REG - Mast Energy Dvlpmts. - Pyebridge SPA Deferred Consideration Settlement

Mast Energy DevelopmentsAnnouncement

16/12/2022 07:00

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RNS Number : 9152J  Mast Energy Developments PLC  16 December 2022

Mast Energy Developments PLC

(Incorporated in England and Wales)

(Registration Number: 12886458)

Share code on the LSE: MAST

ISIN: GB00BMBSCV12

("MED" or "the Company")

 

16 December 2022

 

Mast Energy Developments PLC ("MED" or "the Company")

 

 Pyebridge SPA Deferred Consideration Settlement

 

Mast Energy Developments PLC, the UK-based multi-asset owner and operator in
the rapidly growing Reserve Power market announces that it has agreed a
settlement ("Settlement Agreement") with regards to the deferred consideration
owing under the Sale and Purchase Agreement ("SPA") to the vendor, Apex Energy
Ltd ("Apex") of its current flagship producing asset, the 9 MW
Pyebridge Synchronous Gas-powered Flexible Generation Facility (the "Site" or
"Pyebridge"), further to its initial announcement related to the acquisition
of the Site (see RNS dated 12 August 2021). An overview of the key highlights
with regards to the Settlement Agreement is provided below.

 

Settlement Agreement Highlights

 

·    Under the initial terms of the SPA, the Site's acquisition
consideration was £2,500,000 - an initial £1,500,000 paid in cash at
completion during August 2021 and deferred consideration of £1,000,000
("Deferred Consideration") to be paid in two equal tranches 8 months and 12
months respectively from the date of completion.

·    Since acquisition to date, MED has made payments totalling £600,234
toward the Deferred Consideration, consisting of a cash payment to Apex of
£198,366 and qualifying costs totalling £401,868 under the SPA, with a
balance of £399,766 remaining ("Remaining Deferred Consideration").

·    Due to MED's own optimisation of the Site during the months following
acquisition in order to get the Site to perform in line with initial
expectations (see RNS dated 5 July 2022), it has now negotiated and agreed a
settlement with Apex with regards to the Remaining Deferred Consideration,
whereby the Remaining Deferred Consideration is waived, with neither party
having any further claims in this regard.

·    The foregoing settlement means that the total purchase consideration
of Pyebridge will effectively be reduced to a total of c. £2.1m compared to
the initial total purchase consideration of £2.5m under the SPA, resulting in
a cash saving to MED of c. £400k.

·    The new effective purchase consideration and associated saving will
further enhance the Pyebridge Site's economics, profitability, and investment
return, most notably:

o  Purchase consideration per installed MW at c. £233k compared to c. £278k
at acquisition and compared to a typical new build site in the range of c.
£600k to £700k, and

o  Capital investment payback period reduced to c. 4.2 years and unlevered
internal rate of return ("IRR") increased to c. 24%, based on the Site's
current independent base case financial modelling and expected performance.

Pieter Krügel, MED CEO, commented: "We are very pleased with the settlement
agreement negotiated that resulted in a direct cash saving to MED of c. £400k
which is in fact an additional amount of cash available to the Company, and
the positive effect thereof on the Site's economics, profitability, and
investment return.

We look forward to providing the market with further updates in due course as
we progress."

ENDS

This announcement contains inside information for the purposes of the UK
version of the Market Abuse Regulation (EU No. 596/2014) as it forms part of
United Kingdom domestic law by virtue of the European Union (Withdrawal) Act
2018 ("UK MAR"). Upon the publication of this announcement, this inside
information is now considered to be in the public domain.

 

For further information please visit www.med.energy (http://www.med.energy) or
contact:

 

  Pieter Krügel                          info@med.energy                                                       Mast Energy Developments Plc  CEO
  Jonathan Critchley & Keith Swann       +44 (0)20 3869 6080                                                   Clear Capital Markets         Joint Broker
  Zainab Slemang van Rijmenant           zainab@lifacommunications.com (mailto:zainab@lifacommunications.com)  Lifa Communications           Investor and Media

                                                                                                                                             Relations Advisor

 

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