(Sharecast News) - Simec Atlantis Energy confirmed the receipt of the first £5m milestone payment under its agreement with EL Uskmouth, a subsidiary of FPC Electric Land, on Thursday.
The AIM-traded firm said the achievement stemmed from the agreement made on 5 December, under which it agreed to sell freehold land to EL for a milestone-linked total gross cash consideration of £9.8m.
It said the land sold to EL was designated for use by Quinbrook Infrastructure Partners for its 230 MW BESS at SAE's Uskmouth Sustainable Energy Park.
With the milestone reached and the payment of £5m to SAE, EL now assumed ownership of the land.
The board said completion of the milestone required significant mobilisation efforts for the main construction phase of the Quinbrook BESS, including the import of 30,000 tonnes of aggregate via rail from a local quarry to start laying the foundation for the project and raising the levels on site.
SAE said the remaining balance of £4.8m payable under the EL agreement would be disbursed on the achievement of three further milestones, expected over the next 12 months.
While the freehold land used by the Quinbrook BESS represented a fraction of the land owned by SAE at the Uskmouth site earmarked for BESS project development, the board said the milestone payment underscored the value of the Uskmouth site for such projects.
SAE said it was actively developing over 1 GW of additional BESS projects at the Uskmouth site, which, on realisation, could substantially benefit the company and its shareholders through development premiums, income from land leases, and continued ownership.
"This is another milestone hit and demonstrates how we secure value for our business and shareholders," said chief executive officer Graham Reid.
"We have the knowledge, skills and a fantastic site to deliver an exciting pipeline of projects that are expected to provide revenue for the business and increased value for our shareholders in the long term.
"This experience and knowledge can also provide a platform for future growth, and it's a truly exciting time at SAE."
At 1443 GMT, shares in Simec Atlantis Energy were up 32.28% at 1.05p.
Reporting by Josh White for Sharecast.com.
Simec Atlantis (SAE)