LONDON (Alliance News) - Ncondezi Energy Ltd Thursday said it hopes to secure its partner for its flagship project in the third quarter of this year, but said it will have to raise funds soon to ensure it is adequately funded before the agreement is signed.
The emerging power development company operating in Mozambique said its pretax loss amounted to USD2.1 million in 2015, significantly narrower than the USD37.7 million loss recorded last year after a USD31.8 million impairment booked in 2014 did not repeat itself.
Administrative costs also halved to USD2.7 million from USD5.6 million, share-based payments fell and Ncondezi also booked a USD656,000 gain from reversing an accrual.
The focus is on its power project which it is developing with partner Shanghai Electric Power Co Ltd after the pair signed a joint development agreement in January this year. Until early 2018, the pair will be conducting due diligence and negotiate terms.
Once finalised, Shaghai Electric will contribute USD25.5 million to development costs and take a 60% stake in the project but all of its debt. The partner will also provide engineering, procurement and construction and operations and maintenance work streams.
"The company continues to target completion of the joint development agreement conditions precedent during the third quarter and will provide further updates as appropriate," said Ncondezi.
"The directors are exploring a number of funding solutions and expect to be in a strong position to raise additional capital once the [Shanghai deal] is effective. The directors believe that once the [deal] is effective the necessary funds to provide adequate financing to continue both the power plant and mine development programmes and fund working capital will be raised in due cause (sic) as required," the company added.
Ncondezi shares were up 2.1% to 3.70 pence per share on Thursday afternoon.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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