TIDMMAST
RNS Number : 8049Z
Mast Energy Developments PLC
18 May 2023
Mast Energy Developments PLC
(Incorporated in England and Wales)
(Registration Number: 12886458)
Share code on the LSE: MAST
ISIN: GB00BMBSCV12
('MED' or 'the Company')
Dated: 18 May 2023
Mast Energy Developments PLC ('MED' or 'the Company')
MED Announces Joint Venture and associated Significant
Investment, Appointment of New Corporate Broker, and Reprofiling of
its Loan Facilities
Mast Energy Developments PLC, the UK-based multi-asset owner,
developer, and operator in the rapidly growing flexible power
market, is pleased to announce that it has recently concluded a
Heads of Terms ('HoT') with regard to a new Joint Venture ('JV')
agreement between MED and a new institutional investor-led
consortium (the 'Institutional Investor'). Under the HoT, it is
envisaged that the Institutional Investor will inject all required
investment capital into the JV with an expected total investment
value of c. GBP33.6m, with no funding contribution required from
MED. MED will be providing the required projects to the JV, for a
total portfolio of gas peaker plants with a combined generation
output of c. 50 MW to be developed and/or acquired, constructed and
in production and income generating within the next 12 months. An
overview of the key highlights and terms of the JV are provided
below.
Further, MED announces the appointment of Novum Securities
Limited ("Novum") as corporate broker to the Company. Novum will be
taking over from Clear Capital Markets Limited as sole broker with
immediate effect.
Finally, MED announces that is has agreed to a reprofiling of
the outstanding balances on its existing loan facilities (herein
referred to as the 'Acquisition Loan' and the 'Development Loan',
and together as the 'Loans') held through an institutional lender
group (the 'Institutional Lender'). The Loans' details were
previously announced by the Company in RNSs dated 5 October 2022
and 3 November 2022, respectively. The current aggregate balance
outstanding on the Loans is GBP729,750 (the 'Reprofiled Balance'),
which was transferred to the new loan agreement (the 'Reprofiling
Agreement') signed bet ween the Company and the Institutional
Lender on 17 May 2023 (the 'Execution Date'). Under the terms of
the Reprofiling Agreement, the Reprofiled Amount is deemed an
initial advance on the Execution Date.
JV Key Highlights
The key terms of the JV agreement comprise the following:
-- Institutional Investor will inject all required investment
capital into the JV with an expected total investment value of c.
GBP33.6m, with no funding contribution required from MED.
-- Institutional Investor to hold 74.9% of the JV and MED to
hold 25.1%, subject to the Institutional Investor recognising and
reimbursing to MED its actual historic project acquisition and
development related costs, totaling an expected c. GBP7.7m, as
detailed below, and no requirement on MED to provide any further
funding.
-- MED will have joint control of the JV SPV Board and full
operational control of the projects' management and operations.
-- Upon execution of the JVA, at Investment Tranche 1,
consisting of three projects with a combined generation capacity of
a minimum 26.5 MW that MED will provide to the JV, the
Institutional Investor will then pay MED c. GBP3.7m as part
repayment of the historic project acquisition and development
related costs and inject c. GBP11m into the JV SPV to cover future
capex on these projects.
-- Upon satisfactory completion of Investment Tranche 1, at
Investment Tranche 2, consisting of three projects with a combined
generation capacity of a minimum 14 MW and up to 30 MW that MED
will provide to the JV, the Institutional Investor will then pay
MED c. GBP4m as part repayment of the historic project acquisition
and development related costs and inject c. GBP15m into the JV SPV
to cover future capex on these three projects.
-- The Institutional Investor will receive a preferential
entitlement to 90% of the profit of the JV until the investment
provided under part (i) of the Investment Tranche's 1 & 2 has
been recovered in full, at which point any distribution of profits
will return to the equity split.
-- Therefore, MED will , assuming it can provide the projects as
required, receive a c. 25% free stake in a portfolio of around c.
