Variation to Billingham Land Purchase Agreement

RNS Number : 3710B

EQTEC PLC

30 September 2022

 

30 September 2022

EQTEC plc

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

Variation to Billingham Land Purchase Agreement

EQTEC plc   (AIM: EQT), a global technology innovator powering distributed, decarbonised, new energy infrastructure through its waste-to-value solutions for hydrogen, biofuels, and energy generation, announces that, further to its announcements on 26 February 2021 and 15 February 2022, Haverton WTV Limited ("Haverton WTV") a wholly owned subsidiary of the Company, and Scott Bros. Enterprises Limited ("Scott Bros") (the "Parties") have reached an agreement (the "Variation") to amend the existing, conditional Land Purchase Agreement (the "LPA") relating to the purchase by Haverton WTV from Scott Bros of the land on which a proposed, up to 25 MWe waste gasification and power plant (the "Project") at Haverton Hill, Billingham, UK, is to be constructed (the "Project Site").

In addition to the amended terms set out below and pursuant to the Variation, the Parties will seek agreement on segregation of the land ownership from the Project SPV to broaden funding and sale options of the Project.  Accordingly, the Parties intend to agree the grant of an option to lease for the letting of the property by Scott Bros to Haverton WTV in respect of the development and operation by Haverton WTV.

Key terms of the Variation are as follows:

· The consideration for purchase of the Project Site remains £8,600,000;

· A deposit amount of £260,000 was paid by Haverton WTV to Scott Bros on 26 February 2021;

· A further payment of £250,000 was paid by Haverton WTV to Scott Bros on 24 February 2022;

· The payment schedule has been amended, such that all remaining amounts payable to Scott Bros will now be included the final payment of £8,090,000 payable at completion of the land purchase, which must occur on or before 23 December 2022 (the "Longstop Date"); and

· The Parties agree they will use all reasonable endeavours to agree and exchange an option to lease as soon as practicable and in any event within eight weeks from the date of the Variation, which, once agreed, will replace the obligation by Haverton WTV to purchase the land.

All other conditions of the LPA remain the same regarding satisfaction or waiver by Haverton WTV of specified conditions prior to the Longstop Date. These conditions refer to development and financing of the Project, including: Haverton WTV's having reached financial close in respect of such financing; Haverton WTV's having agreed the form of key construction, operational, offtake and feedstock contracts; and the Project's having been fully permitted by the relevant planning and environmental authorities.

The Variation follows announcements by the Company on 21 September 2022 about its Southport project and on 26 September 2022 about its Deeside project, whereby the Company indicated its intent to reduce its capital investment commitments and accelerate progress with its business strategy toward becoming exclusively a technology innovator and licensor.

David Palumbo, CEO of EQTEC, commented:

"The Billingham Project is the largest of our three UK projects and might hold the greatest potential for a multi-technology, new energy infrastructure site.  Billingham is in the middle of the Net Zero Teesside zone and surrounded by a wide range of industries seeking clean, baseload energy and biofuels. We have invested time and effort evaluating a range of scenarios toward identifying the optimal use of the Project Site. We are pleased with the support we have received from Scott Bros, who have long-standing investments in Teesside and a clear dedication to its continued growth.  Our intention to separate the land ownership from the Project will further lend to the optionality for investors, supporting pace toward funding and financial close.  As previously announced, we are working with top-tier partners so that EQTEC can focus on technology development and engineering, providing project development services as required. Not only does this seek to release us from capital investment commitments, but once concluded accelerates progress with our business strategy, toward becoming exclusively a technology innovator and licensor."

About the Project

The Project Site is in a heavily industrialised area, adjacent to major plant facilities and estates, including those of CF Fertilisers UK Limited, Seqens Group pharmaceuticals and many others. Through its wholly owned project SPV, Haverton WTV, the Company has secured all relevant permits and permissions to build a refuse-derived fuel ("RDF")-to-combined heat and power ("CHP") facility that would transform 200,000 tonnes per year of RDF into up to 25MW of electricity for export to the national grid, with the potential for creating up to 34MW of thermal energy. The Company has agreed favourable heads of terms for over 250 per cent of its required volume of feedstock, secured the contract for a grid connection and is now pursuing discussions with neighbouring companies about provision of private wire offtake.

On 13 December 2021, the Company confirmed it was investigating new offtake opportunities for the Project and that it was working with partners toward feasibility work. On 18 July 2022, the Company announced that it had selected Petrofac as its front-end engineering design ("FEED") contractor, further confirming that, following full review of multiple financial models for the Project, technical feasibilities and updated site drawings, the Company and its partners were considering a range of additional facilities including for hydrogen production, battery storage and/or hydrogen refuelling. All such options would be subject to further planning permission and agreement of future owners of the Project, which the Company intends to sell in whole or in part.

The primary focus of the Company now is pursuit of Project investors to support FEED work on the CHP facility and development of the several other potential facilities on the site.

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	[phone]
David Palumbo / Nauman Babar
Strand Hanson - Nomad & Financial Adviser	[phone]
James Harris / Richard Johnson
Panmure Gordon - Joint Broker	[phone]
John Prior / Harriette Johnson
Canaccord Genuity - Joint Broker	[phone]
Henry Fitzgerald-O'Connor / James Asensio / Patrick Dolaghan
Alma PR - Financial Media & Investor Relations	[phone]
Josh Royston / Sam Modlin	[e-mail]
Instinctif - General Media Enquiries	[phone] [phone]
Chris Speight / Tim Field	[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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