Ncondezi Energy Limited US$1.3 million Sale of C&I Subsidiary (4410U)
December 03 2021 - 1:59AM
UK Regulatory
TIDMNCCL
RNS Number : 4410U
Ncondezi Energy Limited
03 December 2021
News Release
US$1.3 million Sale of C&I Subsidiary
3 December 2021: Ncondezi Energy Limited ("Ncondezi" or the
"Company") (AIM:NCCL) announces that Ncondezi Green Power Holding
Limited ("NGP"), the Company's wholly owned renewable energy
subsidiary, has entered into a sale and purchase agreement ("SPA")
with Green Energy SPV PLC ("Green Energy") and sold Mozambique
Green Power ("MGP"), the group company which owns the group's
maiden Commercial and Industrial ("C&I") 400kWP solar and 912
kWh battery storage project in Mozambique.
Key highlights
-- Acquisition price US$1.3 million paid in cash (the
"Consideration") on completion which has occurred
-- Green Energy is a newly formed company controlled by Ncondezi
Energy Non-Executive Director, Scott Fletcher
-- Proceeds to be used to repay the Bridge Loan which, as
announced on 15 October becomes due on 7 December and the remainder
of the proposed Consideration, estimated at $650,000 to be used for
general working capital purposes
SPA
Under the sale and purchase agreement, NGP has sold to Green
Energy the entire issued share capital of MGP for a total
consideration of US$1.3 million in cash. Under the terms of the SPA
it has been agreed that:
(i) NGP has terminated certain exclusivity agreements with NESA
Capital (PTY) Ltd, and Nesa Venture Capital Investments (PTY )
Limited; and
(ii) Ncondezi has waived certain contractual rights in relation
to Hanno Pengilly and Scott Fletcher under their letter of
appointment and service agreement with Ncondezi, respectively such
that they will both be permitted to participate in any commercial
and industrial solar photovoltaic and battery storage projects
carried out by Green Energy following completion of the
transaction.
The Company has also guaranteed performance by NGP of its
obligations under the agreement. NGP has given customary warranties
in relation to its authority to enter into the transaction, its
ownership of the shares and the business of MGP. NGP has also given
an indemnity regarding the financial position of MGP and certain
other matters. The warranties relating to the business of MGP and
the indemnities are subject to a number of limitations.
Related Party Transactions
Both the sale of MGP to Green Energy and the requirement to
repay the Bridge Loan from the proceeds of the sale constitute
related party transactions for the purposes of AIM Rule 13.
Accordingly, the Company's Non-Executive Director Aman Sachdeva
(being the only director considered to be independent for the
purposes of the related party transactions) considers, having
consulted with Liberum Capital Limited, the Company's Nominated
Adviser, both the terms of the SPA for the sale of MGP to Green
Energy and the repayment of the Bridge Loan from the proceeds of
the sale to be fair and reasonable insofar as the Company's
shareholders are concerned.
Ncondezi Non-Executive Director Aman Sachdeva said: "Following
the strategic review we launched in June and in an increasingly
challenging post COP26 environment, selling the C&I subsidiary
allows the Company to fully focus on progressing the Company's main
project, the Ncondezi Project with our Strategic Partner, China
Machinery Engineering Corp and we are working on finalising the
tariff as soon as possible.
Following completion of the strategic review process, Green
Energy's offer provides a premium valuation with an easy to execute
structure. It also provides a non dilutive solution which ensures
the Bridge Loan will be repaid on time and provides additional
working capital to the Company as it focuses on the Ncondezi
Project.
Commissioning of the maiden C&I project demonstrated the
Company's ability to deliver a power project in Mozambique,
utilising new technologies, in the midst of a global pandemic. It
strengthened both our knowledge base and skill sets in ways which
we are confident will benefit the Ncondezi Project going forwards.
In the meantime progress continues to be made on the Ncondezi
Project with all key parties."
Enquiries
For further information please visit www.ncondezienergy.com or
contact:
Ncondezi Energy Hanno Pengilly +27 (0) 71 362 3566
Liberum Capital Limited Scott Mathieson, Edward Thomas, +44 (0) 20 3100
NOMAD & Joint Broker Kane Collings 2000
Novum Securities
Limited +44 (0) 20 7399
Joint Broker Colin Rowbury 9427
Pimlico Advisory
Ltd +44 (0) 777 56 55
Investor Relations Elizabeth Johnson 927
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014 which is part of UK law
by virtue of the European Union (Withdrawal) Act 2018. Upon
publication of this Announcement and such information is now
considered to be in the public domain. The person who arranged for
the release of this announcement on behalf of the Company was Aman
Sachdeva.
About Ncondezi Energy
Ncondezi is an African power development company with an
advanced staged, integrated 300MW thermal coal power plant and mine
project located in the Tete Province, Northern Mozambique.
The Company is focused on providing reliable, affordable and
accessible baseload energy to Mozambique and secure against the
effects of water drought and intermittency of new renewables. This
project supports Mozambique's energy strategy of universal
electricity access by 2030. According to the World Bank, only 30%
of the Mozambican population had access to energy in 2017. The
Ncondezi Project would provide 300MW of reliable and available
power helping to close the infrastructure gap of the region and
serving as a catalyst for economic development.
The power plant will be designed to be equipped with
state-of-the-art emissions controls technologies that will reduce
local air pollutants, minimizing the plant's impact on the
environment and ensuring its compliance with the most stringent
emission standards
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