50 MW of assets that will be fully funded, constructed and revenue
generating within the next 12 months.
-- It is expected that upon completion of both Investment
Tranches 1 and 2, the total expected average annual revenue to be
generated by the associated assets in the JV portfolio will
comprise c. GBP15m per annum.
-- In addition, the JV will grant MED a five-year management
services agreement ('MSA') and associated fee to manage the sites,
which will further bolster MED's share of income from the JV.
-- It is MED's intention and plan to use the proceeds from the
JV investment tranches to further bolster its own wholly owned
portfolio of assets (outside of the JV), by way of further
development, construction and new acquisitions.
-- The HoT is subject to a typical confirmatory due diligence to
the satisfaction of both parties, concluding the associated
definitive JV agreement and any regulatory and Board approvals.
-- All JV deal numbers quoted herein are indicative and subject
to the concluding of a definitive JV agreement.
-- It is expected that the JV agreement will be completed and
executed around mid-June 2023 but there is no guarantee that a
definitive agreement will be reached.
Second Drawdown on Development Loan
The Reprofiled Amount includes the aggregate outstanding
principal and accrued interest amounts of GBP729,750 on the Loans,
and the proceeds of a Second Advance under the terms of the
Development Loan of GBP100,000 availed by the Company in
conjunction with the signing of the Reprofiling Agreement on the
Execution Date. The proceeds accruing from the Second Advance will
be used by the Company for ongoing project development costs.
Details of the Reprofiling Agreement
The terms of repayment for the Reprofiled Balance (the 'Deemed
Advance') and any additional subsequence drawdowns ('Further
Advances') under the Reprofiling Agreement, comprise the
following:
-- The Reprofiled Balance will be subject to a six-month
principal repayment holiday, followed by 18 equal monthly cash
repayments of principal and the coupon thereafter on the maturity
date, which falls 24 months from the Execution Date. It is noted
that the first drawdown (or Deemed Advance) is the Reprofiled
Balance, and the first drawdown date is the Execution Date. Further
Advances will be the subject of mutual agreement between the
Institutional Lender and the Company for the duration of the
Commitment Period (defined as three (3) years from the Execution
Date).
-- The Institutional Lender may elect to avail of the following
MED share conversions (a 'Conversion') during the duration of the
Commitment Period:
o During the first 12-month period following the Execution Date,
it can convert 50% of the Reprofiled Balance plus applicable
interest to MED ordinary shares at the lower of (a) a deemed price
of GBP0.02 per MED share or (b) at the last Company share placing
price for any third-party equity fundraising carried out prior to a
Conversion during this period (the 'Fixed Price');
o After the initial 12 months, during the Term, the
Institutional Lender may elect to convert any outstanding amount on
the Reprofiling Agreement at the Fixed Price; or
o If the Company elects not to settle a monthly payment (each
being a 'Unsettled Payment'), they will automatically grant a right
for the monthly payment to be settled in shares, being that the
lender will be granted subscription rights over such balances for a
period ending on the later of (a) the remaining 24 months from the
relevant drawdown date and (b) 12 months from the unsettled payment
date, to convert the relevant Unsettled Payments to MED shares at
90 per cent of the one daily volume-weighted average price ('VWAP')
of MED shares chosen by the Institutional Lender in respect of MED
shares traded on the LSE during the 10 trading days immediately
preceding the date of a share conversion notice with respect to the
Unsettled Repayment. At the expiry of the Convertible Period, the
portion of the Elected Unsettled Payment not redeemed will be paid
to the Institutional Lender.
-- The Company will grant senior fixed and floating security
over its assets by way of debenture, save to the extent that any
relevant MED Project SPV subsidiary companies that will be party to
the above referred JV agreement being currently considered by the
Company will be excluded, provided the monies due to the
Institutional Lender from the Company is reduced to the aggregate
of GBP300,000, which the Company is permitted to do pursuant to the
terms of the agreement or otherwise waived by the Institutional
Lender.
