REG - EQTEC PLC - Variation to Billingham Land Purchase Agreement

EQTECAnnouncement

30/09/2022 12:00

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RNS Number : 3710B  EQTEC PLC  30 September 2022

 

 

30 September 2022

EQTEC plc

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

 

Variation to Billingham Land Purchase Agreement

 

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, announces that, further to its
announcements on 26 February 2021 and 15 February 2022, Haverton WTV Limited
("Haverton WTV") a wholly owned subsidiary of the Company, and Scott Bros.
Enterprises Limited ("Scott Bros") (the "Parties") have reached an agreement
(the "Variation") to amend the existing, conditional Land Purchase Agreement
(the "LPA") relating to the purchase by Haverton WTV from Scott Bros of the
land on which a proposed, up to 25 MWe waste gasification and power plant (the
"Project") at Haverton Hill, Billingham, UK, is to be constructed (the
"Project Site").

 

In addition to the amended terms set out below and pursuant to the Variation,
the Parties will seek agreement on segregation of the land ownership from the
Project SPV to broaden funding and sale options of the Project.  Accordingly,
the Parties intend to agree the grant of an option to lease for the letting of
the property by Scott Bros to Haverton WTV in respect of the development and
operation by Haverton WTV.

 

Key terms of the Variation are as follows:

 

·    The consideration for purchase of the Project Site remains
£8,600,000;

·    A deposit amount of £260,000 was paid by Haverton WTV to Scott Bros
on 26 February 2021;

·    A further payment of £250,000 was paid by Haverton WTV to Scott Bros
on 24 February 2022;

·    The payment schedule has been amended, such that all remaining
amounts payable to Scott Bros will now be included the final payment of
£8,090,000 payable at completion of the land purchase, which must occur on or
before 23 December 2022 (the "Longstop Date"); and

·    The Parties agree they will use all reasonable endeavours to agree
and exchange an option to lease as soon as practicable and in any event within
eight weeks from the date of the Variation, which, once agreed, will replace
the obligation by Haverton WTV to purchase the land.

 

All other conditions of the LPA remain the same regarding satisfaction or
waiver by Haverton WTV of specified conditions prior to the Longstop Date.
These conditions refer to development and financing of the Project, including:
Haverton WTV's having reached financial close in respect of such financing;
Haverton WTV's having agreed the form of key construction, operational,
offtake and feedstock contracts; and the Project's having been fully permitted
by the relevant planning and environmental authorities.

 

The Variation follows announcements by the Company on 21 September 2022 about
its Southport project and on 26 September 2022 about its Deeside project,
whereby the Company indicated its intent to reduce its capital investment
commitments and accelerate progress with its business strategy toward becoming
exclusively a technology innovator and licensor.

 

David Palumbo, CEO of EQTEC, commented:

 

"The Billingham Project is the largest of our three UK projects and might hold
the greatest potential for a multi-technology, new energy infrastructure
site.  Billingham is in the middle of the Net Zero Teesside zone and
surrounded by a wide range of industries seeking clean, baseload energy and
biofuels. We have invested time and effort evaluating a range of scenarios
toward identifying the optimal use of the Project Site. We are pleased with
the support we have received from Scott Bros, who have long-standing
investments in Teesside and a clear dedication to its continued growth.  Our
intention to separate the land ownership from the Project will further lend to
the optionality for investors, supporting pace toward funding and financial
close.  As previously announced, we are working with top-tier partners so
that EQTEC can focus on technology development and engineering, providing
project development services as required. Not only does this seek to release
us from capital investment commitments, but once concluded accelerates
progress with our business strategy, toward becoming exclusively a technology
innovator and licensor."

 

About the Project

 

The Project Site is in a heavily industrialised area, adjacent to major plant
facilities and estates, including those of CF Fertilisers UK Limited, Seqens
Group pharmaceuticals and many others. Through its wholly owned project SPV,
Haverton WTV, the Company has secured all relevant permits and permissions to
build a refuse-derived fuel ("RDF")-to-combined heat and power ("CHP")
facility that would transform 200,000 tonnes per year of RDF into up to 25MW
of electricity for export to the national grid, with the potential for
creating up to 34MW of thermal energy. The Company has agreed favourable heads
of terms for over 250 per cent of its required volume of feedstock, secured
the contract for a grid connection and is now pursuing discussions with
neighbouring companies about provision of private wire offtake.

 

On 13 December 2021, the Company confirmed it was investigating new offtake
opportunities for the Project and that it was working with partners toward
feasibility work. On 18 July 2022, the Company announced that it had selected
Petrofac as its front-end engineering design ("FEED") contractor, further
confirming that, following full review of multiple financial models for the
Project, technical feasibilities and updated site drawings, the Company and
its partners were considering a range of additional facilities including for
hydrogen production, battery storage and/or hydrogen refuelling. All such
options would be subject to further planning permission and agreement of
future owners of the Project, which the Company intends to sell in whole or in
part.

 

The primary focus of the Company now is pursuit of Project investors to
support FEED work on the CHP facility and development of the several other
potential facilities on the site.

 

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 - Joint Broker                                 +44 20 7886 2500
 John Prior / Harriette Johnson

 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                                     EQTEC@almapr.co.uk (mailto:EQTEC@almapr.co.uk)

 Instinctif - General Media Enquiries                          +44 20 7457 2381

                                                               +44 788 788 4794
 Chris Speight / Tim Field                                     EQTEC@instinctif.com (mailto:EQTEC@instinctif.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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