TIDMEQT
RNS Number : 1139N
EQTEC PLC
20 September 2023
20 September 2023
EQTEC plc
("EQTEC", the "Company" or the "Group")
Legal claim against Logik Developments
and updated revenue forecast
EQTEC plc (AIM:EQT), a global technology innovator powering
distributed, decarbonised, new energy infrastructure through its
waste-to-value solutions for hydrogen, biofuels, and energy
generation notifies that, further to the Company's several
announcements pertaining to the Deeside project (the "Project")
between 08 December 2020 and 01 March 2023, the Company and its
wholly-owned subsidiaries EQTEC UK Services Limited and Deeside WTV
Limited ("Deeside WTV") (collectively, "the Group") have issued a
claim against Logik Developments Limited ("Logik Developments") and
its wholly-owned subsidiary Logik WTE Limited ("Logik WTE")
(collectively, "Logik") in the London Circuit Commercial Court of
the Business and Property Courts of England and Wales (the "Court")
(the "Claim"). The Claim has been made in connection with payments
made by the Group and due to the Group in relation to the Project,
and for breach of the share purchase agreement between Logik
Developments and Deeside WTV, originally executed on 07 December
2020 and amended several times since that date (the "SPA").
Claim against Logik
Specifically, the payments that the Claim relates to are:
(1) payments made by the Group to Logik, or payments made or
costs incurred by the Group on behalf of Logik in relation to the
satisfaction of certain conditions precedent under the SPA, or
otherwise in relation to the development of the Project; and
(2) payments made by Deeside WTV to Logik under the terms of the
SPA.
The total amounts claimed by the Group total c. GBP4
million.
The Company has, since January 2023, made numerous attempts to
engage Logik in constructive discussions toward resolution of these
matters, more recently extending several invitations through the
Company's legal counsel to seek to make clear the seriousness of
its contentions and to formally invite Logik to work them through
constructively. In response to every invitation, Logik either
rejected the offer or failed to follow through on its agreements to
meet with the Group.
As part of its considerable work in advancing the Project, the
Company has introduced to Logik a number of prospective investors
and buyers of Logik WTE, including a buyer that withdrew its
interest in November 2022 and more recently, a buyer with the
financial backing of a large, institutional investor. EQTEC
understands that this latter buyer has signed a binding term sheet
with Logik to acquire the Project site. The Company has been
informed multiple times by numerous Project stakeholders that Logik
has directly engaged with them without the involvement of the
Company and without the approval of the stakeholders.
Updated 2023 revenue forecast
Due to the matters set out above, the Company will no longer
benefit from the meaningful revenue which was expected to be
received from the Project in the current financial year.
In addition, French client Idex's France MDC project has
rescheduled the completion of front-end engineering design work to
December 2023, such that orders will not be placed for equipment
until early 2024 and delaying anticipated revenues from this
project. Furthermore, client projects in Belišće (Croatia), Livadia
(Greece) and Wilseyville (California, USA) are experiencing delays
with securing full funding, thus delaying revenues previously
expected in Q4 2023 into 2024, subject to securing such
funding.
As a result of these events, and in light of the Company's
publicly announced rationalisation of other, legacy projects with
unmitigated risks and liabilities, the Company has updated its
overall FY 2023 revenue forecast to EUR2 - 3 million.
The reduction in forecast revenue comes as the Company moves
away from high-risk development work with unconfirmed funding and
unqualified partners, toward well-qualified, pre-funded work owned
by top-tier developers or owner-operators. This shift is viewed by
the Board as essential to refocusing the Company on its core
capabilities of advanced process engineering and core technology
delivery, moving faster to deliver its technologies into a growing
number of higher-probability projects.
The Company will further outline its commitment to execution of
and progress with its strategic shift in its 2023 interim results,
due for publication by the end of September 2023.
David Palumbo, CEO of EQTEC, commented:
"We have consistently reiterated our dedication to the Deeside
Project and to Toyota, whose strategic ambitions for
carbon-neutrality have required timely progress by us and our
partners. It has been frustrating to have to direct our energies
this year toward resolution of issues with Logik, rather than
toward further progressing the Project. It is also disappointing to
find ourselves in a position where we are forced to take legal
action against one of our partners for attempting to go it alone
whilst ignoring our common commitments to the Project. The Company
has consistently supported the Project and our partners by amending
agreements to adapt to evolving commercial realities, and we have
made investment after investment to keep the Project moving
forward. This was in the interest of developing the site for Toyota
and for Flintshire with the goal of demonstrating EQTEC's advanced
syngas technology for an industrial client. Logik's unwillingness
since the start of the year to engage in discussions with us has
jeopardised the Project and leaves us with no choice now but to
protect the Company from bearing the cost of Logik's actions."
