Ncondezi subsidiary offloads Mozambique asset to focus on core project

Ncondezi Energy announced on Friday that its wholly-owned subsidiary Ncondezi Green Power has entered into a sale and purchase agreement with Green Energy SPV, selling group company Mozambique Green Power (MGP) for $1.3m.

The AIM-traded firm said MGP owns the group's maiden 400kWP solar and 912 kWh battery storage project in Mozambique.

It said the acquisition price of$1.3m was paid in cash on completion, with Green Energy being a newly-formed company controlled by Ncondezi Energy non-executive director Scott Fletcher.

The proceeds would be used to repay the bridge loan which, as it announced on 15 October, was falling due on 7 December, with the remaining $0.65m to be used for general working capital purposes.

“Following the strategic review we launched in June and in an increasingly challenging post COP26 environment, selling the commercial and industrial subsidiary allows the company to fully focus on progressing its main Ncondezi Project with our strategic partner, China Machinery Engineering Corporation, and we are working on finalising the tariff as soon as possible,” said non-executive director Aman Sachdeva.

“Following completion of the strategic review process, Green Energy's offer provides a premium valuation with an easy to execute structure.

“It also provides a non dilutive solution which ensures the bridge loan will be repaid on time, and provides additional working capital to the company as it focuses on the Ncondezi Project.”

Sachdeva said the commissioning of the maiden project demonstrated the company's ability to deliver a power project in Mozambique, using new technologies in the midst of a global pandemic.

“It strengthened both our knowledge base and skill sets in ways which we are confident will benefit the Ncondezi Project going forwards.

“In the meantime, progress continues to be made on the Ncondezi Project with all key parties.”

At 1227 GMT, shares in Ncondezi Energy were down 4.94% at 1.12p.