EQTEC plc (AIM: EQT), a world-leading gasification solutions company building the future of a cleaner waste-to-energy industry, is pleased to announce that the Company’s wholly-owned subsidiary, Southport WTV Limited (the “Buyer”).
Has signed a Share Purchase Agreement (the “SPA”) with Rotunda Group Ltd (“Rotunda”) and its subsidiary Shankley Biogas Ltd, to acquire full ownership of the Southport Hybrid Energy Park project (the “Project”) from Rotunda through the acquisition of Shankley Biogas Ltd (the “Project SPV”).
Highlights
Initial consideration of £382,000 from which the existing exclusivity payment of £100,000 will be deducted, is payable on the achievement of certain conditions precedent related to development milestones of the Project on or before a date 12 months from the date of signing of the SPA;
One of the conditions precedent is that the Company is granted a lease in relation to the Project sufficient for the development and operation of the Project and on terms generally acceptable to the Buyer and any funder (in their entire discretion); and
The issue of a fixed dividend share in the Buyer to Rotunda, which gives Rotunda the right to 20% of distributable profits in Southport WTV Limited. This share carries no voting rights or entitlement to dividends in EQTEC.
David Palumbo, CEO of EQTEC, commented:
“I’m delighted that EQTEC is taking another RDF-to-energy project in the UK to the next stage of development. In signing this agreement to acquire the Project SPV for Southport, we are closer to bringing an innovative and sustainable type of waste-to-energy facility to the local community, where we will source excess municipal, commercial and industrial waste from the surrounding area and convert it with our Advanced Gasification Technology into green electricity. The transaction also supports our strategy to incubate innovative energy transition projects applying EQTEC technology, to then sell forward and bill for our development services, technology solutions and maintenance.”
About the Southport RDF-to-energy Project
The RDF-to-energy project comprises land at Watts Industrial Estate, Crowland Street, Southport, Merseyside , where the site has pre-existing Phase 1 permission to transform 80,000 tonnes of waste in a waste management and anaerobic digestion facility, and 9MWe with 2MW o f battery storage , exporting 11MWe to the grid annually . The intended Phase 2 includes the addition of an advanced gasification facility. The Company will provide updates as to revised Phase 1 and the intended Phase 2 planning submission in due course . The proposed plant, if approved, could convert over 55,000 tonnes of RDF annual for an estimated additional 6MWe to 8MWe of green electricity. A pre-planning consultation has been carried out with the local authority whereby Phase 1 and Phase 2 master plans were welcomed by the local authority and given their support.
EQTEC expects to act as the project developer on the Project, providing the design and core Advanced Gasification Technology and retain a portion of the O&M contract after commissioning. As the Project matures toward Financial Close, the Company intends to sell a majority equity position on the Project SPV and invoice the Project SPV for development services fees provided.
Related Party Transaction
During the twelve-month period ending 30 June 2021, Mr Ian Pearson, the Company’s Non-Executive Chairman, provided additional Consultancy Services to the Group on ESG, Sustainability Reporting and public policy/government engagement, in the amount of €116,261 (the “Consultancy Services”).
Ian Pearson is a Director of the Company and, as such, is a related party as defined in the AIM Rules. As a result, the payment to him for the Consultancy Services is a related party transaction pursuant to Rule 13 of the AIM Rules. Accordingly, the independent directors of the Company (being those directors other than Ian Pearson), having consulted with the Company’s Nominated Adviser, Strand Hanson Limited, consider the terms of the payment for Consultancy Services to be fair and reasonable insofar as the Company’s shareholders are concerned.
