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EQTEC Exploring Funding Options After Negative Loan Note Reaction

27th Mar 2018 14:50

LONDON (Alliance News) - EQTEC PLC said on Tuesday it is looking for further funding after deciding not to draw down further from the unsecured convertible loan note facility signed in February.

Shares in EQTEC were down 24% at 0.437 pence on Tuesday.

The company said it has been encouraged by recent progress, and is actively exploring opportunities for further funding to replace the funds that would have been available from the loan note facility.

This funding will be used to expand the engineering and commercial team in support of EQTEC's EPC partners, provide adequate working capital in all foreseeable circumstances, and enable future investments.

The company made a decision earlier in March not to draw down further from the GBP7.5 million unsecured convertible loan note facility signed in February "in light of the negative market sentiment and share price reaction that followed the convertible loan note issue".

"It also received clear indications from the loan note investor of an unwillingness to proceed with further tranches under the circumstances. Discussions with the investor and their advisers for the redemption of existing amounts outstanding have ceased for the moment," the company said.

Under the deal, an initial GBP1.5 million tranche was committed. Further draw downs on the debt were at the discretion of EQTEC itself with each tranche having to be between GBP1.5 million and GBP2.0 million in size.

However, EQTEC earlier in March said it had decided not to draw down further from the facility and would seek to repay all funds drawn down as soon as possible.

EQTEC said on Tuesday it has has reviewed and reassessed the most up-to-date management plan, including the likely timing of revenue from two projects added to its pipeline since the start of the year, "which may vary, and made necessary adjustments on the timing and amounts recoverable from historical trade receivables and other material cash flow matters, in order to support the growth of the business".

"In particular, the board notes that the disposal of the Pluckanes wind turbine, which was at the final stages, has not completed and the company is now in discussion with alternative potential acquirers," the company added.


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Eqtec
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