Loanholders Agreement Until November 2022

RNS Number : 0122E

Ncondezi Energy Limited

03 November 2020

 

News Release  

Loanholders Agreement Until November 2022

3 November 2020: Ncondezi Energy Limited ("Ncondezi" or the "Company") (AIM: NCCL) provides the following update on its Shareholder Loan (the "Loan") restructuring process.

Highlights :

· Certain Board and management who represent 39.6% of the Loan have signed a binding Undertaking (the "Undertaking") not to call in the Shareholder Loan before the later of 30 November 2022 or when the Restructuring is completed ("Undertaking Period")

· Undertaking prevents the Loan from being called as a majority agreement representing 66.67% of Loan holders is required

· Undertaking enables the Company to focus on delivering key milestones at its flagship 300MW Ncondezi Project

· Company Chairman, Michael Haworth, and Company Chief Executive Officer, Hanno Pengilly, were signatories to the Undertaking. The parties to the Undertaking have also agreed that during the Undertaking Period they will not transfer their loan or convert it into shares without the consent of the other signatories to the Undertaking or at all if it would cause them to hold less than 34% of the then outstanding principal.

· The Loan matured on 30 November 2019 and has been undergoing a restructuring negotiation with loan holders ("Lenders")

· Ncondezi received "in principle" support from all Lenders for the Restructuring in May 2020

· The Undertaking also reconfirms parties "in principle" support to enter the Loan restructuring proposal as set out below (the "Restructuring"):

o  Extension on existing terms, including 12% annual interest rate and ability for Lenders to swap debt for equity in part or in full at a conversion price of 10.0p per share

o  Minimum 12 month extension from the future Restructuring approval date

o  A right for Ncondezi to pay off the original principal amount of the Loan along with conversion of all interest into Ncondezi shares on AIM at a 25% to 30% premium to the 30 day volume weighted average price ("VWAP")

· The Restructuring is subject to all Lenders agreeing to the documentation and the necessary AIM Rules related party transaction fair and reasonable opinion being considered and approved by the Company's Independent Directors 

· A further announcement will be made once definitive documentation to effect the Restructuring has been entered into.  

Ncondezi Chief Executive Officer, Hanno Pengilly said: "Today's announcement gives clarity that  the Shareholder Loan will not be called for the next 2 years. We are still working to complete the Restructuring  but in the meantime this agreement between loan holders removes the uncertainty for shareholders that the loan could be called in. It again demonstrates the support for the Company from key stakeholders and allows the Company to focus its resources on the Ncondezi Power Project whilst also giving it more flexible fundraising options in the short term."

Related Party Transaction

The proposed Restructuring would likely constitute a related party transaction for the purposes of AIM Rule 13 for Companies. Accordingly, should the Restructuring be agreed by all Lenders and before signing, the Company's Independent Directors would need to consider that the terms of the Restructuring are fair and reasonable insofar as the Company's shareholders are concerned. 

There can be no certainty that the transactions contemplated by this announcement will occur.

Enquiries

For further information please visit www.ncondezienergy.com or contact:

Ncondezi Energy	Hanno Pengilly	[phone]
Liberum Capital Limited NOMAD & Joint Broker	Scott Mathieson, Edward Thomas, Kane Collings	[phone]
Novum Securities Limited Joint Broker	Colin Rowbury	[phone]
Pimlico Advisory Ltd Investor Relations	Elizabeth Johnson	[phone]

Note:

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation ("MAR"). Upon the publication of this announcement via Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain. If you have any queries on this, then please contact Hanno Pengilly, Chief Executive Officer of the Company (responsible for arranging release of this announcement) on [phone].

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 into 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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