Carnegie CEO departs, asset sales to be renegotiated

01/10/2018 - 06:00

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Carnegie Clean Energy’s long-serving managing director Michael Ottaviano has resigned, with the company also announcing major updates on three projects and plans to renegotiate its asset sale deal with Tag Pacific.

Carnegie CEO departs, asset sales to be renegotiated
Michael Ottaviano has resigned.

Carnegie Clean Energy’s long-serving managing director Michael Ottaviano has resigned, with the company also announcing major updates on three projects and plans to renegotiate its asset sale deal with Tag Pacific.

Mr Ottaviano will be replaced as chief executive by Jonathan Fievez, who has been chief technology officer for seven years.

The company said on Friday the planned sale of its Energy Made Clean business to ASX-listed Tag Pacific may be terminated if it is unable to negotiate a revised deal.

The two companies said they have agreed to defer the completion date by one month to 30 November and remove the cash component from the sale consideration previously payable by Carnegie.

The cash payment was tied to the net assets of EMC and other factors and was estimated by Tag to be $2.2 million, according to its notice of meeting.

They must now renegotiate the consideration payable under the share purchase agreement by Carnegie, which has suffered sharp falls in its share price in recent weeks.

Separately, Carnegie’s major co-owner in the Northam solar farm, Indigenous Business Australia, has agreed to lift its stake in the project by paying $2.5 million.

However the two companies are yet to agree on how much equity IBA will acquire; that is dependent on an independent valuation.

Carnegie also disclosed Friday it has received confirmation from the WA government of approval of a $2.6 million milestone payment on the Albany wave energy project.

The company had been due to get $5.2 million in July but has failed to deliver key procurement targets.

It said the project is being impacted by uncertainty associated with proposed changes to the federal government’s R&D tax incentive scheme.

A third project update related to the Garden Island microgrid, where Carnegie has installed a two megawatt solar farm and battery system.

It has completed construction and pre-commissioning but experienced delays in testing.

This was attributed to the impact of parallel infrastructure upgrades at HMAS Stirling.

Carnegie’s shares closed 0.1 cents lower on Friday at 0.9 cents.

Whe the Tag Pacific deal was announced on 28 June, Carnegie's shares were trading at 2.7 cents but fell 18 per cent that day and have fallen ever since.

 

 

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