React Energy PLC Issue of loan notes (9694H)
March 20 2015 - 3:00AM
UK Regulatory
TIDMREAC
RNS Number : 9694H
React Energy PLC
20 March 2015
20 March 2015
REACT Energy plc
("REACT" or the "Company")
Issue of unsecured loan notes in Newry Biomass Limited
REACT Energy plc (AIM: REAC), the energy infrastructure
developer and operator which focuses on the production of clean
energy in the UK and Ireland today announces that Newry Biomass
Limited ("NBL") the joint venture company equally owned by REACT
and its major shareholder Farmer Business Developments plc
("Farmers") has approved the issue of GBP5,702,523 of loan notes
("LNs") to Farmers. The proceeds from the issue of the LNs will be
used to repay in full borrowings owed by NBL to Ulster Bank Limited
amounting to GBP5,425,000.
The issued LNs are interest free and are redeemable on 1
November 2026. As part of the joint venture agreement between REACT
and Farmers, while both parties have a 50 per cent equity interest
in NBL, the right to share in profits generated by NBL are
calculated by reference to how much capital each partner
contributes to the project. Following the issue of the LNs, Farmers
are now entitled to 51 per cent. (increased from 8 per cent.) of
the economic benefits deriving from the project and REACT is now
entitled to 49 per cent. (reduced from 92 per cent.) of the
economic benefits. NBL owns the 4MW Biomass advanced gasification
project located in Newry, Co. Down, Northern Ireland. The project
is currently on 'care and maintenance' pending additional funding
required to engage a new technology provider. The Directors believe
that the repayment of the Ulster Bank borrowings (which included a
first charge on NBL's assets) will significantly improve the
ability of REACT and Farmers to source the 3(rd) party funding
required to re-power the Newry Biomass project.
Farmers is a substantial shareholder in REACT (as defined in the
AIM Rules) and as such the issue of the LNs is a related party
transaction for the purposes of Rule 13 of the AIM Rules. The
Independent Directors (being the directors other than Dermot
O'Connell), having consulted with Shore Capital and Corporate
Limited (the Company's nominated adviser), consider that the terms
of the LNs are fair and reasonable insofar as shareholders of REACT
are concerned.
Funding discussions
Further to the announcements on 1 December 2014 and 13 January
2015, REACT continues discussions with potential providers of
finance to enable the lifting of the suspension of trading in the
Company's shares.
- Ends -
For further information:
+353 (0)21
REACT Energy plc 2409 056
Gerry Madden/Brendan Halpin
+44 (0)20
Shore Capital - Nomad & Broker 7408 4090
Pascal Keane / Anita Ghanekar
Yellow Jersey PR Limited - Public +44 (0)7747
Relations 788 221
Dominic Barretto / Anna Legge
About REACT
REACT Energy plc is committed to operating clean electricity and
heat generation plants in the UK and Ireland.
The Company identifies, builds owns and operates plants and
possesses significant knowledge of energy markets, clean
technologies, fuel sources, project development, project finance
and project delivery.
REACT currently has four operational clean energy plants
generating revenue from the sale of electricity and heat.
The generation of clean electricity and heat from sustainable
sources has the potential to address the key energy challenges of
energy security and carbon commitment and provide strong returns on
capital employed.
The company is listed on AIM and trades as
REAC.www.reactenergyplc.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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