EQTEC PLC encouraged by lender support and improved economics of UK

() chief executive David Palumbo says the re-profiling of the waste gasification-to-energy specialist’s debt adds to encouraging developments in recent months. 

On Monday the group agreed to push the maturity date of its two principal loans from Altair and Riverfort back by 12 months to the end of June 2021 at reduced interest rates.

“This is good for a number of reasons, including that it shows the company is perceived as an improved credit risk, is generally a positive outlook for the balance sheet and it’s good to know that the lenders are also invested in equity story for the company,” said Palumbo, who stepped up from commercial director to CEO last September. 

Since 2018 the debt to equity ratio has improved from 38% in 2018 to 30% now, he noted to Proactive.

He said payments due in the coming months will be made using cash resources that were bolstered by the second payment for the North Fork biomass project in California of €770,000 that was received last month, with other payments due in future.

“We have an undrawn facility of £1ml with Altair and they are a very supportive shareholder,” he told Proactive. We have options and we will keep being disciplined about the use of cash and choosing what is more beneficial for the company.” 

The new debt arrangements come on the back of a positive trading update last week, where Palumbo in particular highlighted developments with the Billingham waste-to-energy project in County Durham, where some 200,000 metric tons of municipal waste will be processed into energy each year for local grid operator Northern Powergrid.

“We received a full proposal for the grid connection and this has come a lot lower than originally expected,” Palumbo said. “This makes the project financing more interesting and all of that in turn creates a more appealing project.

“I think this is super-encouraging because it’s no secret to anyone that Billingham is a truly transformational project not only for EQTEC but also for UK waste elimination infrastructure in the whole of the UK. So, while there is still a lot of work to do, we are very encouraged.”

A technology warranty insurance policy submitted by a specialist underwriter in the space is helping generate further attention from potential project investors, Palumbo adds. 

With a financing decision on a first advanced gasification plant in Greece expected later this month for local partner Agrigas, and a pipeline of other projects with the same partner and third parties in that country, plus interest picking up in the US, Palumbo said he was “super encouraged” about the outlook.