React Energy PLC Heads of Agreement (1706M)
October 11 2016 - 2:00AM
UK Regulatory
TIDMREAC
RNS Number : 1706M
React Energy PLC
11 October 2016
11 October 2016
REACT Energy plc
("REACT" or the "Company")
Heads of Agreement
Potential Financing of Newry Biomass Repowering
REACT, the renewable energy developer and operator focused on
the production of clean energy in the UK and Ireland, today
announces that it has signed conditional Heads of Agreement with
several parties to potentially fund, through a combination of
equity and debt, the repowering of its 4MW biomass gasification
project located in Newry, Co. Down, Northern Ireland ("Newry
Biomass").
Newry Biomass is owned by Newry Biomass Limited ("NBL") and is a
joint venture with Farmer Business Development plc ("Farmers"), the
Company's 23.2% shareholder. NBL is a 50.01% subsidiary company of
REACT.
The Heads of Agreement envisage a total investment of up to
GBP11.2 million to be made both directly, and indirectly through
REACT, into NBL, through a combination of debt and equity. If an
agreement is concluded, the equity component of the investment is
to be provided by a sub fund of The Ethika Fund SICAV Plc, a
Professional Investor Fund ("Ethika"), and Kyotherm SAS a
France-based equity investor in biomass, geothermal energy and
energy savings projects. Under the terms of the Heads of Agreement,
Ethika is also to procure the debt finance for the repowering.
The terms of the Heads of Agreement between the parties are
legally binding, however, are subject to the completion of, inter
alia, legal, financial and technical due diligence, which is yet to
commence and is expected to take approximately 60 days, and
therefore may change from that set out in the Heads of Agreement.
There can be no guarantee that definitive agreements will be
concluded on the terms currently envisaged or at all, or on the
timetable envisaged.
There is the possibility that that the equity component of the
investment may require, inter alia, shareholder approval, however
this will not be known until the conclusion of the due diligence
exercise. In the event, shareholder approval is required, the
Company will prepare and send the necessary documentation to
shareholders to convene a general meeting of the Company to approve
the proposals.
Background to Newry Biomass
As previously announced, planning permission for a waste to
energy plant converting 25,000 tonnes per annum of wood was
received by NBL in May 2009. However, due to underperformance of
the original technology, a decision was made to repower the project
with a new technology and with a new technology provider.
On 31 December 2015 the Company announced that it had entered
into an agreement with Spanish MAB-listed EBIOSS Energy AD
("EBIOSS") to purchase its EQTEC Integrated Biomass Gasification
Power Plant, with a power output of 4MW, which, subject to
completion of the above investment, NBL will use in the repowering
of the project. Farmers, EBIOSS and its subsidiary, EQTEC Iberia
SL, are therefore also parties to the Heads of Agreement.
The repowered plant will convert wood into electricity using
EQTEC gasification technology, a form of advanced thermal treatment
of waste where the carbon-based material in the waste is converted
into a gas that is passed through a gas turbine engine to produce
electricity.
A further announcement will be released in due course.
For further information:
REACT Energy plc
Gerry Madden / Brendan
Halpin +353 (0)21 2409 056
Strand Hanson Limited
- Nomad & Broker
James Harris / Richard
Tulloch / Ritchie Balmer +44 (0)20 7409 3494
About REACT:
REACT Energy plc is committed to operating clean electricity and
heat generation plants in the UK and Ireland. The Company seeks to
identify, build, own and operate renewable projects 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 quoted on AIM and trades as REAC. Further
information on the Company can be found at
www.reactenergyplc.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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