TIDMEQT
RNS Number : 6967T
EQTEC PLC
21 March 2023
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS
RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION,
DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO, THE UNITED
STATES (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE
UNITED STATES OR THE DISTRICT OF COLUMBIA), CANADA, AUSTRALIA,
JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER
JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.
This Announcement does not constitute a prospectus or offering
memorandum or an offer in respect of any securities and is not
intended to provide the basis for any investment decision in
respect of EQTEC plc or other evaluation of any securities of EQTEC
plc or any other entity and should not be considered as a
recommendation that any investor should subscribe for or purchase
any such securities .
This Announcement contains inside information for the purposes
of the UK version of the market abuse regulation (EU No . 596/2014)
as it forms part of United Kingdom domestic law by virtue of the
European Union (Withdrawal) Act 2018 ("UK MAR"). In addition,
market soundings (as defined in UK MAR) were taken in respect of
certain of the matters contained in this Announcement, with the
result that certain persons became aware of such inside
information, as permitted by UK MAR. Upon the publication of this
Announcement, this inside information is now considered to be in
the public domain and such persons shall therefore cease to be in
possession of inside information .
EQTEC plc
("EQTEC", the "Company" or the "Group")
Proposed Equity Issue to raise approximately GBP3.5 million
Issue of Warrants, Broker Option, Loan Facility Prepayment and
Loan Reprofile
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 today announces it has conditionally raised c. GBP3.5
million before expenses, by way of a placing (the "Placing"), via
direct subscriptions with the Company by institutional and other
investors (the "Placees") of units ("Units") at a price of 0.22
pence per Unit (the "Placing Price"). Each Unit comprises one new
ordinary share of EUR0.001 each in the Company ( "Ordinary Share")
and one half of one Ordinary Share purchase warrant ( "Warrant").
Each full Warrant is exercisable at 0.33 pence per new Ordinary
Share.
The Company also announces the reprofiling of existing loan
facilities including the conversion of certain existing debt into
equity and the settlement of strategic supplier fees in new
Ordinary Shares, in each case at the Placing Price.
The Company has appointed Global Investment Strategy UK Limited
("GIS") as its Placing agent to raise up to an additional
GBP550,000 (gross) for the Company via a broker option (the "Broker
Option"), details of which are set out below. Existing shareholders
may apply to GIS for Units pursuant to the Broker Option from the
time of this announcement until 4.45 p.m. UK time on 31 March
2023.
The net proceeds from the Placing will be used for progressing
Market Development Centres ("MDCs"), maintaining business
continuity and driving new Research & Development ("R&D").
In addition, part of the proceeds will be applied to settling a
proportion of the Group's debt, as further detailed below.
The Placing Price represents a discount of approximately 23%
percent from the closing mid-market price of the Company's Ordinary
Shares on AIM on 20 March 2023, being the latest practicable date
before this Announcement, with the Placing and issue of New Shares
(as defined below) and the Ordinary Shares on the exercise of the
Warrants being conducted under the Company's existing share
authorities.
Rationale for the Fundraise and use of funds
The Company's business strategy aims to establish its position
as a world-class technology licensor and innovator. Execution of
that strategy requires that it maintain momentum with development
and commissioning of MDCs, execution of applied R&D with
sufficient lead times to support project opportunities and greater
breadth and depth of strategic partnerships with world-class
infrastructure investors, owner-operators and delivery
partners.
The Company requires specific funding for MDCs, business
continuity and R&D to support its 2023 efforts and 2024 project
opportunities and growth. Specifically, c. GBP1.3 million would be
used to progress the Group's Croatia and France MDCs; c. GBP0.5
million would be used to support business continuity and partner
development through working capital and reprofiling of existing
loans; and c. GBP0.2 million would be used for applied R&D
toward Renewable Natural Gas (" RNG ") and Sustainable Aviation
Fuel (" SAF ") solutions aimed at 2024 projects.
In addition, part of the proceeds will be applied to settling
part of the Group's debt with its largest shareholder, as further
detailed below, with the balance of the proceeds being applied to
general working capital.
David Palumbo, CEO, commented:
"This targeted Placing is focused on supporting strategic
execution in 2023. With the Italia MDC now operational, we have
turned our attention to Croatia and France, growing our portfolio
of well-established and highly credible partners who are developing
projects and deploying EQTEC's Industrial, Utility and Municipal
business solutions. Demand remains strong, and focused execution
remains imperative in the current, uncertain market. We look
forward to updating shareholders as our solutions and brand gain
global traction and the business grows accordingly."
The Placing
A total of 1,595,454,545 Units has been subscribed for at the
Placing Price resulting in the issue of 1,595,454,545 new Ordinary
Shares (the "Placing Shares") and the grant of 797,727,273
Warrants. Each Warrant, which is unlisted and fully transferable,
will entitle the holder thereof to purchase one Ordinary Share at a
price of 0.33 pence (being a 50 percent premium to the Placing
Price) for a period of 24 months from the date on which the Units
are issued pursuant to the Placing.
