LONDON (ShareCast) - (Sharecast News) - Sustainable energy company Simec Atlantis Energy announced on Friday that it has entered into an exclusive debt financing agreement with South Korean financial institution Hana Financial Investment (HFI) to work together to fund 100% of the 110MW first phase of the Uskmouth conversion project, through a senior secured loan to SIMEC Uskmouth Power (SUP).
The AIM-traded firm said the facility, if agreed, would provide up to £170m towards capital and development expenditure, operating costs, fees and interest.

It would also provide an equity bridge loan, throughout the construction phase.

HFI and SUP would continue to work to refine the financing package over the remaining period to financial close, the board explained.

The company said the agreement was not legally binding, save as to a six month period of exclusivity, which could be further extended by mutual agreement and is subject to borrower rights of termination including ongoing assurances regarding the ability of both parties to deliver against the terms.

It explained that the framework agreement was intended to be replaced by full form loan documents prior to financial close.

The agreement was subject to a number of conditions precedent, including HFI completing its due diligence on the Uskmouth Power conversion project, and agreeing satisfactory transaction documentation.

"We are delighted to enter into this agreement with Hana and are looking forward to working closely with them to achieve financial close on our flagship project," said chief executive officer Tim Cornelius.

"Hana is a market leader and not only one of the largest financial groups in Korea but a global investor and one we are proud to work alongside.

"This agreement with Hana reflects the high level of international interest our world-leading conversion project has and we believe that this is a stepping stone to further conversion opportunities across Asia and indeed globally."

At 1550 BST, shares in Simec Atlantis Energy were up 47.72% at 26.22p.

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