Today the UK-listed Irish subsidiary of EBIOSS Energy, EQTEC Plc (AIM: EQT) has announced that it has signed a non-binding agreement with the companies Inava Ingeniería de Análisis, S.L. And EBIOSS Energy, SE, current shareholders of EQTEC Iberia SL, for the acquisition of its share capital. The proposed operation, if completed, would be considered a “Reverse Takeover” (RTO) under rule 14 of the AIM rules, would require the publication of an Admission Document in the AIM and the approval by the shareholders of EQTEC Plc at a General Meeting. In addition, as EBIOSS Energy is the majority shareholder of EQTEC Plc, the proposed transaction would also represent a related party transaction under rule 13 of the AIM regulation. Therefore, and in accordance with rule 14 of the regulations of the AIM, the negotiation of the ordinary shares of EQTEC Plc have been suspended until the publication of said document. While EQTEC Plc will try to publish the Admission Document as soon as possible, it is not yet possible to predict exactly when it will be held until the conditions are finally defined between the parties. Currently, EBIOSS Energy SE owns 47.97% of EQTEC Iberia and 50.03% of EQTEC Plc. In case of consummation of the transaction, the following change in the structure of the Group would occur:
Last February, EQTEC Plc (formerly REACT Energy Plc) approved at the Extraordinary General Meeting the entry of EBIOSS Energy into the Company’s share capital, listed in the AIM of London, with a 51% majority interest. As it was then explained, the rational of acquisition and its goodness for EBIOSS had to do with the pipeline of projects that EQTEC Plc currently has, in addition to its strategic nature due to its positioning in the United Kingdom, where EBIOSS also contributed a series of Projects with which it is collaborating with China Energy. In March, EQTEC Plc carried out two capital increases of EUR 985,000, while EBIOSS simultaneously converted into shares the loan it held with EQTEC Plc for EUR 920,717. Following the listing of the new shares, EBIOSS Energy owns 50.03% of the total share capital of EQTEC Plc
Highlights of the proposed transaction
· EQTEC Plc proposes to acquire the entire share capital of EQTEC Iberia through an exchange of shares of EQTEC Plc at a price yet to be agreed upon.
· The composition of the Board of Directors of EQTEC Plc, would also include representatives of EBIOSS Energy and EQTEC, along with independent non-executive directors.
· The proposed transaction is conditioned, among other things, to due diligence, and EQTEC Plc’s acquisition of funds to provide working capital to finance Group projects.
· EBIOSS Energy and Inava have provided EQTEC Plc with exclusivity until October 4, 2017 to conclude the negotiations, due diligence of EQTEC Iberia and documentation related to the proposed transaction.
· EQTEC Plc, EBIOSS Energy and Inava have signed the essential clauses under which EQTEC Plc will acquire all of the issued share capital of EQTEC Iberia by issuing new common shares to EBIOSS Energy and Inava. The number of new shares to be issued is yet to be agreed, but it is expected to be equal to or greater than 556 million new shares, and this point is being negotiated.
Justification of the proposed operation
The combination of EQTEC Plc and EQTEC Iberia would create a leading company with patented gasification technology that is used in industrial-sized plants to convert waste into synthesis gas and generate electricity. The combination of the two companies would give the group a highly experienced management team in the energy market, the supply of waste and fuel sources, the development of engineering projects and renewable energies.
In this way EQTEC Plc would have the most advanced modular gasification technologies available in the market, offering a greater efficiency compared to other technologies of power generation. This increased efficiency would allow EQTEC Plc to offer more attractive rates than its competitors, providing a competitive advantage over them.
Accordingly, EQTEC Plc has also published the relevant Material Fact in the AIM, available at the following link available to the market:
If the transaction is carried out, EBIOSS Energy will promptly inform the Market.