REG - EQTEC PLC - Funding Update: Refinancing of existing facility

EQTECAnnouncement

23/05/2024 08:30

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RNS Number : 6367P  EQTEC PLC  23 May 2024

23 May 2023

 

EQTEC plc

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

 

Funding Update: Refinancing of existing secured lending facility

 

The board of EQTEC plc (AIM: EQT), is pleased to confirm that they have
secured a refinancing of its existing secured lending facility. The new
funding replaces the previous funding with a  non-convertible secured term
loan facility with no scheduled repayments until 21 May 2026.

 

As announced on 20 November 2023 (the "Refinance Announcement"), the Company
refinanced the historic debt facilities with YA II PN Ltd and Riverfort Global
Opportunities PCC Limited (the "Lenders"). The Lenders agreed to provide a
secured facility of up to £10.0 million, as detailed in the Refinance
Announcement (the "Previous Funding"). Since the date of the Refinance
Announcement, no further funds have been advanced and no further fees have
accrued pursuant to the Previous Funding. The outstanding balance on the
Previous Funding as at the close of business on 21 May 2024 was £4.9 million,
including accrued interest.

 

The board has now agreed a new non-dilutive funding with the Lenders with
effect on 22 May 2024 with no conditions to the refinance (the "Term Loan").
The Term Loan replaces the Previous Funding and  removes any fixed repayment
schedule during the term, whilst ensuring that the outstanding debt will only
reduce proportionally to future capital inflows prior to the 24-month maturity
date. The Term Loan is designed to reduce the Group's short-term liabilities
and to enable the Company to focus on funding immediate and ongoing working
capital obligations. The new funding also  remove convertible rights as a
primary repayment obligation.

 

The Company and the Lenders entered into an amended and restated facility
agreement on 22 May 2024 to refinance the Term Loan, the key terms of which
are:

·      A 24 month term ("Term"), with repayment of the principal and
interest of each advance due at the expiry of the Term (subject to agreed
prepayments as detailed below).

·      9.5% fixed coupon of principal outstanding accruing on the
commencement of each 12-month period.

·      No fixed monthly payment or conversion rights. Outstanding
amounts will only be converted into shares in the Company in the case of an
event of default.

·      Arrangement fee of 5% for each advance.

·      Maximum facility amount reduced to £5.5m, withc. £0.3m undrawn
(after costs).

·      Repayment of principal and interest secured by the Debenture
previously granted (as detailed in the Refinance Announcement).

·      Agreed prepayments, save as waived in full or part by the
Lenders, during the Term:

-     20% of net funds received by the Company of any certain future
equity fundraisings;

-     25% of any cash inflows excluding operational turnover or equity
placements. This will include the anticipated proceeds of the Logik
settlement, details of which were announced by the Company on 3 April 2024;
and

-     10% of net revenue (after costs of sales) earned, paid quarterly in
arrears.

·      The above repayment terms supersede other repayment obligations
to the Lenders that were previously announced.

 

David Palumbo, CEO of EQTEC, commented:

 

"We are pleased to secure a new term loan with our secured lenders which we
believe is a positive development for EQT. The material reduction in
anticipated cash payments to the lenders , combined with the anticipated cash
inflows from the Logik settlement payment, will provide a good foundation for
EQT to move into a growth phase with increasing recurring monthly revenues
from operations. The new facility structured as a 24-month bullet loan
evidences the increased confidence from our secured lenders in the business
model of the Company through the implementation of our "strategic pivot". We
appreciate the continued support from our lenders and shareholders."

 

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 20 3883 7009 

 David Palumbo / Jeffrey Vander Linden 

  
 Strand Hanson - Nomad & Financial Adviser        +44 20 7409 3494 

 James Harris / Richard Johnson 

  
 Fortified Securities - Broker                    +44 20 3411 7773 

 Guy Wheatley 

  
 Global Investment Strategy UK Ltd - Broker       +44 20 7048 9045 

 Samantha Esqulant 

 

About EQTEC plc

 

As one of the world's most experienced thermochemical conversion technology
and engineering companies, EQTEC delivers waste management and new energy
solutions through best-in-class innovation and infrastructure engineering and
value-added services to owner-operators. EQTEC is one of only a few technology
providers directly addressing the challenge of replacing fossil fuels for
reliable, baseload energy. 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, specifies and delivers clean, syngas production solutions in
the USA, EU and UK, with highly efficient equipment that is modular and
scalable from 1MW to 30MW. EQTEC's versatile solutions process 60 varieties of
feedstock, including forestry waste, agricultural waste, industrial waste 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 renewable 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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