EQTEC plc (AIM: EQT), a global technology innovator powering distributed, decarbonised, new energy infrastructure through its waste-to-value solutions for hydrogen, biofuels, and energy generation, provides the following update regarding the sale of Deeside WTV Limited (“Deeside WTV”) and consequent Company trading update for 2022.
Deeside WTV sale update
Following the Company’s announcement on 26 September 2022 that it, with Deeside WTV and Logik Developments Limited (“Logik”), had signed non-binding Heads of Terms (“HoTs”) for the acquisition by a publicly quoted, corporate investor (the “Investor”) of the project at Deeside, Flintshire, UK that comprises a waste reception plant, anaerobic digestion facility and EQTEC clean syngas technology facility (the “Project”), the Company confirms that it and its partners have been unable to reach mutually acceptable commercial terms with the Investor toward formalising the Project’s sale and that further discussions with the Investor will not be pursued.
Since the announcement of the HoTs, the Company has received and is responding to additional interest in the Project from a number of potential funders committed to decarbonised, new infrastructure for waste management and energy generation . Any agreement would be in line with the Company’s stated business strategy of focusing its efforts on high-margin technology and innovation services, engaging partners and customers to develop and fund the capital projects that will deploy EQTEC’s technologies.
To facilitate the transaction with the Investor, and as announced on 26 September 2022, Deeside WTV and Logik had previously agreed to further extend the longstop date specified in the share purchase agreement signed on 07 December 2020 (as amended on 6 December 2021, 1 April 2022 and 30 June 2022) (the “SPA”), to 28 February 2023 (the “Long Stop Date”). The Company and its partners have agreed that the Long Stop Date is to remain unchanged.
Trading update for the current financial year
As a direct result of the Company’s and its partners’ having been unable to formalise a contract with the Investor for the sale of the Project, the Company will be unable to recognise within FY 2022 revenues totalling £4.5 million (€5.2 million) related to the Deeside SPV sale.
In light of this, the Company has updated its overall FY 2022 revenue forecast, as presented in its Interim Results on 29 September 2022, to €5 – 7 million. T he Company forecasts an updated FY 2022 EBITDA loss in the range of €4 – 5 million. In its Interim Results, the Company noted that both revenue and EBITDA guidance were predicated on the progression of projects with funding, and in particular on progress with the Deeside project.
David Palumbo, CEO of EQTEC, commented:
“On the one hand, it is disappointing to see this negotiation for purchase of the Deeside project fall through, with the consequential impact on our 2022 forecast. On the other hand, we view this setback as temporary and not a major block to progress with the Project. We have already turned to other potential investors and committed ourselves to securing an alternative financing solution quickly. In terms of funder interest, the Company is in a very different position now than a year ago. We have a number of prospective funders interested in the Deeside project, and we increasingly find ourselves speaking with bigger and better organised companies with clearer reasons for working closely with new infrastructure technology providers such as EQTEC. We remain committed to announcing the funding of Deeside in early 2023 and to moving at pace from there toward financial close and construction start.”
This announcement contains inside information as defined in Article 7 of the EU Market Abuse Regulation No 596/2014, as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018, as amended, and has been announced in accordance with the Company’s obligations under Article 17 of that Regulation.
+44 203 883 7009
David Palumbo / Nauman Babar
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