Oracle Power PLC Consortium Agreement (4839D)
19 Febbraio 2020 - 12:15PM
UK Regulatory
TIDMORCP
RNS Number : 4839D
Oracle Power PLC
19 February 2020
Oracle Power Plc / EPIC: ORCP / Market: AIM / Sector: Mining
19 February 2020
Oracle Power PLC
("Oracle", the "Company" or the "Group")
Consortium Agreement signed with China National Coal Development
Company Ltd. and His Highness Sheikh Ahmed Bin Dalmook Juma Al
Maktoum
Oracle Power PLC (AIM:ORCP) is pleased to announce that it has
signed a Consortium Agreement with its partners, China National
Coal Development Company Ltd. ("CNCDC") and Sheikh Ahmed Dalmook Al
Maktoum Private Office One Person Company LLC ("HH Private
Office"), the private office of His Highness Sheikh Ahmed Bin
Dalmook Juma Al Maktoum ("His Highness"), and , together with
Oracle, referred to as "the Parties".
This Consortium Agreement has been entered into following
significant due diligence, administrative and operational work
undertaken by Oracle on behalf of the Parties since entering into
the Joint Development Agreement (the "JDA"), as announced on 16
December 2019. This Consortium Agreement is a material development,
superceding the JDA, as it establishes the proposed project
shareholding structure as required under the Government of
Pakistan's 2010 Independent Power Production (IPP) policy
guidelines. The Company has now taken all necessary steps to
formally obtain a Letter of Intent ("LOI") from the Pakistani
Government as a result of the proposed shareholding structure. The
final equity interests of the Parties at financial close are
subject to definitive agreements being entered into in due
course.
Under the Consortium Agreement, the Parties intend to jointly
develop a combined lignite coal mine in Block VI (the "Project") of
the Thar desert in the south-east of Sindh Province, Pakistan, for
a 1,320MW (2x 660MW) mine mouth power plant and coal to gas and
liquid. The Board believes that the proposed development of Block
VI should produce sustainable and cheap energy for Pakistan, as
well as enable the use of coal for the production of gas (primarily
for use in the production of fertiliser) to meet the growing demand
for gas as Pakistan's gas reserves decline. In addition,
development of the Project would enable the opportunity for coal to
liquid production to counter the import of expensive fuel into
Pakistan.
Pursuant to the Consortium Agreement, it is intended that Oracle
will hold a 12% equity interest in the Project via local project
companies (anticipated to be the Company's subsidiaries Sindh
Carbon Energy Limited and Thar Electricity (Private) Limited).
CNCDC, being the main sponsor, is intended to hold 73%, with HH
Private Office intended to hold the remaining 15%. Accordingly, the
Consortium Agreement provides the necessary assurance to the
appropriate Pakistani authorities, under IPP policy guidelines, of
the Parties' proposed equity commitments and will allow Oracle to
proceed with obtaining an LOI for power production from the
Government of Pakistan.
With the Consortium Agreement in place, and the Parties now
focused on the issuance of the LOI and subsequent financial close
of the Project, Oracle's primary responsibility will be obtaining
all licences, approvals and permissions as required by the
Pakistani Government. Given the Project's inclusion on the Priority
List in the China Pakistan Economic Corridor ("CPEC") for both
power and oil and gas, CNCDC has confirmed, pursuant to the
Consortium Agreement, its intention to be responsible for sourcing
all debt for the Project from Chinese banks. The Consortium
Agreement is subject to the laws of Pakistan.
Ms. Naheed Memon, CEO of Oracle, said:
"I am delighted to confirm the formal signing of this Consortium
Agreement following two months of extensive work from all of the
Parties. Our partners in the Project comprise one of the largest
coal mining and development companies in the world and a prominent
member of the UAE Royal Family, who bring with them the financial
and technical wherewithal to bring a project of this stature and
size to fruition.
Today's development marks a major step for Oracle and enables us
to progress on our journey, with the LOI being the next major step,
in developing the Project and, we believe, demonstrates that the
Parties are united in their focus to make this Project a modern and
first-class mining development to build, own and operate 2x 660MW
(totalling 1,320MW) coal based power plant, with the potential for
coal to gas and liquid and coal production for trade, recognising
Pakistan's growing needs for power, gas and liquids from coal."
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
For further information:
Oracle Power PLC +44 (0) 203 580
Naheed Memon 4314
Strand Hanson Limited (Nominated Adviser) +44 (0) 20 7409
Rory Murphy, James Harris, Jack Botros 3494
Brandon Hill Capital Limited (Joint Broker) +44 (0) 203 463
Oliver Stansfield 5000
Shard Capital (Joint Broker)
Damon Heath
Isabella Pierre +44 (0) 20 7186
9952
St Brides Partners Limited (Financial
PR)
Susie Geliher
Catherine Leftley +44 (0) 20 7236
Hannah Platt 1177
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END
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