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(Alliance News) - SIMEC Atlantis Energy Ltd on Friday said it has inked a GBP170 million debt financing agreement with Hana Financial Investment Co Ltd to fund the first phase of the Uskmouth conversion project.
Shares in SIMEC were up 46% at 26.00 pence in London in late morning trade.
The exclusive debt financing agreement was signed with South Korean financial institution Hana and would involve a senior unsecured loan to SIMEC Uskmouth Power.
If agreed, the facility would provide as much as GBP170 million towards capital and development expenditure for Uksmouth, as well as for operating costs, fees and interest. Hana will also provide and equity bridge loan throughout the construction phase.
SIMEC Uksmouth Power and Hana will work to refine the financing package for the remaining period to financial close. The agreement is not legally binding, with the exception of a six-month exclusivity period which can be extended.
Full form loan documents are intended to replace the framework agreement before financial close. The agreement is also subject to conditions such as Hana completing due diligence on Uksmouth.
SIMEC Atlantis Energy Chief Executive Tim Cornelius said: "We are delighted to enter into this agreement with Hana and are looking forward to working closely with them to achieve financial close on our flagship project. Hana is a market leader and not only one of the largest financial groups in Korea but a global investor and one we are proud to work alongside.
"This agreement with Hana reflects the high level of international interest our world-leading conversion project has and we believe that this is a stepping stone to further conversion opportunities across Asia and indeed globally."
By Anna Farley; annafarley@alliancenews.com
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