REG - EQTEC PLC - Deeside Project SPV Sale and Trading Updates

EQTECAnnouncement

01/12/2022 07:00

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RNS Number : 1758I  EQTEC PLC  01 December 2022

 

01 December 2022

 

EQTEC plc

("EQTEC", the "Company" or the "Group")

 

Deeside Project SPV Sale and Trading Updates

 

EQTEC plc (AIM: EQT), a global technology innovator powering distributed,
decarbonised, new energy infrastructure through its waste-to-value solutions
for hydrogen, biofuels, and energy generation, provides the following update
regarding the sale of Deeside WTV Limited ("Deeside WTV") and consequent
Company trading update for 2022.

 

Deeside WTV sale update

 

Following the Company's announcement on 26 September 2022 that it, with
Deeside WTV and Logik Developments Limited ("Logik"), had signed non-binding
Heads of Terms ("HoTs") for the acquisition by a publicly quoted, corporate
investor (the "Investor") of the project at Deeside, Flintshire, UK that
comprises a waste reception plant, anaerobic digestion facility and EQTEC
clean syngas technology facility (the "Project"), the Company confirms that it
and its partners have been unable to reach mutually acceptable commercial
terms with the Investor toward formalising the Project's sale and that further
discussions with the Investor will not be pursued.

 

Since the announcement of the HoTs, the Company has received and is responding
to additional interest in the Project from a number of potential funders
committed to decarbonised, new infrastructure for waste management and energy
generation. Any agreement would be in line with the Company's stated business
strategy of focusing its efforts on high-margin technology and innovation
services, engaging partners and customers to develop and fund the capital
projects that will deploy EQTEC's technologies.

 

To facilitate the transaction with the Investor, and as announced on 26
September 2022, Deeside WTV and Logik had previously agreed to further extend
the longstop date specified in the share purchase agreement signed on 07
December 2020 (as amended on 6 December 2021, 1 April 2022 and 30 June 2022)
(the "SPA"), to 28 February 2023 (the "Long Stop Date"). The Company and its
partners have agreed that the Long Stop Date is to remain unchanged.

 

Trading update  for the current financial year

 

As a direct result of the Company's and its partners' having been unable to
formalise a contract with the Investor for the sale of the Project, the
Company will be unable to recognise within FY 2022 revenues totalling £4.5
million (€5.2 million) related to the Deeside SPV sale.

 

In light of this, the Company has updated its overall FY 2022 revenue
forecast, as presented in its Interim Results on 29 September 2022, to €5 -
7 million. The Company forecasts an updated FY 2022 EBITDA loss in the range
of €4 - 5 million. In its Interim Results, the Company noted that both
revenue and EBITDA guidance were predicated on the progression of projects
with funding, and in particular on progress with the Deeside project.

 

David Palumbo, CEO of EQTEC, commented:

 

"On the one hand, it is disappointing to see this negotiation for purchase of
the Deeside project fall through, with the consequential impact on our 2022
forecast. On the other hand, we view this setback as temporary and not a major
block to progress with the Project. We have already turned to other potential
investors and committed ourselves to securing an alternative financing
solution quickly. In terms of funder interest, the Company is in a very
different position now than a year ago. We have a number of prospective
funders interested in the Deeside project, and we increasingly find ourselves
speaking with bigger and better organised companies with clearer reasons for
working closely with new infrastructure technology providers such as EQTEC. We
remain committed to announcing the funding of Deeside in early 2023 and to
moving at pace from there toward financial close and construction start."

 

This announcement contains inside information as defined in Article 7 of the
EU Market Abuse Regulation No 596/2014, as it forms part of United Kingdom
domestic law by virtue of the European Union (Withdrawal) Act 2018, as
amended, and has been announced in accordance with the Company's obligations
under Article 17 of that Regulation.

