Ncondezi Energy Announces Annual Financial Report

Source: 6/27/2022, Location: Asia

Ncondezi Energy Limited ("Ncondezi") (NCCL) is pleased to announce its audited final results for the year ended 31 December 2021.

Operational Highlights:

Ncondezi Power Project

- US$21.0 million historical costs relating to the Ncondezi Project agreed "in principle" with China Machinery Engineering Corporation ("CMEC")

- Master Services Agreement ("MSA") signed with Synergy Consulting ("Synergy") to provide financial and transaction advisory services to the Group for the Project

- Engineering, Procurement and Construction ("EPC") power plant contract for the Project signed with CMEC at a virtual signing ceremony

- Updated Transmission Integration Study submitted for review and approval to Electricidade de Moçambique ("EDM")

C&I Solar PV and Battery Storage Projects

- Ncondezi Green Power ("NGP") and Captive Power Limited ("CPL") signed a binding Relationship Agreement, which superseded the Relationship Agreement with GridX announced on 6 May 2020 under which NGP has the right (but not the obligation) to fund a pipeline of C&I solar and battery storage projects in Mozambique; all rights and obligations under the GridX Relationship Agreement were suspended and GridX agreed to novate to CPL all commercial agreements in relation to the C&I Maiden Project and to release to CPL any rights in relation to 5 of the existing 6 projects in the pipeline

- Successful commissioning of the Company's C&I Maiden Project

- Mozambique Green Power ("MGP"), a subsidiary which owns the group's C&I Maiden Project, was sold for US$1.3 million to Green Energy SPV PLC ("Green Energy") in December 2021

Financial Highlights

- US$500,000 bridge loan ("Bridge Loan") between the Company's wholly owned renewables subsidiary, NGP and certain Company Directors to finance the balance of construction costs to commission the C&I Maiden Project. The full amount had been drawn down as of 28 September 2021 and was repaid in full following completion of the sale of MGP in December 2021.

- CEO, Hanno Pengilly subscribed for 1,243,646 at 3p per Ordinary Shares in lieu of deferred salary between April 2020 and November 2020 and 1,996,755 at 4.5p per Ordinary Shares in lieu of contractual bonuses due on the achievement of various milestones in 2019 and 2020

- 754,860 Ordinary Shares were issued at 3p to certain employees, contractors and consultants in relation to outstanding deferred salaries and fees accruing between April 2020 and November 2020

- Employees Benefit Trusts 1 & 2 were terminated as part of the Company's measures to conserve funds. Accordingly, the 2,869,840 Ordinary Shares that remained in the EBT were transferred to the Company and are held in treasury by the Company as at year end

- Successful fundraising to finance general working capital completed in August 2021 raising £600,000 at 1.5p per Ordinary Shares

- Cash at bank US$0.9 million as at 31 December 2021

Post balance sheet events

Ncondezi Power Project

- CMEC confirms ongoing commitment to the Project in January 2022 and continues to lead the process to unlock project financing

- Tariff negotiations awaiting further clarity on Project financing from Chinese Government following announced policy not to fund new coal power projects abroad

Grid Scale Solar Project

- Internal review and preliminary studies identify potential for a grid scale solar plus battery storage power project at the Ncondezi Project site (the "Solar Project") without compromising delivery of the main Ncondezi Project

- Company is finalising development plans and permissions to commission feasibility study work for a grid scale solar project

Working Capital

- Seritza Limited ("Seritza") confirmed it would extend the period in which it would not call in the working capital facility term loan ("Working Capital Facility") to 30 June 2022, whilst restructuring discussions are still being finalised (the "Seritza Restructuring")

- Cash conservation strategy implemented potentially extending working capital runway from August 2022 to Q1 2023, depending on the Seritza Restructuring outcome. Based on management projections the Group is funded into August 2022 with potential to extend into Q1 2023 depending on loan restructuring negotiations with Seritza


- Non-executive Director Scott Fletcher purchased an aggregate of 5,000,000 ordinary shares of no par value increasing his holding to 81,823,020 Ordinary Shares, representing 19.9 per cent. of the Company's issued share capital.

The Company will post its Annual Report and Accounts for the year ended 31 December 2021 ("2021 Annual Report and Accounts") to shareholders on 27 June 2022. A copy of the 2021 Annual Report and Accounts will be available on the Company's website

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