20th Nov 2018 11:30
LONDON (Alliance News) - SIMEC Atlantis Energy Ltd on Tuesday said it has signed heads of terms to sell a quarter of its shareholding in a Welsh power project to infrastructure fund manager Equitix Ltd.
Shares in power project owner and operator SIMEC Atlantis were up 19% at 17.17 pence on Tuesday.
SIMEC Atlantis agreed to sell a 25% interest in the 220 megawatt Uskmouth Conversion Project in Newport, Wales for GBP32.9 million in cash.
The deal implies a GBP131.5 million equity value for SIMEC Atlantis's current 100% shareholding in the plant, which is being converted from a coal plant to one that runs on energy pellets made of non-recyclable waste.
In addition to the GBP32.9 million, Equitix also will pay 25% of the remaining budgeted development costs of Uskmouth Power required to secure third-party debt financing. It also will pay a further 25% of the conversion costs that expected to be funded by shareholders.
The conversion from coal to energy pellets is expected to take 18 months, in addition to the time needed to complete front-end engineering and design.
Equitix must complete its due diligence on Uskmouth Power and agree transaction documentation in order for the sale to go ahead. Final approval will also be needed from the Equitix investment committee - which is expected to complete in the first half of 2019.
"Equitix is one of the most sophisticated and experienced investors in the waste to energy sector in the UK. They will bring expertise in financing, [engineering, procurement and construction] contracting and negotiation, waste contracting and offtake negotiation to this world leading project," said SIMEC Atlantis Chief Executive Tim Cornelius.
Related Shares:
SIMEC Atlantis Energy