August 18, 2023 By Anaergia
Anaergia Inc. has entered into inter-related agreements with entities managed by Arjun Infrastructure Partners to immediately terminate its obligations relating to approximately $145 million in loan obligations owing to Arjun, including with respect to a lender option to require purchase by the company of associated loans for the six build-own-operate assets in Italy under conditions that include the failure to secure senior debt financing for particular projects by a certain date, in exchange for the sale of approximately $55 million in inter-company loans and the equity interests in a subsidiary of Anaergia that owns the projects to Arjun. As a result of the transaction Anaergia will receive de minimis cash consideration.
“As part of the company’s strategic review, it was determined that the best path forward was a consensual deal and arrangement with Arjun to help ensure the projects reach commercial operations in a timely manner. The Transaction reduces our capital requirements and immediately helps improve liquidity for the Company,” said Brett Hodson, chief executive officer of Anaergia. “We look forward to assisting Arjun and the project teams to complete construction and further advance other business development opportunities in Italy.”
The company has determined, as part of its previously announced strategic review, and consultation with professional advisors, that certain projects have immediate requirements of additional capital to reach operations beyond amounts available to the company under current lending facilities. As previously disclosed, the company did not have the ability to purchase the associated loans in the event the lender option was duly exercised by Arjun.
As a result of the transaction, Arjun has acquired full ownership and control of the projects which will provide it with the opportunity to fund the additional capital required for each project to reach commercial operations. Accordingly, the company has no further requirements to provide additional capital in respect of the projects.
The company and Arjun have also entered into a co-operation agreement to manage post-closing activities including, but not limited to, the company’s continued participation in providing remaining EPC work on the projects, certain transition services, and the opportunity for the company to receive additional consideration through performance incentives and an earn-out on terms to be negotiated in good faith.
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