Shares in REACT Energy PLC (LON:REAC) shot up over 21% in early deals as the group inked a potential £11.2mln financing deal to fire up its 4MW Newry biomass project in Northern Ireland once more.
The project is a joint venture owned by Farmer Business Development plc (Farmers), which owns 23.2% of REACT and Newry Biomass Ltd (NBL), which is a 50.01% subsidiary.
The project was granted planning permission in May 2009 as a waste-to-energy plant. Some 25,000 tonnes of wood would be processed to generate that power, according to estimates then.
The heads of agreement envisages a total investment of up to £11.2 million to be made both directly, and indirectly through REACT, into NBL, through a combination of debt and equity.
If it is concluded, the equity component will be provided by a sub fund of The Ethika Fund SICAV Plc - a Professional Investor Fund and Kyotherm SAS a France-based equity investor in biomass, geothermal energy and energy savings projects.
Under the terms of the Heads of Agreement, Ethika is also to procure the debt finance for the repowering.
Shares in REACT fired up 21.3% to stand at 4.25p.