TIDMSAE
RNS Number : 7699V
SIMEC Atlantis Energy Limited
05 December 2023
5 December 2023
SIMEC Atlantis Energy Limited
("SAE Renewables", "SAE", the "Company" and, together with its
subsidiaries, the "Group")
Freehold land sale at Uskmouth, proposed Abundance Bonds
extension and Business update
Sale of land to Electric Land
SAE is delighted to announce that it has today signed an
agreement with EL (Uskmouth) Limited a subsidiary of FPC Electric
Land Ltd for the sale ("Sale") of the freehold land owned by SAE
and currently leased by a portfolio company of Quinbrook
Infrastructure Partners who are constructing the first battery
energy storage system ("BESS") at Uskmouth Sustainable Energy Park
("USEP"), as announced by the Company on 24 May 2023. SAE will
receive a total cash consideration of GBP9.8 million from the Sale.
The consideration will be received in a series of milestone
payments, linked to the BESS construction progress, throughout 2024
and into 2025. SAE had previously notified its intention to
monetise the lease income on the land and the Sale is the
culmination of that process, allowing SAE to deliver against its
objectives. The Sale also validates SAE's valuation assumptions for
the BESS projects available at USEP. As the owner of significant
freehold land at USEP, SAE is able to deliver both project
development premiums and income from monetising the land leases on
future BESS projects.
As announced on 30 August 2022, SAE entered a revenue sharing
agreement with SIMEC UK Energy Holding Ltd ("SIMEC") for this first
BESS. To close this agreement out, SAE has agreed to pay SIMEC
GBP0.7 million of the received revenue from the GBP9.8 million for
the full settlement of this agreement.
Business Update
At the USEP, progress continues to be made on the additional
120MW BESS project, which re-uses the site of the cooling towers of
the former Uskmouth power station. The planning application for
this project has been submitted and a decision is expected in Q1
2024. SAE is working with another developer on a 249MW BESS project
and has secured additional grid capacity of 349MW. Furthermore, the
first BESS project has rights under agreements with SAE to expand
from 230MW to 349MW. This brings the total potential capacity at
USEP for BESS projects to over 1GW.
Additionally, SAE is developing a 200MW BESS utilising the
MeyGen grid connection. The BESS project will be located close to
the MeyGen tidal array's onshore substation and will operate
alongside the consented 86MW tidal stream project when built.
As well as the delivery of the BESS projects, SAE is making good
progress on the delivery of the world leading MeyGen tidal stream
project. The three operating turbines are working well following
their upgrades and SAE is on track to have the fourth deployed in
Q2 2024.
The delivery of the 50MW next phase of MeyGen continues to be a
priority for management. While the delivery of this project remains
hugely challenging, securing the revenue for 50MW of capacity is a
huge step forward. We are working with all stakeholders to continue
to move forward the delivery of this project and the future phases.
In this regard, we welcome the recently announced increase in the
Administrative Strike Price to GBP261/MWh for tidal stream projects
for the next auction round, which is due in 2024 and is expected to
provide opportunities for further expansion of the MeyGen
project.
Proposed Abundance Bonds extension
SAE is today issuing a communication (which may be viewed on the
Company's website at www.saerenewables.com/investor-relations ) to
the holders of the debentures issued in 2017 through Atlantis Ocean
Energy (the "AOE 2017 debentures"), the holders of debentures
issued in 2018 through Atlantis Future Energy (the "AFE 2018
debentures") and the holders of the debentures issued in 2019
through Atlantis Future Energy (the "AFE 2019 debentures"), with
the support of Abundance Investment Limited, requesting amendments
to the debenture deeds.
The requested changes will allow SAE to unlock significant
revenue opportunities through the delivery of multiple utility
scale BESS projects, along with further development of its tidal
business. SAE is confident that the income from these projects will
be sufficient to repay the debenture capital, (as more fully
detailed below) while still delivering on its business
objectives.
The full request to the debenture holders includes:
-- extend the AOE 2017 debentures maturity date from 30 June 2024 to 30 June 2029,
-- extend the AFE 2018 debentures maturity date from 31 March 2024 to 30 June 2029,
-- extend the AFE 2019 debentures maturity date from 30 September 2024 to 30 June 2029,
-- pay an enhanced interest rate for the extension period
applicable to the AFE 2019 debentures of 10% p.a.,
-- pay an enhanced interest rate for each of the three
debentures from 1 January 2027 to 31 December 2027 of 11% p.a.,
-- pay an enhanced interest rate for each of the three
debentures from 1 January 2028 to 31 December 2028 of 12% p.a.,
-- pay an enhanced interest rate for each of the three
debentures from 1 January 2029 to 30 June 2029 of 13% p.a.,
-- make an early capital repayment allocable across all three
debentures of GBP1,000,000 on the 31 December 2025,
-- make an early capital repayment allocable across all three
debentures of GBP2,000,000 on the 31 December 2026, and
-- make an early capital repayment allocable across all three
debentures of GBP3,000,000 on the 31 December 2027.
The requested amendments require the agreement of 75% of the
debenture holders by value. The results of the vote are expected
during December 2023.
SAE Renewables will provide a further update at that time.
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.
For further information, please contact:
SAE Renewables
Sean Parsons, Director of External
Affair +44 (0)7739 832 446
Strand Hanson Limited (Nominated
and Financial Adviser)
Richard Johnson
Rory Murphy
David Asquith +44 (0)20 7409 3494
Zeus Capital Limited (Broker)
Louisa Waddell
Simon Johnson +44 (0)20 3829 5000
Notes to Editors
SAE Renewables is a global developer, owner and operator of
sustainable energy projects. SAE owns the world's flagship tidal
stream project, MeyGen. SAE is also the owner of the Uskmouth Power
Station site that is being repurposed into a sustainable energy
park, initially housing one of the UK's largest battery energy
storage projects. https://www.saerenewables.com/
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END
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