REG - EQTEC PLC - Sale of France Market Development Centre to Idex

EQTECAnnouncement

12/07/2023 07:00

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RNS Number : 7082F  EQTEC PLC  12 July 2023

12 July 2023

 

EQTEC plc

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

 

Sale of France Market Development Centre to Idex

 

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 is pleased to announce that it
has agreed with French infrastructure owner and utility company Idex to the
sale of 95% of the share capital of Grande-Combe SAS ("Grande-Combe"), the
project company for the Company's France Market Development Centre ("MDC") and
the project to construct and commission it ("France MDC").

 

Idex's acquisition of Grande-Combe from the Company has been formalised
through execution of a share-purchase agreement (the "SPA") and a
shareholders' agreement (together with the SPA, the "Agreement"). Under the
terms of the Agreement, Idex acquires the project for construction and
commissioning of France MDC and EQTEC remains the integrator and licensor of
core technology, also retaining the right to utilise France MDC as a MDC.

 

Highlights

 •    Under the SPA, Idex acquires 95% of the share capital in Grande-Combe, with
      EQTEC retaining a 5% carried interest; EQTEC's carried interest requires no
      financial investment by EQTEC;
 •    In respect of the acquired share capital, the Company receives a fixed
      consideration of €750,000, payable at completion of the transaction (the
      "Fixed Consideration");
 •    In addition to the Fixed Consideration, the Company is eligible to receive
      additional payments up to full commissioning of the France MDC, subject to
      achieving performance milestones and for a combined total of up to €750,000;
 •    In addition, under the Agreement, EQTEC will receive fees for engineering
      services, equipment, commissioning and licensing over the period Q4 2023 - Q1
      2025, estimated to amount in total c. €15 million; and
 •    Under the Agreement, the Company is entitled to utilise France MDC for one
      prospective client visit per month, with more visits possible under specific
      terms.

 

The Agreement follows the Company's announcement on 27 March 2023 that it and
Idex had been awarded a project by the Limoges Métropole in
Nouvelle-Aquitaine, France through which the partners intend to commission a
plant able to convert up to 45,000 tonnes per year of mixed waste, including
contaminated wood waste, into up to nine million normal cubic metres per year
of renewable natural gas, with Idex developing, owning and operating the
plant.

 

The Agreement supports the Company's business strategy of working with
top-tier partners able to support the development, construction, commissioning
and operations of plants running EQTEC technology, so that the Company may
focus on executing and earning revenue from its core capabilities of
technology development and engineering.

 

David Palumbo, EQTEC CEO, commented:

 

"We believe this Agreement cements our commitment to the live operation of the
France MDC whilst evidencing the growing profile of EQTEC technology among
well-established utilities and operators of energy infrastructure. This third
MDC and second project in partnership with Idex, which is owned by leading
private equity firm Antin Infrastructure Partners, indicates growing demand
from innovative, blue-chip partners and funders to build and operate new
energy infrastructure powered by EQTEC to futureproof their operations. With
the strength and track record of Idex alongside EQTEC's disruptive technology,
this Agreement and our growing partnership represent joint leadership in the
exciting and diverse market for renewable energy in France. We believe this
deepening relationship will result in more plants in France in years to come.

"In addition to positioning itself as an innovative, vertically integrated,
decarbonising energy company, Idex has been a constructive and valuable
partner to the Company and represents a strong, future route to market for
EQTEC technology as well as a collaborator in deploying our Utility solutions
and a well-known name with the capability to develop, own and operate a
portfolio of plants with EQTEC technology."

Benjamin Fremaux, Idex CEO, commented:

 

"Idex has a strong track record deploying waste-to-energy infrastructure in
France that contributes to French baseload energy requirements.

 

"Idex is willing to grow its footprint in this domain and has selected EQTEC
technology to do so. We are delighted to cooperate with EQTEC at both Limoges
and now Grande-Combe, where EQTEC technology enables Idex to propose
attractive commercial terms, paving the way for future developments to grow.

 

"Idex is today the only vertically integrated market operator across the
entire energy value chain.  We engage in energy production from local and
carbon-free energy resources, energy distribution through heating and cooling
networks and up to energy optimisation of its final use in industrial,
residential and tertiary buildings."

 

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 / Nauman Babar

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

 James Harris / Richard Johnson

 Panmure Gordon - Broker                                +44 20 7886 2500

 John Prior / Hugh Rich

 Instinctif - Media & investor relations enquiries      EQTEC@instinctif.com (mailto:EQTEC@instinctif.com)

 Guy Scarborough / Tim Field                            +44 791 717 8920 / +44 788 788 4794

 

About the project

 

The project will see the replacement of core technology and relevant ancillary
equipment at an existing plant originally developed by Group Bonnefoy at its
stone quarry site located at Villers-sous-Montrond, Doubs, France, near the
Franco-Swiss border. The existing gasification plant was designed using
non-EQTEC technologies but was never fully commissioned, as the previous
technology did not successfully complete performance and endurance tests. As a
result, the previous project company, SPV Synnov Déchets SAS, entered
bankruptcy in November 2021, after which the Company was approached as a
potential buyer.

 

The Company on 14 March 2021 announced its intention to acquire, upgrade and
recommission the 6.5 MWe plant, replacing the failed gasification technology
with EQTEC technology. On 07 September 2022, the acquisition was approved and
finalised by France's Ministère de l'Économie, des Finances et de
l'Industrie (MINEFI). It is the Company's intention that the France MDC
process diverse feedstock, with a combination of wood, contaminated wood and
RDF and is expected to be France's largest ever gasification project for
combined heat and power.

 

About Idex

 

Founded in France in 1963, Idex develops, designs, finances, builds and
operates local energy and carbon-free infrastructure, which provides renewable
heat and local electricity supply to buildings, cities & industry.

 

With 5,700 employees and a turnover of €2 billion in 2022, Idex is currently
the only vertically integrated market operator delivering the complete value
chain for local energy provision. The Group is involved in the production of
thermal or electrical energy from local and low-carbon energy resources
(geothermal, solar, biomass, waste), the distribution of this energy through
district heating and cooling networks, to its final use in industrial,
residential and tertiary buildings and other applications.

 

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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