JVA potential !9 Dec 2023 15:48
Let’s don’t forget the potential of this JVA !
The key terms of the JV agreement comprise the following:
· Institutional Investor will inject all required investment capital into the JV with an initial expected total investment value of c. £5.9m, rising to potentially c. £31m upon completion of the Secondary JVA, (including repayment of MED past costs as detailed below), with no funding contribution required from MED.
· Institutional Investor holding 74.9% of the JV and MED holding 25.1%, with the Institutional Investor recognising and reimbursing to MED a portion of its actual historic project acquisition and development related costs (the 'Cost Refund'), as detailed below, and no requirement on MED to provide any further funding.
· MED have joint control of the JV SPV Board and full operational control of the relevant sites' management and operations.
· The JVA will initially consist of one project with a generation capacity of c. 9 MW that MED will provide to the JV, the Institutional Investor will then pay MED c. £3.4m in terms of the Cost Refund, and inject c. £2.5m into the JV SPV to cover future capex on this project. Following the binding JVA that has now been executed, exchange and completion is expected by 28 July 2023.
· The Secondary JVA, is expected to consist of up to four projects with a combined generation capacity of a minimum 17 MW and up to 24 MW that MED will provide to the JV, the Institutional Investor will then pay MED c. £3.8m in terms of the Cost Refund, and inject c. £21.3m into the JV SPV to cover future capex on these projects.
· The Institutional Investor will receive a preferential entitlement to 90% of the profit of the JV until the investment provided has been recovered in full, at which point any distribution of profits will return to the equity split.
· Therefore, it is envisaged that MED will receive a c. 25% stake in a portfolio of up to c. 33 MW of assets that are expected to be fully funded, constructed and revenue generating within the next 12 months.
· In addition, the JV have granted MED a five-year management services agreement ('MSA') and associated fee to manage the sites, which will further bolster MED's share of income from the JV, and calculated as £7,200 per MW per annum.
· It is MED's intention and plan to use the bulk of the Cost Refund from the JV investment tranches to further develop and acquire projects that will be used within the JV, as well as further bolster its own wholly owned portfolio of assets (outside of the JV), by way of further development, construction and new acquisitions.
If Proventure is not capable, bod have already identified an alternative option (according to the last RNS) to them. The interest from investors clearly indicate that it’s a good opportunity. In my view that’s the key thing here.
Let’s stay positive! We will have news on Monday and I am sure it’s going to be a positive one !
GLA
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