Last checked at 20 Mar 2015 07:00
20 March 2015
REACT Energy plc
("REACT" or the "Company")
Issue of unsecured loan notes in Newry Biomass Limited
REACT Energy plc (AIM: REAC), the energy infrastructure developer and operator which focuses on the production of clean energy in the UK and Ireland today announces that Newry Biomass Limited ("NBL") the joint venture company equally owned by REACT and its major shareholder Farmer Business Developments plc ("Farmers") has approved the issue of £5,702,523 of loan notes ("LNs") to Farmers. The proceeds from the issue of the LNs will be used to repay in full borrowings owed by NBL to Ulster Bank Limited amounting to £5,425,000.
The issued LNs are interest free and are redeemable on 1 November 2026. As part of the joint venture agreement between REACT and Farmers, while both parties have a 50 per cent equity interest in NBL, the right to share in profits generated by NBL are calculated by reference to how much capital each partner contributes to the project. Following the issue of the LNs, Farmers are now entitled to 51 per cent. (increased from 8 per cent.) of the economic benefits deriving from the project and REACT is now entitled to 49 per cent. (reduced from 92 per cent.) of the economic benefits. NBL owns the 4MW Biomass advanced gasification project located in Newry, Co. Down, Northern Ireland. The project is currently on 'care and maintenance' pending additional funding required to engage a new technology provider. The Directors believe that the repayment of the Ulster Bank borrowings (which included a first charge on NBL's assets) will significantly improve the ability of REACT and Farmers to source the 3rd party funding required to re-power the Newry Biomass project.
Farmers is a substantial shareholder in REACT (as defined in the AIM Rules) and as such the issue of the LNs is a related party transaction for the purposes of Rule 13 of the AIM Rules. The Independent Directors (being the directors other than Dermot O'Connell), having consulted with Shore Capital and Corporate Limited (the Company's nominated adviser), consider that the terms of the LNs are fair and reasonable insofar as shareholders of REACT are concerned.
Funding discussions
Further to the announcements on 1 December 2014 and 13 January 2015, REACT continues discussions with potential providers of finance to enable the lifting of the suspension of trading in the Company's shares.
- Ends -
For further information:
REACT Energy plc | +353 (0)21 2409 056 |
Gerry Madden/Brendan Halpin | |
Shore Capital - Nomad & Broker | +44 (0)20 7408 4090 |
Pascal Keane / Anita Ghanekar | |
Yellow Jersey PR Limited - Public Relations | +44 (0)7747 788 221 |
Dominic Barretto / Anna Legge |
About REACT
REACT Energy plc is committed to operating clean electricity and heat generation plants in the UK and Ireland.
The Company identifies, builds owns and operates plants and possesses significant knowledge of energy markets, clean technologies, fuel sources, project development, project finance and project delivery.
REACT currently has four operational clean energy plants generating revenue from the sale of electricity and heat.
The generation of clean electricity and heat from sustainable sources has the potential to address the key energy challenges of energy security and carbon commitment and provide strong returns on capital employed.
The company is listed on AIM and trades as REAC.www.reactenergyplc.com