This announcement contains inside information as defined in
Article 7 of the EU Market Abuse Regulation No 596/2014, as it
forms part of United Kingdom domestic law by virtue of the European
Union (Withdrawal) Act 2018, as amended, and has been announced in
accordance with the Company's obligations under Article 17 of that
Regulation.
ENQUIRIES
EQTEC plc
David Palumbo / Nauman Babar +44 20 3883 7009
Strand Hanson - Nomad & Financial Adviser
James Harris / Richard Johnson +44 20 7409 3494
-------------------------------------
Panmure Gordon - Broker
John Prior / Hugh Rich +44 20 7886 2500
-------------------------------------
Instinctif - Media & investor relations enquiries EQTEC@instinctif.com
Guy Scarborough / Tim Field +44 791 717 8920 / +44 788 788 4794
-------------------------------------
About the Deeside project
The Deeside project (the "Project") comprises 6.27 hectares of
land off Weighbridge Road on Deeside Industrial Estate and adjacent
to the Toyota Deeside Engine Plant, in Flintshire, north Wales, UK,
on a site that was formerly a Gaz de France power station.
The prospective, multi-technology plant would include a material
recovery facility ("MRF") and anaerobic digestion ("AD") facility
that would deploy technologies from Anaergia, Inc. ("Anaergia"),
with an advanced thermal conversion ("ATC") facility that would
deploy EQTEC's syngas technology.
The MRF would process 182,000 tonnes per year of municipal solid
waste ("MSW"), separating recyclables and sending them off site for
processing, separating biogenic materials for processing at the AD
facility and producing refused-derived fuel ("RDF") from the
remaining materials, including plastics, for processing by the
EQTEC ATC facility. The 2.0 MW AD facility would produce 5.5
million NM3 per year of biomethane, with 17,000 MWh of the gas (c.
29%) exported to Toyota and the remainder exported to the national
grid. The 9.9 MW ATC facility would receive 77,000 tonnes per year
of RDF from the MRF and produce 77 - 87,000 MWh of electricity per
year, of which 27,000 MWh (c. 35%) would be exported to Toyota,
with the remainder exported to the national grid. There is
additional potential to apply the ATC facility to production of
hydrogen, for which initial feasibility work has been
undertaken.
About EQTEC plc
As one of the world's most experienced thermochemical conversion
technology and engineering companies, EQTEC delivers waste
management and new energy solutions through best-in-class
innovation and infrastructure engineering and value-added services
to owner-operators. EQTEC is one of only a few technology providers
directly addressing the challenge of replacing fossil fuels for
reliable, baseload energy. EQTEC's proven, proprietary and patented
technology is at the centre of clean energy projects, sourcing
local waste, championing local businesses, creating local jobs and
supporting the transition to localised, decentralised and resilient
energy systems.
EQTEC designs, specifies and delivers clean, syngas production
solutions in the USA, EU and UK, with highly efficient equipment
that is modular and scalable from 1MW to 30MW. EQTEC's versatile
solutions process 60 varieties of feedstock, including forestry
waste, agricultural waste, industrial waste and municipal waste,
all with no hazardous or toxic emissions. EQTEC's solutions produce
a pure, high-quality synthesis gas ("syngas") that can be used for
the widest range of applications, including the generation of
electricity and heat, production of renewable natural gas (through
methanation) or biofuels (through Fischer-Tropsch, gas-to-liquid
processing) and reforming of hydrogen.
EQTEC's technology integration capabilities enable the Group to
lead collaborative ecosystems of qualified partners and to build
sustainable waste reduction and green energy infrastructure around
the world.
The Company is quoted on the London Stock Exchange's AIM Market
(ticker: EQT) and the London Stock Exchange has awarded EQTEC the
Green Economy Mark, which recognises listed companies with 50% or
more of revenues from environmental/green solutions.
Further information on the Company can be found at www.eqtec.com
.
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END
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September 20, 2023 11:15 ET (15:15 GMT)
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