The Placing is conditional, inter alia, upon admission of the
Placing Shares to trading on AIM becoming effective ("Admission")
by not later than 8.00 a.m. on 29 March 2023 (or such later time
and/or date as the Company may determine, but not later than 8.00
a.m. on 12 April 2023). In addition, the Placing is conditional on
the Company's having received relevant Placing monies from each
Placee prior to Admission.
If any condition of the Placing is not satisfied, the Placing
Shares will not be issued, and all monies received will be returned
to Placees and without interest as soon as possible thereafter. The
Company may at its absolute discretion increase the size of the
Placing. The Placing is not being underwritten.
It is expected that Admission will become effective and that
dealing in the Placing Shares will commence at 8.00 a.m. on 29
March 2023. Warrants will be issued in certificated form to
Subscribers as soon as practicable following Admission.
Settlement of Director remuneration in new Ordinary Shares
The Company is proposing that 24% of the Executive Directors'
remuneration payable in 2023 can be satisfied at the Company's
election by the issue of new Ordinary Shares at the Placing Price,
at the discretion of the Company's remuneration committee. Subject
to terms being agreed, a further announcement, together with any
fair and reasonable opinion as required, would be made at such time
as the Company entered into any such agreement.
Altair participation and Altair Facility prepayment and
increase
Altair Group Investments Limited ("Altair"), the largest
shareholder of the Company, has agreed to subscribe for GBP1.5
million pursuant to the Placing (the "Altair Placing").
In addition, the Company has an existing GBP2 million loan
facility with Altair, as announced on 9 December 2022 (the "Altair
Facility"). The Company and Altair have today entered into an
agreement through which Altair's participation in the Placing will
be applied towards reducing the outstanding amount of GBP1.8
million under the Altair Facility and to increase the maximum
amount of such facility to GBP3.5 million, with GBP1.7 million
remaining available for drawdown following the Altair Placing and
intended repayment (the "Facility Extension"). All other terms of
the Altair Facility remain unchanged.
Altair has an existing holding of 1,152,795,706 Ordinary Shares,
representing 12.24 percent of the Company's issued share capital
and, as such, is a substantial shareholder as defined in the AIM
Rules. Therefore, the Altair Placing and the Facility Extension are
related party transactions pursuant to Rule 13 of the AIM Rules.
Accordingly, the directors of the Company, having consulted with
the Company's nominated adviser, Strand Hanson Limited, consider
the terms of the Altair Placing and the Facility Extension to be
fair and reasonable insofar as the Company's shareholders are
concerned.
David Palumbo and Thomas Quigley are members of Argentari
Capital LLP ("ACL"), a limited partnership, which holds shares and
warrants in the Company, as bare nominee for the beneficial owner,
Altair (the "Altair Holding"). As is the case with a bare nominee
relationship, neither ACL, David Palumbo nor Thomas Quigley has any
beneficial interest in the Altair Holding, nor does any of them
have any direct or indirect ability to deal in or exercise the
voting rights attached to the Altair Holding (all such rights being
specifically reserved to Altair).
As previously announced, David Palumbo is the Founding and
Managing Partner of Origen Capital LLP ("Origen"), a private
investment firm. Origen facilitated the introduction of Altair to
the Company in 2014, together with a number of additional
investors, some of which have since invested in and/or provided
funding to the Company. Origen has also acted as an adviser to
Altair in other real estate investments since 2015. Origen has no
interest in the Company's shares.
Lenders Facility conversion and reprofile
The Company has an existing GBP10 million loan facility with
Riverfort Global Opportunities PCC Limited and YA II PN Limited
(the "Lenders" and the "Lenders Facility"). As at 21 March 2023,
the outstanding balance of the Lenders Facility is GBP5,137,500.
The Lenders have agreed, conditional upon Admission, to convert
GBP887,500 of the current outstanding loan balance into 403,409,091
Units at the Placing Price comprising 403,409,091 new Ordinary
Shares ("Lender Shares") and 201,704,540 share purchase warrants on
the same terms as the Warrants.
The Lenders have also agreed to reprofile the monthly repayment
schedule of the Lenders' Facility for the period until 31 December
2024, with repayments starting on 30 June 2023. A one-off reprofile
fee of 3% of the Lenders' Facility will be added to the outstanding
balance. Following the reprofile, the outstanding balance of the
Lenders' Facility will be GBP4.25 million and a fixed-interest
monthly coupon of GBP31,875 will be payable when repayments
commence.
The Lenders will also receive warrants over 965,909,091 Ordinary
Shares as part of the debt reprofile, exercisable for a period of
two years from the date of grant at a 100 percent premium over the
Placing Price ("Lender Warrants"). However, the Lender Warrants
will be exercisable only once the mid-market closing price of the
Ordinary Shares is equal to or exceeds 0.55 pence at the time of
exercise.
