LONDON (Alliance News) - REACT Energy PLC shares dropped on Wednesday after the company said it will be able to use some of the funds under its existing loan facility as working capital after striking an agreement with its lender.
REACT shares were trading down 24% to 2.10 pence per share on Wednesday morning.
REACT secured a EUR750,000 loan facility from EBIOSS Energy AD back in January, and the proceeds were earmarked to fund development costs of the company's biomass gasification projects in the UK.
The company has drawn down EUR250,000 of that facility so far, but has struck a deal to allow the second EUR250,000 tranche to be used for working capital as well as for project development costs, at the sole discretion of the company.
REACT said it has drawn down EUR150,000 of that second tranche, which will be used for working capital, leaving EUR350,000 left to be drawn down from the facility. Importantly, the other EUR100,000 of the second tranche can be used for whatever purpose, but the other EUR250,000 must be used for development costs.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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