REG - Cindrigo Hldgs Ltd - MOU To Acquire Operation of 110MW WTE Plant

Cindrigo HoldingsAnnouncement

26/02/2024 07:00

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RNS Number : 3944E  Cindrigo Holdings Limited  26 February 2024

 

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26 February 2024

Cindrigo Holdings Limited
('Cindrigo' or the 'Company')

MOU To Acquire Operation of 110MW Waste to Energy Plant in Finland

 

Cindrigo (LSE:CINH) is pleased to announce that it has signed a Memorandum of
Understanding (the "MOU") with Amtroy OÜ (the "Seller") for the acquisition
of a 50-year lease on a 110 MW Waste to Energy ("WTE") combined heat and power
("CHP") plant located in Kaipola, Finland (the "Facility"). Through the
acquisition, Cindrigo is meeting its goal to expand in the renewable energy
sector by expanding its operation into the Waste to Energy segment in addition
to its current geothermal business.

 

Terms of the Memorandum of Understanding

 

·  Background: The Facility consists of a 110MW WTE Plant (25 MW electricity
and 85MW Steam) that was built by UPM Kymmene Corporation as an integral part
of its paper mill complex in Kapiola Finland. The current owner of the entire
industrial complex is Kapiola Green Port OY, a Finnish company.

·  Lease Overview: Kaipola Green Port OY has granted Kaipola Energy OÜ
("Kaipola Energy"), which is owned by the Seller, a 50-year lease with an
option for extension covering the land, buildings, and equipment essential for
the full operation of the WTE Facility.

·   Status, performance:

·  The Facility will require some maintenance and repair work at an
estimated cost of up to €3 million, to commence commercial operations.

·   The Facility, at full operational capacity, based on current pricing,
would generate revenues of approximately €37 million annually.

·   Commencement of commercial operations is planned for Q4 2024, with
initial revenues of approximately €15 million per annum.

·   Transaction Overview: Cindrigo has been granted a 30 day exclusivity
period to acquire 100% of the shares in Kaipola Energy

·     Purchase Price: €18.95 million for 100% of Kaipola Energy, made up
of:

·   At closing, €100,000 in cash plus €15 million in Cindrigo shares,
priced at €1.10 per share being 13,636,364 shares; plus

·   A deferred payment of €3.85m million in cash payable upon commencement
of commercial operations; and

·  An additional earn-out payable to the Sellers of up to €3 million
dependent upon EBITDA performance targets being met during the first three
years following the start of commercial operations.

·    Total investment would be approximately €227,000 per MW including
the estimated costs of maintenance and repair work up until the facility is
fully operational.

·     Operational Commitments: Cindrigo and the Seller have operational
commitments including:

·   Cindrigo will fund the cost of maintenance and repair work required to
commence commercial operations.

·  Cindrigo will pay rent on the Facility of €30,000 per month from the
commencement of commercial operations, increasing to a maximum additional rent
of €70,000 per month, depending on output performance.

·     The Seller will provide the Facility with biofuel meeting "green"
requirements, equivalent to 3 MW per kilo.

·   Warranties: The Seller will provide warranties regarding the Facility's
condition, excluding specified renovations, ensuring transparency and
confidence in the transaction.

·   Closing Conditions: The closing of the transaction is subject to the
fulfilment of the terms outlined in the MOU, including satisfactory due
diligence and obtaining necessary approvals.

 

Commenting on the MOU, Lars Guldstrand, CEO of Cindrigo, said: "We are excited
about the opportunities presented by this transaction. The Kaipola facility is
a 110 MW waste to energy combined heat and power plant that will generate
early income and represent a significant asset in our portfolio. This
transaction aligns with Cindrigo's long stated aim to develop a significant
presence in the renewable energy sector through both geothermal and waste to
energy projects and supports green domestic energy resources and production."

 

**ENDS**

 

For more information please contact:

 

 Cindrigo Holdings Limited

 Lars Guldstrand CEO                                               +44 (0) 7408 861 667

 Hannam & Partners (Financial Advisor & Corporate Broker)

 Samuel Merlin, Sean Urquhart                                      +44 (0) 20 7907 8500

 St Brides Partners Ltd (PR)                                       +44 (0) 20 7236 1177

 Paul Dulieu                                                       cindrigo@stbridespartners.co.uk

 

 

Notes:

 

Cindrigo Group is an active clean baseload energy developer engaged in the
renewable energy sector.

 

Cindrigo is in the process of seeking approval by the FCA of a prospectus in
respect of its proposed application for re-admission to the standard segment
of the Official List and to trading on the Main Market of the London Stock
Exchange.

 

 

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