US$1.3 million Sale of C&I Subsidiary
03/12/2021 06:59
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RNS Number : 4410U Ncondezi Energy Limited 03 December 2021
News Release
US$1.3 million Sale of C&I Subsidiary
3 December 2021: Ncondezi Energy Limited ("Ncondezi" or the "Company")
(AIM:NCCL) announces that Ncondezi Green Power Holding Limited ("NGP"), the
Company's wholly owned renewable energy subsidiary, has entered into a sale
and purchase agreement ("SPA") with Green Energy SPV PLC ("Green Energy") and
sold Mozambique Green Power ("MGP"), the group company which owns the group's
maiden Commercial and Industrial ("C&I") 400kWP solar and 912 kWh battery
storage project in Mozambique.
Key highlights
· Acquisition price US$1.3 million paid in cash (the
"Consideration") on completion which has occurred
· Green Energy is a newly formed company controlled by Ncondezi
Energy Non-Executive Director, Scott Fletcher
· Proceeds to be used to repay the Bridge Loan which, as announced
on 15 October becomes due on 7 December and the remainder of the proposed
Consideration, estimated at $650,000 to be used for general working capital
purposes
SPA
Under the sale and purchase agreement, NGP has sold to Green Energy the entire
issued share capital of MGP for a total consideration of US$1.3 million in
cash. Under the terms of the SPA it has been agreed that:
(i) NGP has terminated certain exclusivity agreements with
NESA Capital (PTY) Ltd, and Nesa Venture Capital Investments (PTY ) Limited;
and
(ii) Ncondezi has waived certain contractual rights in
relation to Hanno Pengilly and Scott Fletcher under their letter of
appointment and service agreement with Ncondezi, respectively such that they
will both be permitted to participate in any commercial and industrial solar
photovoltaic and battery storage projects carried out by Green Energy
following completion of the transaction.
The Company has also guaranteed performance by NGP of its obligations under
the agreement. NGP has given customary warranties in relation to its authority
to enter into the transaction, its ownership of the shares and the business of
MGP. NGP has also given an indemnity regarding the financial position of MGP
and certain other matters. The warranties relating to the business of MGP
and the indemnities are subject to a number of limitations.
Related Party Transactions
Both the sale of MGP to Green Energy and the requirement to repay the Bridge
Loan from the proceeds of the sale constitute related party transactions for
the purposes of AIM Rule 13. Accordingly, the Company's Non-Executive
Director Aman Sachdeva (being the only director considered to be independent
for the purposes of the related party transactions) considers, having
consulted with Liberum Capital Limited, the Company's Nominated Adviser, both
the terms of the SPA for the sale of MGP to Green Energy and the repayment of
the Bridge Loan from the proceeds of the sale to be fair and reasonable
insofar as the Company's shareholders are concerned.
Ncondezi Non-Executive Director Aman Sachdeva said: "Following the strategic
review we launched in June and in an increasingly challenging post COP26
environment, selling the C&I subsidiary allows the Company to fully focus
on progressing the Company's main project, the Ncondezi Project with our
Strategic Partner, China Machinery Engineering Corp and we are working on
finalising the tariff as soon as possible.
Following completion of the strategic review process, Green Energy's offer
provides a premium valuation with an easy to execute structure. It also
provides a non dilutive solution which ensures the Bridge Loan will be repaid
on time and provides additional working capital to the Company as it focuses
on the Ncondezi Project.
Commissioning of the maiden C&I project demonstrated the Company's ability
to deliver a power project in Mozambique, utilising new technologies, in the
midst of a global pandemic. It strengthened both our knowledge base and skill
sets in ways which we are confident will benefit the Ncondezi Project going
forwards. In the meantime progress continues to be made on the Ncondezi
Project with all key parties."
Enquiries
For further information please visit www.ncondezienergy.com or contact:
Ncondezi Energy Hanno Pengilly +27 (0) 71 362 3566
Scott Mathieson, Edward Thomas, Kane Collings +44 (0) 20 3100 2000
Liberum Capital Limited
NOMAD & Joint Broker
Novum Securities Limited Colin Rowbury +44 (0) 20 7399 9427
Joint Broker
Elizabeth Johnson +44 (0) 777 56 55 927
Pimlico Advisory Ltd
Investor Relations
This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 which is part of UK law by virtue of
the European Union (Withdrawal) Act 2018. Upon publication of this
Announcement and such information is now considered to be in the public
domain. The person who arranged for the release of this announcement on behalf
of the Company was Aman Sachdeva.
About Ncondezi Energy
Ncondezi is an African power development company with an advanced staged,
integrated 300MW thermal coal power plant and mine project located in the Tete
Province, Northern Mozambique.
The Company is focused on providing reliable, affordable and accessible
baseload energy to Mozambique and secure against the effects of water drought
and intermittency of new renewables. This project supports Mozambique's energy
strategy of universal electricity access by 2030. According to the World Bank,
only 30% of the Mozambican population had access to energy in 2017. The
Ncondezi Project would provide 300MW of reliable and available power helping
to close the infrastructure gap of the region and serving as a catalyst for
economic development.
The power plant will be designed to be equipped with state-of-the-art
emissions controls technologies that will reduce local air pollutants,
minimizing the plant's impact on the environment and ensuring its compliance
with the most stringent emission standards
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