Broker Option
In order to provide registered EQTEC shareholders ("Existing
Shareholders") with an opportunity to participate on the same basis
as Placees, the Company has granted GIS the authority to raise
additional finance for the Company pursuant to the Broker Option by
placing up to an additional 250 million Units ("Broker Option
Units"). Full take-up of this number of Units under the Broker
Option would raise a further GBP550,000 for the Company, before
expenses. The Company and GIS reserve the right to increase the
number of Broker Option Units to be made available.
Existing Shareholders as at close of business on 20 March 2023,
will be eligible to participate in the Broker Option and all orders
from such Existing Shareholders will be accepted and processed by
GIS, subject to scale-back in the event of over-subscription under
the Broker Option. The Broker Option has not been underwritten.
The Broker Option is exercisable by GIS on more than one
occasion, at any time from the time of this announcement to 4.45
p.m. UK time on 31 March 2023, at its absolute discretion and
following consultation with the Company. There is no obligation on
GIS to exercise the Broker Option or to seek to procure subscribers
for the Broker Option.
None of the Broker Option Units are being offered or sold in any
jurisdiction where it would be unlawful to do so. No prospectus
will be issued in connection with the Broker Option.
To subscribe for Broker Option Units, Existing Shareholders
should communicate their bid to GIS via their stockbroker, as GIS
cannot take direct orders from individual private investors.
Existing Shareholders who wish to register their interest in
participating in the Broker Option Shares should instruct their
stockbroker to call GIS on +44 20 7048 9045 . Each bid should state
the number of Broker Option Units the Existing Shareholder wishes
to subscribe for at the Placing Price.
The Company will make a further announcement as soon as
practicable following 31 March 2023 to confirm the number of Broker
Option Units issued pursuant to the Broker Option and the proceeds
of such issue.
Issue of Ordinary Shares to strategic suppliers
The Company further announces that it is proposing to issue, in
aggregate, 106,805,444 new Ordinary Shares (the "Supplier Shares")
at the Placing Price to certain strategic service providers
providing business development and advisory services to the Group
in satisfaction of fees due to them. The issue of the Supplier
Shares will further align the interests of strategic advisers and
service providers with those of the Company and its
shareholders.
Admission
Application will be made to the London Stock Exchange for the
Placing Shares, the Lender Shares and the Supplier Shares, being in
aggregate 2,105,669,080 new Ordinary Shares (the "New Shares"), to
be admitted to trading on AIM. Dealings in the New Shares, which
will all rank pari passu with the Company's existing Ordinary
Shares, are expected to commence at 8.00 a.m. on 29 March 2023 (or
such later time and/or date as the Company agrees, being in any
event no later than 8.00 a.m. on 12 April 2023.
Following Admission, there will be 11,527,148,173 Ordinary
Shares in issue. This number may be used by shareholders as the
denominator for the calculation by which they will determine if
they are required to notify their interest in, or a change in their
interest in, the share capital of the Company.
North Fork project finance restructure
On 12 October 2022, the Company announced the planned financial
restructuring to North Fork Community Power LLC ("NFCP"), with such
restructuring confirmed by the US Bankruptcy Court ("Court") on 08
February 2023. Certain challenges to the bankruptcy process were
denied by the Court, and the Court granted protection against any
derivative claims being brought against the managing members of
NFCP, including the Company. As previously announced, the Company
will remain as an equity shareholder in NFCP with the final
shareholding being determined during the legal process.
ENQUIRIES
EQTEC plc
David Palumbo / Nauman Babar +44 20 3883 7009
Strand Hanson - Nomad & Financial Adviser
James Harris / Richard Johnson +44 20 7409 3494
Panmure Gordon - Broker
John Prior / Hugh Rich +44 20 7886 2500
Global Investment Strategy - Broker
Samantha Esqulant +44 20 7048 9045
Instinctif - Media & investor relations enquiries EQTEC@instinctif.com
Guy Scarborough / Tim Field +44 791 717 8920 / +44 788 788 4794
About EQTEC plc
As one of the world's most experienced thermochemical conversion
technology and engineering companies, EQTEC delivers waste
management and new energy solutions through best-in-class
innovation and infrastructure engineering and value-added services
to owner-operators. EQTEC is one of only a few technology providers
directly addressing the challenge of replacing fossil fuels for
reliable, baseload energy. 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, specifies and delivers clean, syngas production
solutions in the USA, EU and UK, with highly efficient equipment
that is modular and scalable from 1MW to 30MW. EQTEC's versatile
solutions process 60 varieties of feedstock, including forestry
waste, agricultural waste, industrial waste 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 renewable 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 the London Stock Exchange's AIM market
(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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