Formal Approval to Proceed Confirmed by SCIG
RNS Number :
Oracle Power PLC
9 March 2018
ORACLE POWER PLC
("Oracle" or the "Company" or the "Group")
Formal Approval to Proceed Confirmed by SCIG
Oracle Power PLC (AIM:ORCP), the UK energy developer of a combined lignite coal mine and mine mouth power plant located in Block VI of the Thar desert in the south-east of the Sindh Province of Pakistan (the "Project") is delighted to announce it has been advised that Sichuan Provincial Investment Group ("SCIG") has formally approved to proceed with the Project, subject to obtaining all necessary approvals and licences required by the Chinese and Pakistan Governments and satisfactory due diligence. This follows the signing of the Memorandum of Understanding ("MOU"), the details of which were announced on 21 November 2017.
SCIG and PowerChina International Group Limited ("PowerChina"), Oracle's Project development partners as outlined in the MOU, have conducted their preparatory work on the Project and have now agreed to proceed towards completion of due diligence, which the Company believes will be completed in early Q2 2018.
Key details of the Project:
· MOU signed by the Company with SCIG and PowerChina, together the "Parties";
· Gross project cost estimated at $1.6 billion;
· Proposed debt : equity ratio 75 : 25;
· Oracle to hold a minimum 12.1% equity.
· Oracle's historic development costs to be recognised as part of the Company's equity holding and contribution in the project;
· The Chinese partners to be exclusively responsible for arranging project financing.
As previously advised, the Parties have entered into a two-stage approach to develop the Project and this approval by the Board of SCIG is a key step forward as part of the first stage. On completion of the first stage, the next step will be to seek approval from the Chinese Government, after which a final development decision will be made to take the Project through to financial close. Given that the Project has priority status in the China Pakistan Economic Corridor, the Oracle board expects the approval by the Chinese Government to be in a timely fashion.
Shahrukh Khan, CEO of Oracle, said:
"I am delighted to announce the approval of the SCIG Board to proceed with the Project. Since signing the MOU in November 2017, all parties have worked hard to advance the Project. We now enter into an exciting new stage in Oracle's evolution.
"Oracle looks forward to updating shareholders in due course."
For further information please contact:
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Oracle Power PLC Shahrukh Khan
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+44 (0) 203 580 4314 |
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Brandon Hill Capital Limited Oliver Stansfield
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+44 (0)203 463 5000 |
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Peterhouse Corporate Finance Charles Goodfellow
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+44 (0) 207 220 9791 |
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Grant Thornton UK LLP Salmaan Khawaja, Richard Tonthat
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+44 (0) 207 383 5100 |
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Blytheweigh Tim Blythe, Camilla Horsfall, Megan Ray
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+44 (0) 207 138 3204 |
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Fortbridge Consulting Matt Beale, Bill Kemmery |
+44 (0)7966 389196 |
Notes for Editors:
About PowerChina:
PowerChina is a state-owned enterprise and is the owner of Sinohydro as well as the Hydrochina Corporation, China Renewable Energy Engineering Institute, Shandong Electric Power Company and numerous electric power design institutes and power construction companies. PowerChina provides planning, survey, design and engineering, finance, construction, installation, and operation and maintenance for power and infrastructure projects. In 2016, PowerChina had revenues of £36.8 billion, net assets of £62.2 billion and employed 187,000 staff. PowerChina has already successfully secured financial close on several CPEC (China-Pakistan Economic Corridor) listed projects and are proceeding with these power plant project constructions in Pakistan.
About SCIG:
SCIG is a Chinese state-owned investment company which invests in and manages projects in a range of sectors, including energy resources, transportation, communications, raw materials, electromechanical, agriculture and forestry. SCIG is China's fourth largest and Sichuan Province's largest local electrical power investment company, having a total install capacity of 36.04GW. In 2016, SCIG had revenues of £0.9 billion and net assets of £3.3 billion; it employs approximately 7,000 staff.
This information is provided by RNS
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