EQTEC PLC (LON:EQT) said it has signed a share purchase agreement (SPA) to acquire full ownership of the Deeside Refuse Derived Fuel (RDF) project in Wales.
The gasification technology specialist said an initial consideration of GBP2.31mln, including a deposit amount of GBP300,000, from which an existing exclusivity payment of GBP100,000 will be deducted, is payable on signing of the SPA and the balance of GBP2.01mln will be payable on or before a date 12 months from the date of signing.
An additional deferred consideration of GBP2.29mln is also payable on the achievement of certain conditions relating to development milestones of the project.
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EQTEC also said it will issue a fixed dividend share to the seller, Logik Developments Limited, giving it the right to 5% of distributable profits. An additional development premium or overage payment of up to GBP5.4mln is payable on the securing of funding for a waste reception & anaerobic digestion plant on the site as well as funding for an advanced gasification plant.
The company said the project is part of a portfolio of projects currently under review by a European owner-operator of waste to energy infrastructure, which is expecting to provide the financing required for the construction phases and commercially operate the plants and the project via investment into Deeside.
EQTEC said it expects to act as the project developer if financing is concluded, and will provide design and core advance gasification technology and retain a portion for the operation & maintenance contract.
The firm added that discussions with potential engineering, procurement and construction (EPC) are ongoing and the documentation required for tendering the EPC contract for the first phase of the Deeside project is currently being produced. EQTEC said once full commercial EPC offers are reviewed and negotiated to contract, a final decision will be reached with regards to the funding structure for the project.
The company also said it is progressing discussions about a potential framework collaboration agreement with Logik that is expected to cover the keys terms of a proposed cooperation for the development of a portfolio of waste to energy projects that Logik is currently pursuing in the north of England and across the UK.
“We are pleased to have signed this SPA to acquire the project [special purpose vehicle] for the Deeside RDF Project after completing our due diligence, making good progress on funding discussions and shortlisting EPC companies for the project. We estimate that, with the application of EQTEC’s advanced gasification technology, the project would convert hundreds of thousands of tonnes per year of non-recyclable everyday household and commercial waste otherwise destined for landfill or incineration”, EQTEC chief executive David Palumbo said in a statement.
“In this way, EQTEC expects to be able to significantly improve both the economics and the environmental impact of this plant and many traditional waste-to-energy facilities, bringing employment to the local area and economic and environmental benefits to both the local community and large industrial energy users, whilst delivering attractive returns to EQTEC’s shareholders”, he added.
EQTEC shares jumped 6.5% to 1p in mid-morning deals on Tuesday.
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