EQTEC to Combine with EQTEC Iberia and Create a Leading Company in Waste Gasification to Energy Segment in UK
17 July 2017 - 4:05PM
Business Wire
EQTEC PLC (“EQTEC”, “Company” or the “Group”) (AIM: EQT), the
technology solution company for waste gasification to energy
projects, announces that it has entered into non-binding heads of
terms (“Heads of Terms”) with Inava Ingenieria de Analisis SL
(“Inava”) and the Company’s majority shareholder, EBIOSS Energy SE
(“EBIOSS”) to spin off their subsidiary, EQTEC Iberia SRL (“EQTEC
Iberia”) and combine it with EQTEC plc (the “Proposed
Transaction”).
EQTEC plc will undertake a fundraising that is expected to
comprise a placing of new ordinary shares to raise additional
working capital for the enlarged group as well as fund the
immediate pipeline of projects. VSA Capital have been appointed
Lead Broker and Financial Adviser for the fundraising.
Rationale for the Proposed TransactionThe directors of
EQTEC (the “Directors”) believe that the combining of EQTEC plc and
EQTEC Iberia would create a leading company with proprietary
advanced gasification technology which is used in industrial size
power plants to convert waste into synthetic gas to generate
electricity. Together, the enlarged business will have a highly
experienced management team with knowledge of energy markets, waste
supply and fuel sources, project development engineering and clean
technologies with a pipeline of projects as set out below.
The Directors believe that the enlarged group will have the most
advanced modular gasification technologies available on the market
which offers higher efficiency compared to the other power
generation technologies. As a result, the Directors believe that
this increased efficiency can allow EQTEC to offer more attractive
gate fees than competitors resulting in what the Company believes
is a competitive advantage.
On 10 January 2017, the Company stated, “In order to avail of
the opportunities presenting themselves, particularly in the energy
from waste market in the UK, a strategic partnership with a larger
group such as EBIOSS Energy with its own proprietary technology is
the best path forward. The Board believes that the existing
collaboration between the parties and the existing cooperation in
relation to project pipeline in the UK, means that it makes
strategic sense to have EBIOSS Energy as the majority shareholder
in REACT (now EQTEC PLC), both financially and operationally.” The
Directors maintain that this is still the position and the
announcement today is the logical next step in the process
commenced earlier in the year.
Pipeline of ProjectsThe enlarged business is expected to
have a substantial combined pipeline of projects in UK and Croatia.
EQTEC Iberia has recently announced progress with several
gasification projects in the UK and it is the intention that as
part of the Proposed Transaction, the contracts of these projects
will be transferred to the enlarged EQTEC Plc and implemented by
the Company. These projects include:
- Reliable Melton Hull and Reliable Seal
Sands projects in which EQTEC Iberia will supply its patented
gasification technology, EQTEC Gasifier Technology, as well as
supervise the assembly and commissioning of the plant
- Zebec Energy project located in
municipality of Usk, Wales in which EQTEC Iberia will provide a
turkey solution including designing, supplying gasification
technology, and commissioning the plant
The pipeline also includes the previously announced Catfoss
Newcastle and Renewables Hull projects in the UK and the agreement
with the Croatian energy services company SENSE ESCO Ltd. for the
supply of three gasification plants for the conversion of waste to
be installed in Croatia as announced by EBIOSS, as a substantial
shareholder of EQTEC Iberia, on MAB the Spanish Alternative Equity
Market.
The Proposed Transaction, if completed, will constitute a
reverse takeover ("RTO") under the AIM Rules for Companies (the
"AIM Rules") and therefore, in accordance with Rule 14 of the AIM
Rules, will require the publication of an AIM admission document
("Admission Document") and approval of shareholders of the Company
in general meeting.
In accordance with Rule 14 of the AIM Rules, trading in the
Company's ordinary shares will be suspended on AIM from 7.30 a.m.
today, 17 July 2017, until the publication of the Admission
Document or confirmation is given that the Proposed Transaction is
no longer proceeding. While the Company will seek to publish
the Admission Document as soon as possible, the timing of this
cannot yet be accurately forecast.
The OpportunityThe World Bioenergy Association (“WBA”)
states that waste management is a fast growing environmental
business in the world today. Its report on Energy Recovery from
Waste states that the annual global waste generation accounts for
7-10 billion tonnes in total, out of which approximately 2 billion
tonnes are categorised as municipal solid waste (MSW). It is the
intention of the enlarged EQTEC to tackle this increasing problem.
WBA states that the advantages of using an energy recovery from
waste system are:
- It reduces the volume of waste up to
96%
- Production of heat and electricity
along with solid waste management
- Better sanitation, lower risk of
contamination and diseases
- It has climate change impact as
producing energy from waste avoids potential emissions from
landfilling
Gerry Madden, Chief Executive Officer of EQTEC plc said: “We are
delighted to be taking this important step in the next stage of
development of the business. It is a logical step to take after
partnering with EBIOSS at the start of the year. A lack of domestic
incineration and gasification capacity is forcing the UK to pay
European incinerators to take our waste. Now, by using our
best-in-class technology we have an opportunity, once the
transaction is concluded, to redirect this waste to our pipeline of
UK projects, thereby becoming a leading player in creating
electricity by converting waste into synthetic gas.
“We now look to the future with the goal of realising the
significant value that has been identified from combining with
EQTEC Iberia.”
The Company looks forward to updating the market with further
information in due course.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170716005033/en/
EQTEC PLCGerry Madden / Brendan Halpin, +353 (0)21 2409
056orVSA Capital Limited – Lead Broker and Financial
AdviserAndrew Monk / Andrew Raca, +44 (0)20 3005
5000orLuther Pendragon – Financial PRHarry Chathli, Ana
Ribeiro, Alexis Gore, +44 (0) 207 618 9100
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