-- The Reprofiled Balance will be subject to a 9.5% fixed coupon
over the 24-month term, such calculation being made for each annual
period at the commencement of the relevant 12-month period.
Warrant Issue
The Institutional Lender has also been issued warrants under the
terms of the Development Loan and the Reprofiling Agreement as
follows:
Development Loan: 4,511,312 warrants calculated as 40% of the
Second Advance divided by the Reference Price of GBP0.0088666
(being the average of the five (5) daily VWAPs preceding the
Execution Date. The warrants are exercisable at 130% of the
Reference Price, save that, in the event that the Issuer completes
any share placing during the term of the Second Advance and the
share placing price is below 130% of the Reference Price, the
exercise price will be the share placing price. The exercise period
is 36 months from the date of the grant.
Reprofiling Agreement: 82,303,250 warrants calculated as 100% of
the Reprofiled Balance of the GBP 729,750 divided by the Reference
Price of GBP0.0088666 (being the average of the five (5) daily
VWAPs prior to the Execution Date) and issued on or before the 30
July 2023. Half of the warrants will be exercisable at the relevant
Reference Price and the other half will be exercisable at 200% of
the relevant Reference Price. The exercise period will be 48 months
from the date of issue.
The details of warrants to be issued for Further Advances will
be agreed between the Institutional Lender and the Company at the
time.
The exercise of the warrants may be offset against outstanding
balances pursuant to the Reprofiling Agreement.
Pieter Krügel, CEO of MED, commented: "We are very pleased to
have signed a HoT with regards to the JV deal and excited to
conclude the JV agreement in due course. The JV, outside of MED's
own wholly owned portfolio of assets which we will continue to grow
in parallel, will not only provide MED with a significant cash
injection but also a significant stake in a portfolio of assets
totaling an expected 50 MW that will be fully funded, constructed,
in production and income generating in the next 12 months. MED's
share of income from the JV portfolio revenue, and in addition its
5-year MSA fee, will provide MED with a significant long-term
recurring income stream. The JV deal has been long in the making
and follows a robust initial due diligence and negotiation process.
The willingness of the Institutional Investor-led consortium to
enter into the HoT with MED is testament of their confidence in the
Company's strategy and long-term development plans to deliver
flexible energy projects that are commercially viable.
Further, we are pleased with the appointment of Novum as sole
broker and to have Novum as a strategic partner to the
MED-team.
Finally, we are pleased to have reached agreement with the
Institutional Lender to implement the reprofiling of the existing
loans and to secure a further funding advance. The reprofiling of
the loans will simplify MED's repayment obligations and provide a
meaningful runway to ensure the Company's financial and operational
stability and to support its development plans."
ENDS
This announcement contains inside information for the purposes
of the UK version of the Market Abuse Regulation (EU No. 596/2014)
as it forms part of United Kingdom domestic law by virtue of the
European Union (Withdrawal) Act 2018 ('UK MAR'). Upon the
publication of this announcement, this inside information is now
considered to be in the public domain.
For further information please visit www.med.energy or
contact:
Pieter Krügel Info@med.energy Mast Energy CEO
Developments
PLC
Jon Belliss +44 (0)20 7399 9425 Novum Securities Corporate Broker
------------------------------ -------------------- -----------------
Zainab Slemang zainab@lifacommunications.com Lifa Communications Investor &
van Rijmenant Media Relations
Advisor
------------------------------ -------------------- -----------------
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
MSCDBGDUUSBDGXR
(END) Dow Jones Newswires
May 18, 2023 02:00 ET (06:00 GMT)
Mast Energy Developments (LSE:MAST)
Historical Stock Chart
From Apr 2024 to May 2024
Mast Energy Developments (LSE:MAST)
Historical Stock Chart
From May 2023 to May 2024