant to a loan agreement made
between Atlantis and SIMEC, subject to the satisfaction of certain
conditions precedent, to make a GBP2 million interest free loan
available to Atlantis (the "Loan Agreement"). Further information
on these agreements is provided below.
Highlights
-- SIMEC has agreed to pay Atlantis the sum of GBP5.03 million
in cash in order to be released from its obligations under the
SPA
-- SIMEC has also agreed to make a GBP2 million interest free
committed debt facility available to Atlantis
-- These additional financial resources will be deployed towards
the delivery of its flagship 220MW Uskmouth waste-to-energy
conversion project.
Payment and Loan Agreements
In light of the 62,878,710 new Ordinary Shares in Atlantis
issued to SIMEC in March 2019 pursuant to the sale and purchase
agreement ("SPA"), Atlantis has agreed pursuant to the Payment
Agreement entered into on 27 June 2019 to release the SIMEC group
from its obligations under the SPA in consideration for the payment
in cash of approximately GBP5 million. This sum is payable by SIMEC
in instalments, as and when required by Atlantis, but with the full
GBP5.03 million payment due by no later than 31 December 2020.
Furthermore, SIMEC has agreed pursuant to the Loan Agreement
dated 27 June 2019 made between Atlantis and SIMEC subject to the
satisfaction of certain conditions precedent to make a GBP2 million
interest free loan available to Atlantis. The loan term ends on 31
May 2022 at which point SIMEC can elect to be repaid in cash or
Atlantis Ordinary Shares at a price of 19p per Ordinary Share.
SIMEC's right to be repaid in Atlantis Ordinary Shares by
conversion of the loan shall be subject to the consent of the Board
of Atlantis (not to be unreasonably withheld or delayed) if such
conversion would cause SIMEC's shareholding in Atlantis to exceed
49.99 per cent. of its issued share capital. The loan is subject to
the satisfaction of certain conditions precedent including Atlantis
having made progress on the Uskmouth conversion project and other
customary conditions and draw stops for a loan of this nature.
The Payment Agreement and the Loan Agreement are both classified
as related party transactions under the AIM Rules for Companies
since they involve transactions with a related party of the
Company, SIMEC, which is a substantial shareholder of the Company
(being the Company's largest shareholder which, as at the date of
this announcement, owns approximately 49.99 per cent. of the
Company's issued share capital. The independent directors of
Atlantis (comprising John Neill, Tim Cornelius, Andrew Dagley, John
Woodley and Ian Wakelin), having consulted the Company's nominated
adviser, Cantor Fitzgerald Europe, consider that the terms of each
of the Payment Agreement and the Loan Agreement are fair and
reasonable insofar as shareholders are concerned.
The collaboration between Atlantis and its strategic partner,
SIMEC, is governed by the terms of the relationship agreement
entered into between SIMEC and Atlantis in 2018.
Tim Cornelius, CEO of Atlantis, commented:
"Although not the original intention, this is an excellent
outcome for Atlantis. We will end up with more near-term cash to
deploy on key development projects which are intended to deliver
the largest possible returns for investors.
The cash injections SIMEC is making validates its commitment to
building a world leading project development company with the
Atlantis management team and we are very appreciative of its
continued financial, commercial and supply chain support. We are
now in an even stronger financial position and look forward to
building a portfolio of scale, starting with the flagship Uskmouth
conversion project, one of the largest waste-to-energy projects in
Europe."
Jay Hambro, CEO of SIMEC Energy and Non-Executive Director of
SIMEC Atlantis, commented:
"SIMEC firmly supports SIMEC Atlantis and believes these
arrangements are a win-win for all parties involved. We are
delighted to provide further funding to progress the
ground-breaking Uskmouth conversion project which should create
material value for all shareholders. We firmly believe that this
project will become a blueprint for the responsible conversion of
coal fired power stations around the world."
Enquiries:
SIMEC Atlantis Energy Limited via FTI Consulting
Tim Cornelius, Chief Executive Officer
Andrew Dagley, Chief Financial Officer
Cantor Fitzgerald Europe (Nominated
Adviser and Joint Broker) +44 (0)20 7894 7000
Rick Thompson
Richard Salmond
David Porter
J.P. Morgan Cazenove (Joint Broker)
James Deal
Michael Wentworth Stanley +44 (0) 20 7742 4000
FTI Consulting +44 (0)20 3727 1000
Ben Brewerton
Alex Beagley
Notes to Editors
SIMEC Atlantis Energy
SIMEC Atlantis Energy is the global developer, owner and
operator of sustainable energy projects with a diverse portfolio of
more than 1,000 megawatts in various stages of development. This
includes a 77% stake in the world's largest tidal stream power
project, MeyGen, and the conversion of the 220MW Uskmouth Power
Station.
In 2017, we entered into a strategic partnership with SIMEC, a
member of the GFG Alliance, to convert the Uskmouth Power Plant to
use an end-of-waste energy pellet as fuel. The plant is expected to
enter commercial operations in 2020 and will sell its power to GFG
Alliance companies under two 20-year power purchase agreements. A
successful conversion will tackle the pressing issue of
non-recyclable waste in the UK and will form the blue-print for
other large-scale conversion projects across the globe.
We intend this to be the first of a number of acquisitions
aiming to transform SIMEC Atlantis into a diversified energy
company of scale, owning development and generating assets across
the sustainable energy spectrum in Europe, Asia and Australia,
complementing our existing UK pipeline.
www.simecatlantis.com
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END
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