EQTEC PLC (AIM:EQT), the waste-to-energy specialist, has announced a major financial restructuring plan. This move is designed to steer the company towards growth based on its revenue and to enhance the execution of its business strategy.
The restructuring involves a significant overhaul of EQTEC's debts. The company will refinance or pay off its existing debts with several lenders. This includes dealing with debts held by Altair Group Investment Limited, YA II PN Ltd, Riverfort Global Opportunities PCC Limited, and Pitcole Limited.
In a strategic move to strengthen its financial position, EQTEC is also cutting down on its operational expenses. The company has already taken steps to reduce costs by minimising the use of external services and advisors, as well as cutting down on director and staff expenses. These measures are expected to save the company over £1.5 million annually from the start of 2023.
EQTEC is actively working to recover around £5 million in outstanding payments owed to the company. This includes a significant amount from Logik Developments, as previously announced.
The company has secured new financing of up to £3 million from its Refinance Investors, with an immediate advance of £950,000. This new funding is a crucial part of EQTEC's financial restructuring.
As part of the debt settlement, EQTEC will issue shares to clear a £900,000 debt with Altair, and the company's subsidiary, EQTEC Holdings Limited, will acquire all of Pitcole's participation in Italia MDC. This transaction will increase EQTEC's ownership in Italia MDC from 38.3% to 49.0%.
Additionally, a £10 million debt facility with the YA-RF Lenders will be replaced by a new secured loan of the same amount. This new loan arrangement includes a six-month repayment holiday, followed by 24 monthly instalments.
In other news, EQTEC is progressing with its Gardanne project, aiming to transform the former Gardanne power station into a facility for renewable natural gas production using EQTEC's advanced technology. The company expects to start preliminary work on this project soon with the work worth €186,000 with the promise of another potential €900,000 at the next stage of development.
In the same announcement, EQTEC has confirmed the resignation of its executive director and CFO, Nauman Babar, effective from 17 November 2023. The company is in the process of appointing a new CFO and has expanded its finance team in the interim. Additionally, EQTEC has appointed Global Investment Strategy UK Ltd and Fortified Securities as joint brokers.
The company is planning an extraordinary general meeting on 18 December 2023 to seek shareholder approval for issuing new shares and implementing a share capital reorganisation.