Funding Update: Refinancing of existing facility

EQTEC PLC

23 May 2024

 

23 May 2023

EQTEC plc

("EQTEC", the "Company" or the "Group")

Funding Update: Refinancing of existing secured lending facility

The board of EQTEC plc (AIM: EQT), is pleased to confirm that they have secured a refinancing of its existing secured lending facility. The new funding replaces the previous funding with a  non-convertible secured term loan facility with no scheduled repayments until 21 May 2026.

As announced on 20 November 2023 (the "Refinance Announcement"), the Company refinanced the historic debt facilities with YA II PN Ltd and Riverfort Global Opportunities PCC Limited (the "Lenders"). The Lenders agreed to provide a secured facility of up to £10.0 million, as detailed in the Refinance Announcement (the "Previous Funding"). Since the date of the Refinance Announcement, no further funds have been advanced and no further fees have accrued pursuant to the Previous Funding. The outstanding balance on the Previous Funding as at the close of business on 21 May 2024 was £4.9 million, including accrued interest.

The board has now agreed a new non-dilutive funding with the Lenders with effect on 22 May 2024 with no conditions to the refinance (the "Term Loan"). The Term Loan replaces the Previous Funding and  removes any fixed repayment schedule during the term, whilst ensuring that the outstanding debt will only reduce proportionally to future capital inflows prior to the 24-month maturity date. The Term Loan is designed to reduce the Group's short-term liabilities and to enable the Company to focus on funding immediate and ongoing working capital obligations. The new funding also  remove convertible rights as a primary repayment obligation.

The Company and the Lenders entered into an amended and restated facility agreement on 22 May 2024 to refinance the Term Loan, the key terms of which are:

·      A 24 month term ("Term"), with repayment of the principal and interest of each advance due at the expiry of the Term (subject to agreed prepayments as detailed below).

·      9.5% fixed coupon of principal outstanding accruing on the commencement of each 12-month period.

·      No fixed monthly payment or conversion rights. Outstanding amounts will only be converted into shares in the Company in the case of an event of default.

·      Arrangement fee of 5% for each advance.

·      Maximum facility amount reduced to £5.5m, withc. £0.3m undrawn (after costs).

·      Repayment of principal and interest secured by the Debenture previously granted (as detailed in the Refinance Announcement).

·      Agreed prepayments, save as waived in full or part by the Lenders, during the Term:

-     20% of net funds received by the Company of any certain future equity fundraisings;

-     25% of any cash inflows excluding operational turnover or equity placements. This will include the anticipated proceeds of the Logik settlement, details of which were announced by the Company on 3 April 2024; and

-     10% of net revenue (after costs of sales) earned, paid quarterly in arrears.

·      The above repayment terms supersede other repayment obligations to the Lenders that were previously announced.

David Palumbo, CEO of EQTEC, commented:

"We are pleased to secure a new term loan with our secured lenders which we believe is a positive development for EQT. The material reduction in anticipated cash payments to the lenders , combined with the anticipated cash inflows from the Logik settlement payment, will provide a good foundation for EQT to move into a growth phase with increasing recurring monthly revenues from operations. The new facility structured as a 24-month bullet loan evidences the increased confidence from our secured lenders in the business model of the Company through the implementation of our "strategic pivot". We appreciate the continued support from our lenders and shareholders."

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.

ENQUIRIES  

EQTEC plc David Palumbo / Jeffrey Vander Linden	[phone]
Strand Hanson - Nomad & Financial Adviser James Harris / Richard Johnson	[phone]
Fortified Securities - Broker   Guy Wheatley	[phone]
Global Investment Strategy UK Ltd - Broker   Samantha Esqulant	[phone]

About EQTEC plc

As one of the world's most experienced thermochemical conversion technology and engineering companies, EQTEC delivers waste management and new energy solutions through best-in-class innovation and infrastructure engineering and value-added services to owner-operators. EQTEC is one of only a few technology providers directly addressing the challenge of replacing fossil fuels for reliable, baseload energy. EQTEC's proven, proprietary and patented technology is at the centre of clean energy projects, sourcing local waste, championing local businesses, creating local jobs and supporting the transition to localised, decentralised and resilient energy systems.

EQTEC designs, specifies and delivers clean, syngas production solutions in the USA, EU and UK, with highly efficient equipment that is modular and scalable from 1MW to 30MW. EQTEC's versatile solutions process 60 varieties of feedstock, including forestry waste, agricultural waste, industrial waste and municipal waste, all with no hazardous or toxic emissions. EQTEC's solutions produce a pure, high-quality synthesis gas ("syngas") that can be used for the widest range of applications, including the generation of electricity and heat, production of renewable natural gas (through methanation) or biofuels (through Fischer-Tropsch, gas-to-liquid processing) and reforming of hydrogen.

EQTEC's technology integration capabilities enable the Group to lead collaborative ecosystems of qualified partners and to build sustainable waste reduction and green energy infrastructure around the world.

The Company is quoted on AIM (ticker: EQT) and the London Stock Exchange has awarded EQTEC the Green Economy Mark, which recognises listed companies with 50% or more of revenues from environmental/green solutions.

Further information on the Company can be found at www.eqtec.com.

 

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