 

ENQUIRIES

 EQTEC plc                                                     +44 203 883 7009
 David Palumbo / Nauman Babar

 Strand Hanson - Nomad & Financial Adviser                     +44 20 7409 3494
 James Harris / Richard Johnson

 Panmure Gordon - Joint Broker                                 +44 207 886 2500
 John Prior / Harriette Johnson

 Canaccord Genuity - Joint Broker                              +44 207 523 8000
 Henry Fitzgerald-O'Connor / James Asensio / Patrick Dolaghan

 Alma PR - Financial Media & Investor Relations                +44 203 405 0205
 Josh Royston / Sam Modlin                                     EQTEC@almapr.co.uk (mailto:EQTEC@almapr.co.uk)

 Instinctif - General Media Enquiries                          +44 207 457 2381 / +44 788 788 4794
 Chris Speight / Tim Field                                     EQTEC@instinctif.com (mailto:EQTEC@instinctif.com)

 

Further information about the Project

 

The Project comprises 6.27 hectares of land off Weighbridge Road on Deeside
Industrial Estate and adjacent to the Toyota Deeside Engine Plant, in
Flintshire, north Wales, UK, on a site that was formerly a Gaz de France power
station.

 

The prospective, multi-technology plant would include a material recovery
facility ("MRF") and anaerobic digestion ("AD") facility that would deploy
technologies from Anaergia, Inc. ("Anaergia"), with an advanced thermal
conversion ("ATC") facility that would deploy EQTEC's syngas technology.

 

The MRF would process 182,000 tonnes per year of municipal solid waste
("MSW"), separating recyclables and sending them off site for processing,
separating biogenic materials for processing at the AD facility and producing
refused-derived fuel ("RDF") from the remaining materials, including plastics,
for processing by the EQTEC ATC facility. The 2.0 MW AD facility would produce
5.5 million NM(3) per year of biomethane, with 17,000 MWh of the gas (c. 29%)
exported to Toyota and the remainder exported to the national grid. The 9.9 MW
ATC facility would receive 77,000 tonnes per year of RDF from the MRF and
produce 77 - 87,000 MWh of electricity per year, of which 27,000 MWh (c. 35%)
would be exported to Toyota, with the remainder exported to the national grid.
There is additional potential to apply the ATC facility to production of
hydrogen, for which initial feasibility work has been undertaken.

 

At present, the Company is lead developer for the Project, in partnership with
Logik, which owns the land on which the Project is being developed. As
announced on 28 October 2021, Flintshire County Council's Planning Committee
resolved to grant planning permission for the proposed plant. The planning
authority's decision follows its prior approval of the site for the original
plan of a recycling and AD facility.

 

The Project is one of three waste-to-energy/fuel projects the Group is
developing in the UK, including others at Billingham, Teesside and Southport,
Merseyside.

 

About EQTEC plc

 

As one of the world's most experienced gasification technology and engineering
companies, with a growing track record of delivering operational and
commercial success for transforming waste-to-energy through best-in-class
technology innovation, engineering and project development, EQTEC brings
together design innovation, project delivery discipline and solid commercial
experience to add momentum to the global energy transition. EQTEC's proven,
proprietary and patented technology is at the centre of clean energy projects,
sourcing local waste, championing local businesses, creating local jobs and
supporting the transition to localised, decentralised and resilient energy
systems.

 

EQTEC designs, supplies and builds advanced gasification facilities in the UK,
EU and US, with highly efficient equipment that is modular and scalable from
1MW to 30MW. EQTEC's versatile solutions process over 50 varieties of
feedstock, including forestry wood waste, vegetation and other agricultural
waste from farmers, industrial waste and sludge from factories and municipal
waste, all with no hazardous or toxic emissions. EQTEC's solutions produce a
pure, high-quality synthesis gas ("syngas") that can be used for the widest
range of applications, including the generation of electricity and heat,
production of synthetic natural gas (through methanation) or biofuels (through
Fischer-Tropsch, gas-to-liquid processing) and reforming of hydrogen.

 

EQTEC's technology integration capabilities enable the Group to lead
collaborative ecosystems of qualified partners and to build sustainable waste
reduction and green energy infrastructure around the world.

 

The Company is quoted on AIM (ticker: EQT) and the London Stock Exchange has
awarded EQTEC the Green Economy Mark, which recognises listed companies with
50% or more of revenues from environmental/green solutions.

 

Further information on the Company can be found at www.eqtec.com
(http://www.eqtec.com/) .

 

 

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