New unsecured loan facility of up to £10 million

RNS Number : 3103G

EQTEC PLC

29 March 2022

 

Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information as defined in Article 7 of the Market Abuse Regulation EU No. 596/2014, as retained and applicable in the UK pursuant to the European Union (Withdrawal) Act 2018 (as amended). With the publication of this announcement, this information is now considered to be in the public domain.

29 March 2022

EQTEC plc

("EQTEC" or the "Company")

New unsecured loan facility of up to £10 million

EQTEC plc (AIM: EQT), a world-leading technology innovation company enabling the Net Zero Future through advanced solutions for hydrogen, biofuels, SNG and other energy production, announces that it has entered into arrangements in respect of the provision of a new unsecured loan facility for up to £10 million (the "LoanFacility") with an initial advance of £5 million to be received by the Company on 29 March 2022 (the "Initial Advance").

Highlights

· New unsecured loan facility of up to £10 million to be provided by Riverfort Global Opportunities PCC Limited and YA II PN, Ltd (together, the "Lenders").

· The Loan Facility may be drawn down in multiple instalments, subject to the mutual agreement of the parties and the satisfaction of certain conditions precedent.

·   The Initial Advance of £5 million is to be paid to the Company on 29 March 2022, with any further advances to be agreed between the Lenders and the Company at the relevant time.

· The Initial Advance will be repaid on a monthly basis commencing 5 months after receipt of the advance by the Company and have a final maturity date of 12 months.

· The Company will pay a fixed interest coupon to the Lenders on a quarterly basis calculated as 7.5% of the value of each advance of the Loan Facility.

·   The Company and the Lenders have also entered into a performance agreement pursuant to which the Company may pay a performance fee to the Lenders if the share price of the Company significantly increases whilst the facility is in place. The requirement to make any payments under the performance agreement will only come into effect 90 days following the entering into of the Loan Facility, should the loan not be repaid within 90 days.

· The Company will use the proceeds of the Loan Facility to fund further growth and development activities in its key markets, and for general working capital purposes.

Loan Facility

The Company has entered into a loan agreement with the Lenders for the provision of an unsecured loan facility of up to £10 million.  The Loan Facility may be drawn down in multiple instalments with the Initial Advance being received on 29 March 2022.

Each instalment of the Loan Facility will have a maturity date of 12 months from the date of advance with repayments of principal made on a monthly basis, as set out in a closing statement to be agreed at the time of each advance. The Loan Facility will accrue a fixed interest coupon equivalent to 7.5% of the Initial Advance and of any further advance, payable on a quarterly basis.

Instalments of the Loan Facility subsequent to the Initial Advance are not committed and would only be advanced to the Company in the event that the Lenders and the Company agree in writing and upon the satisfaction of certain conditions precedent. The Loan Agreement has a commitment period of 18 months.

The Company and the Lenders may mutually agree that the Company satisfies any payment of the amounts due under the Loan Agreement by the issue of ordinary shares of €0.001 each in the capital of the Company ("Ordinary Shares") at a reference price of the average daily VWAP for each of the five consecutive trading days preceding the drawdown date of of each advance of the Facility (the "Reference Price"). If such settlement is agreed by the parties, the value of Ordinary Shares the Lenders will receive at the Reference Price will be 115% of the amount of the Loan Facility being settled in lieu of repayment of the debt.

The Company may elect to redeem the Loan Facility early by repaying all outstanding principal and interest together with an early repayment fee of 5% of the outstanding principal at the date of repayment. If the Company elects to repay the Loan Facility early, the Lenders may elect to subscribe up to 20% of the outstanding amount in Ordinary Shares, at the Reference Price. In addition, if the Company completes an equity placing whilst the facility is in place, the Lenders may elect to convert up to 20% of the outstanding amount of the Facility into Ordinary Shares in the Company at the price at which such shares are issued pursuant to the placing and multiplying the resulting number by 1.1.

The Company will receive net approximately £4,750,000 from the Initial Advance following the deduction of a commitment fee of 2.5% of the aggregate amount of the Loan Facility, being £10 million.

The Company will use the proceeds of the Loan Facility to fund further growth and development activities in its key markets, and for general working capital purposes.

Performance Agreement

In consideration of the Lenders providing the Loan Facility to the Company, the parties have entered into the Performance Agreement pursuant to which the Company, should the loan not be repaid within 90 days, has agreed to pay the Lenders a performance fee in the event the market price of the Ordinary Shares exceeds each benchmark share price for five consecutive trading days as follows:

Benchmark share price	Performance fees payable (cumulative)
1.88p	3.13% of aggregate amount of the Loan Facility
2.25p	6.25% of aggregate amount of the Loan Facility
2.63p	9.38% of aggregate amount of the Loan Facility
3.00p	12.50% of aggregate amount of the Loan Facility

The Company, at its sole discretion, can elect to redeem the Loan Facility in full at any time. A performance fee will only be payable in the event the Loan Facility has not been repaid by the Company in full within 90 days following the date of the Loan Agreement (the "Effective Date"). In addition, a further commitment fee of 2.5% of the commitment amount will also be payable on the Effective Date, in the event that the Loan Facility has not been repaid in full by that date. A performance fee is only payable upon the first instance of a share price benchmark being achieved.  

The Company has the right, at its sole discretion, to elect to satisfy any performance fee payment by the issue of Ordinary Shares at a price of 1.07p per share.

The Performance Agreement will automatically expire on the later of the first anniversary of the date of the agreement and the date of repayment of the Loan Facility.

ENQUIRIES

EQTEC plc	[phone]
David Palumbo / Nauman Babar
Strand Hanson - Nomad & Financial Adviser	[phone]
James Harris / James Dance
Arden Partners - Joint Broker	[phone]
Paul Shackleton (Corporate) / Simon Johnson (Sales)
Canaccord Genuity - Joint Broker	[phone]
Henry Fitzgerald-O'Connor / James Asensio / Patrick Dolaghan
Alma PR - Financial Media & Investor Relations	[phone]
Josh Royston / Sam Modlin / Matthew Young	[e-mail]
BECG - General Media Enquiries	[phone] / [phone]
Carrie Lowe / Tom Gosschalk	[e-mail]

About EQTEC plc

As one of the world's most experienced gasification technology and engineering companies, with a growing track record of delivering operational and commercial success for transforming waste-to-energy through best-in-class technology innovation, engineering and project development , EQTEC brings together design innovation, project delivery discipline and solid commercial experience to add momentum to the global energy transition. 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, supplies and builds advanced gasification facilities in the UK, EU and US, with highly efficient equipment that is modular and scalable from 1MW to 30MW. EQTEC's versatile solutions process over 50 varieties of feedstock, including forestry wood waste, vegetation and other agricultural waste from farmers, industrial waste and sludge from factories 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 synthetic 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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