11th May 2016 15:38
LONDON (Alliance News) - Ncondezi Energy Ltd said Wednesday it has signed a USD1.3 million loan facility with some directors, management and long term shareholders to fund its working capital requirements to realise its joint development agreement with Shanghai Electric Power Co Ltd.
USD500,000 is being provided by a trust of which the company's Non-Executive Chairman Michael Haworth is a potential beneficiary, whilst USD108,000 is being provided by Executive Director and Chief Operations Officer, Chris Schutte, USD35,000 from Non-Executive Director, Estevao Pale, and USD147,000 from Ncondezi management.
It expects this loan to provide it with sufficient funding until the end of the third quarter of 2016.
Following completion of the joint development agreement, Ncondezi said it will require additional funding to cover some corporate and mine development costs that will not be funded by the agreement. It is exploring "a number" of funding options, and said it expects to be in a strong position to raise capital once the joint development agreement is effective.
"We are delighted that directors and management together with a number of long term shareholders have demonstrated their continued financial support of the company through the provision of a shareholder loan to assist the company in delivering the JDA with SEP, a subsidiary of one of the largest power generation groups in China with a total group installed capacity of over 100,000 MW," said Haworth in a statement.
"The company believes that the loan is the most attractive financial solution to bridge the funding gap to make the JDA effective, particularly given that it will result in no equity dilution to existing shareholders ahead of a major milestone event with SEP. Based on the timetables agreed, the board believes that Ncondezi is now fully funded to make the JDA effective," Haworth added.
Shares in Ncondezi closed up 33% at 6.00 pence Wednesday afternoon.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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