REG - SIMEC AtlantisEnergy - Land Sale, Abundance Bonds & Business Update

SIMEC Atlantis EnergyAnnouncement

05/12/2023 16:30

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RNS Number : 7699V  SIMEC Atlantis Energy Limited  05 December 2023

5 December 2023

 

 

SIMEC Atlantis Energy Limited

("SAE Renewables", "SAE", the "Company" and, together with its subsidiaries,
the "Group")

 

 

Freehold land sale at Uskmouth, proposed Abundance Bonds extension and
Business update

 

 

Sale of land to Electric Land

 

SAE is delighted to announce that it has today signed an agreement with EL
(Uskmouth) Limited a subsidiary of FPC Electric Land Ltd for the sale ("Sale")
of the freehold land owned by SAE and currently leased by a portfolio company
of Quinbrook Infrastructure Partners who are constructing the first battery
energy storage system ("BESS") at Uskmouth Sustainable Energy Park ("USEP"),
as announced by the Company on 24 May 2023. SAE will receive a total cash
consideration of £9.8 million from the Sale. The consideration will be
received in a series of milestone payments, linked to the BESS construction
progress, throughout 2024 and into 2025. SAE had previously notified its
intention to monetise the lease income on the land and the Sale is the
culmination of that process, allowing SAE to deliver against its objectives.
The Sale also validates SAE's valuation assumptions for the BESS projects
available at USEP. As the owner of significant freehold land at USEP, SAE is
able to deliver both project development premiums and income from monetising
the land leases on future BESS projects.

 

As announced on 30 August 2022, SAE entered a revenue sharing agreement with
SIMEC UK Energy Holding Ltd ("SIMEC") for this first BESS. To close this
agreement out, SAE has agreed to pay SIMEC £0.7 million of the received
revenue from the £9.8 million for the full settlement of this agreement.

 

Business Update

 

At the USEP, progress continues to be made on the additional 120MW BESS
project, which re-uses the site of the cooling towers of the former Uskmouth
power station. The planning application for this project has been submitted
and a decision is expected in Q1 2024. SAE is working with another developer
on a 249MW BESS project and has secured additional grid capacity of 349MW.
Furthermore, the first BESS project has rights under agreements with SAE to
expand from 230MW to 349MW. This brings the total potential capacity at USEP
for BESS projects to over 1GW.

 

Additionally, SAE is developing a 200MW BESS utilising the MeyGen grid
connection. The BESS project will be located close to the MeyGen tidal array's
onshore substation and will operate alongside the consented 86MW tidal stream
project when built.

 

As well as the delivery of the BESS projects, SAE is making good progress on
the delivery of the world leading MeyGen tidal stream project. The three
operating turbines are working well following their upgrades and SAE is on
track to have the fourth deployed in Q2 2024.

 

The delivery of the 50MW next phase of MeyGen continues to be a priority for
management. While the delivery of this project remains hugely challenging,
securing the revenue for 50MW of capacity is a huge step forward. We are
working with all stakeholders to continue to move forward the delivery of this
project and the future phases. In this regard, we welcome the recently
announced increase in the Administrative Strike Price to £261/MWh for tidal
stream projects for the next auction round, which is due in 2024 and is
expected to provide opportunities for further expansion of the MeyGen project.

 

 

 

Proposed Abundance Bonds extension

 

SAE is today issuing a communication (which may be viewed on the Company's
website at www.saerenewables.com/investor-relations
(https://ddec1-0-en-ctp.trendmicro.com:443/wis/clicktime/v1/query?url=http%3a%2f%2fwww.saerenewables.com%2finvestor%2drelations&umid=e0de3984-603e-4ccc-a760-e456c25ab6b1&auth=4ccf32dcefb144c6376a15ddd1186767cf5aa6b4-3e51628422bf274db391395528d7ec80300c735c)
) to the holders of the debentures issued in 2017 through Atlantis Ocean
Energy (the "AOE 2017 debentures"), the holders of debentures issued in 2018
through Atlantis Future Energy (the "AFE 2018 debentures") and the holders of
the debentures issued in 2019 through Atlantis Future Energy (the "AFE 2019
debentures"), with the support of Abundance Investment Limited, requesting
amendments to the debenture deeds.

 

The requested changes will allow SAE to unlock significant revenue
opportunities through the delivery of multiple utility scale BESS projects,
along with further development of its tidal business. SAE is confident that
the income from these projects will be sufficient to repay the debenture
capital, (as more fully detailed below) while still delivering on its business
objectives.

 

The full request to the debenture holders includes:

 

·      extend the AOE 2017 debentures maturity date from 30 June 2024 to
30 June 2029,

·      extend the AFE 2018 debentures maturity date from 31 March 2024
to 30 June 2029,

·      extend the AFE 2019 debentures maturity date from 30 September
2024 to 30 June 2029,

·      pay an enhanced interest rate for the extension period applicable
to the AFE 2019 debentures of 10% p.a.,

·      pay an enhanced interest rate for each of the three debentures
from 1 January 2027 to 31 December 2027 of 11% p.a.,

·      pay an enhanced interest rate for each of the three debentures
from 1 January 2028 to 31 December 2028 of 12% p.a.,

·      pay an enhanced interest rate for each of the three debentures
from 1 January 2029 to 30 June 2029 of 13% p.a.,

·      make an early capital repayment allocable across all three
debentures of £1,000,000 on the 31 December 2025,

·      make an early capital repayment allocable across all three
debentures of £2,000,000 on the 31 December 2026, and

·      make an early capital repayment allocable across all three
debentures of £3,000,000 on the 31 December 2027.

 

The requested amendments require the agreement of 75% of the debenture holders
by value. The results of the vote are expected during December 2023.

 

SAE Renewables will provide a further update at that time.

 

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.

 

For further information, please contact:

 

 SAE Renewables                                           +44 (0)7739 832 446

 Sean Parsons, Director of External Affair

 Strand Hanson Limited (Nominated and Financial Adviser)  +44 (0)20 7409 3494

 Richard Johnson

 Rory Murphy

 David Asquith

 Zeus Capital Limited (Broker)                            +44 (0)20 3829 5000

 Louisa Waddell

 Simon Johnson

 

Notes to Editors

SAE Renewables is a global developer, owner and operator of sustainable energy
projects. SAE owns the world's flagship tidal stream project, MeyGen. SAE is
also the owner of the Uskmouth Power Station site that is being repurposed
into a sustainable energy park, initially housing one of the UK's largest
battery energy storage projects. https://www.saerenewables.com/
(https://www.saerenewables.com/)

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