TIDMNCCL
RNS Number : 3304X
Ncondezi Energy Limited
04 May 2021
News Release
Solar Battery Project Fully Financed
4 May 2021: Ncondezi Energy Limited ("Ncondezi" or the
"Company") (AIM: NCCL) is pleased to announce the completion of the
previously announced US$500,000 bridge loan (the "Bridge Loan")
between its wholly owned renewables subsidiary, Ncondezi Green
Power ("NGP") and certain Company Directors to finance the
construction of its Commercial and Industrial ("C&I") 400kWp
solar PV plus 912kWh battery storage project located in Mozambique
(the "Project") :
-- Maiden C&I Project fully financed for target commissioning in June 2021
-- US$500,000 Bridge Loan entered into between NGP, Chairman
Michael Haworth, CEO Hanno Pengilly and NED Scott Fletcher (the
"Lenders")
-- Project implementation progress ongoing, including the completion of:
o Over 50% of solar PV panels mounted
o Site layout marking
o Battery plinth
Ncondezi Chief Executive Officer, Hanno Pengilly said : "Today's
announcement ensures that our maiden solar PV and battery storage
project is fully financed to commission in late June 2021. It
brings the Company one step closer to completing the first of our
pipeline of C&I solar and battery off-grid projects and to our
first cashflow.
The Project also represents a significant opportunity for the
Company to establish first mover advantage in the Mozambique solar
and battery storage C&I sector, which is expected to be a high
growth sector over the coming years as corporates and industrials
look to aggressively implement sustainable forms of self power
generation.
Having reviewed a number of funding options, the Directors
believe that the Bridge Loan is the best way forward from a cost,
speed of execution and certainty of funding perspective, whilst
also ensuring that the Company is still in control of its renewable
energy strategy. The Bridge Loan structure provides the Company
with additional advantages including the ringfencing of debt at the
Ncondezi Green Power subsidiary level and additional optionality
and time to further explore refinancing options. The Company plans
to refinance the Bridge Loan once the Project enters commercial
operation and has been materially de-risked, although discussions
with potential funders have already begun.
All equipment has been successfully transported to Mozambique
and the installation of solar panels is over 50% complete. We are
delighted that progress remains on track and look forward to
providing more updates in due course."
Project Overview
-- 400kWp solar PV plus 912kWh battery storage project
-- Fully off-grid project, believed to be the first project of its type in Mozambique
-- Target Project commissioning in June 2021
-- Utilising market leading equipment including JA Solar panels,
ABB Inverters and Tesla Power Pack
-- Targeting generation of 600MWh and CO2 savings up to 517t per annum
-- 15 year fixed price offtake agreement, denominated in US$ with annual price escalations
-- Contracted revenues of US$3.1 over the life of the Project
To view the latest pictures from site please click on the
following link to the PDF version of the announcement:
http://www.rns-pdf.londonstockexchange.com/rns/3304X_1-2021-5-3.pdf
Director's Bridge Loan key terms:
-- US$500,000 Bridge Loan entered into between NGP, NCCL
Chairman Michael Haworth, CEO Hanno Pengilly and NED Scott
Fletcher.
-- Funding breakdown:
o Michael Haworth: US$50,000
o Hanno Pengilly: US$100,000
o Scott Fletcher: US$350,000
-- Fixed 30% coupon payable by NGP at the earlier of:
o 6 months from first drawdown;
o 20 business days from commissioning of the Project; or
o 20 business days from termination of any of the Project key
commercial agreements
together, the "Repayment Date". Should the commissioning date be
further delayed as a direct result of the COVID-19 pandemic, the
Parties can agree an extension to the Repayment Date for up to 8
months from first drawdown.
-- Increased coupon rate of 50% if NGP fails to repay the Bridge Loan by the Repayment Date.
-- NGP has agreed to enter a subordination deed with the Lenders
pursuant to which the claims of the Lenders against NGP under the
Bridge Loan shall rank ahead of and in priority to the claims of
the Company against NGP under various intra Group loans made by the
Company to NGP.
-- Lender's conversion rights:
o Right to convert the Bridge Loan into equity of NGP at a price
of US$6,650 per ordinary share should NGP fail to repay by the
Repayment Date or under events of default typical for a project of
this nature ("Ordinary Conversion").
o Ordinary Conversion would equate to the Lenders holding 53% of
the then issued share capital of NGP in aggregate.
o NGP has the right to repay the Bridge Loan at any time before
the Ordinary Conversion is completed.
-- Lender's material default conversion rights:
o Right to convert the Bridge Loan into equity of NGP at a price
of US$396 per ordinary share should NGP become insolvent, enter a
creditors process, issue shares without Lender approval or
following 20 business days of a Project event of default, fail to
implement a written request by a Lender to sell the assets of the
Project ("Material Default Conversion").
o Material Default Conversion would equate to the Lenders
holding 95% of the then issued share capital of NGP in
aggregate.
o NGP has the right to repay the Bridge Loan at any time before
a Material Default Conversion is completed.
-- New NGP articles to be adopted to account for potential
conversion of the Bridge Loan, including:
o Ncondezi and Scott Fletcher right to appoint a Director as
long as it holds a minimum shareholding of 10%.
o Minority protection rights including in relation to related
party transactions.
o Right of first refusal, drag along and tag along rights on a
sale of shares.
Related Party Transaction
The Bridge Loan constitutes a related party transaction for the
purposes of AIM Rule 13 of the AIM Rules for Companies.
Accordingly, the Company's Non-Executive Director Aman Sachdeva
(being the only director not involved in the Bridge Loan and
therefore considered to be independent for the purposes of the
related party transaction) considers, having consulted with Liberum
Capital Limited, the Company's Nominated Adviser, the terms of the
Bridge Loan to be fair and reasonable insofar as the Company's
shareholders are concerned.
Enquiries
For further information please visit www.ncondezienergy.com or
contact:
Ncondezi Energy Hanno Pengilly +27 (0) 71 362 3566
Liberum Capital Limited Scott Mathieson, Edward Thomas, +44 (0) 20 3100
NOMAD & Joint Broker Kane Collings 2000
Novum Securities
Limited +44 (0) 20 7399
Joint Broker Colin Rowbury 9427
Pimlico Advisory
Ltd +44 (0) 777 56 55
Investor Relations Elizabeth Johnson 927
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 Hanno
Pengilly, CEO.
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
In 2019, the Company entered the Commercial and Industrial
("C&I") renewable and battery storage sector and in October
2019 announced its first investment in an off grid solar battery
project. The Company has also secured the right to fund a US$5.5m
C&I project development pipeline in Mozambique through a
Relationship Agreement with a C&I developer. The move into the
C&I solar and battery storage sector offers a significant
opportunity for the Company to complement the existing large-scale
baseload power project and access near-term low-risk annuity income
streams which have significant growth potential.
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