REG - EQTEC PLC - New unsecured loan facility of up to £10 million

EQTECAnnouncement

29/03/2022 07:00

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RNS Number : 3103G  EQTEC PLC  29 March 2022

Prior to publication, the information contained within this announcement was
deemed by the Company to constitute inside information as defined in Article 7
of the Market Abuse Regulation EU No. 596/2014, as retained and applicable in
the UK pursuant to the European Union (Withdrawal) Act 2018 (as amended). With
the publication of this announcement, this information is now considered to be
in the public domain.

 

29 March 2022

EQTEC plc

 

("EQTEC" or the "Company")

 

New unsecured loan facility of up to £10 million

 

EQTEC plc (AIM: EQT), a world-leading technology innovation company enabling
the Net Zero Future through advanced solutions for hydrogen, biofuels, SNG and
other energy production, announces that it has entered into arrangements in
respect of the provision of a new unsecured loan facility for up to £10
million (the "Loan Facility") with an initial advance of £5 million to be
received by the Company on 29 March 2022 (the "Initial Advance").

 

Highlights

 

·    New unsecured loan facility of up to £10 million to be provided by
Riverfort Global Opportunities PCC Limited and YA II PN, Ltd (together, the
"Lenders").

·   The Loan Facility may be drawn down in multiple instalments, subject
to the mutual agreement of the parties and the satisfaction of certain
conditions precedent.

·    The Initial Advance of £5 million is to be paid to the Company on 29
March 2022, with any further advances to be agreed between the Lenders and the
Company at the relevant time.

·    The Initial Advance will be repaid on a monthly basis commencing 5
months after receipt of the advance by the Company and have a final maturity
date of 12 months.

·    The Company will pay a fixed interest coupon to the Lenders on a
quarterly basis calculated as 7.5% of the value of each advance of the Loan
Facility.

·    The Company and the Lenders have also entered into a performance
agreement pursuant to which the Company may pay a performance fee to the
Lenders if the share price of the Company significantly increases whilst the
facility is in place. The requirement to make any payments under the
performance agreement will only come into effect 90 days following the
entering into of the Loan Facility, should the loan not be repaid within 90
days.

·    The Company will use the proceeds of the Loan Facility to fund
further growth and development activities in its key markets, and for general
working capital purposes.

 

Loan Facility

 

The Company has entered into a loan agreement with the Lenders for the
provision of an unsecured loan facility of up to £10 million.  The Loan
Facility may be drawn down in multiple instalments with the Initial Advance
being received on 29 March 2022.

 

Each instalment of the Loan Facility will have a maturity date of 12 months
from the date of advance with repayments of principal made on a monthly basis,
as set out in a closing statement to be agreed at the time of each advance.
The Loan Facility will accrue a fixed interest coupon equivalent to 7.5% of
the Initial Advance and of any further advance, payable on a quarterly basis.

 

Instalments of the Loan Facility subsequent to the Initial Advance are not
committed and would only be advanced to the Company in the event that the
Lenders and the Company agree in writing and upon the satisfaction of certain
conditions precedent. The Loan Agreement has a commitment period of 18 months.

 

The Company and the Lenders may mutually agree that the Company satisfies any
payment of the amounts due under the Loan Agreement by the issue of ordinary
shares of €0.001 each in the capital of the Company ("Ordinary Shares") at a
reference price of the average daily VWAP for each of the five consecutive
trading days preceding the drawdown date of of each advance of the Facility
(the "Reference Price"). If such settlement is agreed by the parties, the
value of Ordinary Shares the Lenders will receive at the Reference Price will
be 115% of the amount of the Loan Facility being settled in lieu of repayment
of the debt.

 

The Company may elect to redeem the Loan Facility early by repaying all
outstanding principal and interest together with an early repayment fee of 5%
of the outstanding principal at the date of repayment. If the Company elects
to repay the Loan Facility early, the Lenders may elect to subscribe up to 20%
of the outstanding amount in Ordinary Shares, at the Reference Price. In
addition, if the Company completes an equity placing whilst the facility is in
place, the Lenders may elect to convert up to 20% of the outstanding amount of
the Facility into Ordinary Shares in the Company at the price at which such
shares are issued pursuant to the placing and multiplying the resulting number
by 1.1.

 

The Company will receive net approximately £4,750,000 from the Initial
Advance following the deduction of a commitment fee of 2.5% of the aggregate
amount of the Loan Facility, being £10 million.

 

The Company will use the proceeds of the Loan Facility to fund further growth
and development activities in its key markets, and for general working capital
purposes.

 

Performance Agreement

 

In consideration of the Lenders providing the Loan Facility to the Company,
the parties have entered into the Performance Agreement pursuant to which the
Company, should the loan not be repaid within 90 days, has agreed to pay the
Lenders a performance fee in the event the market price of the Ordinary Shares
exceeds each benchmark share price for five consecutive trading days as
follows:

 

 Benchmark share price  Performance fees payable (cumulative)
 1.88p                  3.13% of aggregate amount of the Loan Facility
 2.25p                  6.25% of aggregate amount of the Loan Facility
 2.63p                  9.38% of aggregate amount of the Loan Facility
 3.00p                  12.50% of aggregate amount of the Loan Facility

 

The Company, at its sole discretion, can elect to redeem the Loan Facility in
full at any time. A performance fee will only be payable in the event the Loan
Facility has not been repaid by the Company in full within 90 days following
the date of the Loan Agreement (the "Effective Date"). In addition, a further
commitment fee of 2.5% of the commitment amount will also be payable on the
Effective Date, in the event that the Loan Facility has not been repaid in
full by that date. A performance fee is only payable upon the first instance
of a share price benchmark being achieved.

 

The Company has the right, at its sole discretion, to elect to satisfy any
performance fee payment by the issue of Ordinary Shares at a price of 1.07p
per share.

 

The Performance Agreement will automatically expire on the later of the first
anniversary of the date of the agreement and the date of repayment of the Loan
Facility.

 

ENQUIRIES

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

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

 Arden Partners - Joint Broker                                 +44 20 7614 5900
 Paul Shackleton (Corporate) / Simon Johnson (Sales)

 Canaccord Genuity - Joint Broker                              +44 20 7523 8000
 Henry Fitzgerald-O'Connor / James Asensio / Patrick Dolaghan

 Alma PR - Financial Media & Investor Relations                +44 20 3405 0205
 Josh Royston / Sam Modlin / Matthew Young                     EQTEC@almapr.co.uk (mailto:EQTEC@almapr.co.uk)

 BECG - General Media Enquiries                                +44 7554 014 188 / +44 7867 452 269
 Carrie Lowe / Tom Gosschalk                                   EQTEC@BECG.com (mailto:EQTEC@BECG.com)

 

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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