SIMEC Atlantis Energy Ltd (LON:SAE) said it looks forward to “an exciting 2021” following the £12mln funding deal announced on Wednesday.
Chief executive Tim Cornelius said in a statement that the new funding facility will allow the renewable and sustainable energy firm to capitalise on new opportunities and ensure it has access to a pool of capital, so it is not “left second-guessing what will happen with equity capital markets post Brexit”.
READ: SIMEC Atlantis Energy strikes £12mln funding deal with US investor
“To be working with a US institutional investor for the first time since our long-standing relationship with Morgan Stanley demonstrates the appetite new investors have for exposure to our flagship projects,” he said.
The initial £2mln of the deal is in exchange for shares which will be issued within a 24-month window and come with several protections for Atlantis, while the line of funding is available to up to £12mln, though Atlantis pointed out that it is not locked into raising any further money, with the option to defer or cancel the facility with no or minimal cost, and an ability to repay drawn amounts.
The line of funding provides dilution protection to Atlantis’ existing shareholders via a floor price.
“We are excited by the progress we have been making over the past few months with our fuel partner, N&P Group, and in particular we are focused on new opportunities to potentially supply fuel not only to Uskmouth, but to third party customers as well,” Cornelius said.
“We are assessing a number of greenfield development sites across the country and look forward to continuing to update the market as we achieve further development and commercial milestones.”
As flagged in a recent update, the company continues to make progress on the Uskmouth conversion project with updates on planning and permitting, along with notifications of EPC contract award and updates on potential private wire power purchase agreements with local industrial users of energy expected in 2021.
“Fuel supply and the logistics associated with timely fuel delivery is an integral part of this project and our joint venture with N+P will de-risk the path to successful financial close,” Cornelius noted.
“We were highly encouraged to hear the government’s positive comments around tidal stream and the role it can play in a sustainable and low carbon energy grid moving forward,” Cornelius continued.
“As an industry leader, we remain firmly committed to the commercialisation of competitively priced tidal energy throughout the UK via our world leading MeyGen project, which is ready for expansion if provided with the right government support, and we also want to ensure that we remain at the forefront of any new opportunities for large scale tidal project development or equipment and services sales opportunities in new markets including France, Japan and Indonesia which we are working on at present.”
