Shares in Carnegie Corporation jumped after the wave power hopeful signed a $250 million project financing deal with banking giant Investec.
Shares in Carnegie Corporation jumped after the wave power hopeful signed a $250 million project financing deal with banking giant Investec.
Carnegie's shares were up four cents, or 19.51 per cent, at 24.5 cents at 1154 AEDT after reaching a high of 26 cents in earlier trade.
Perth-based Carnegie said Investec intended to provide up to $250 million to fund its Commercial Demonstration Wave Power project, using its CETO technology, in southern Australia.
The project will be developed by a special purpose company jointly owned by Carnegie, Investec and other investors, so the financing is non-dilutionary for Carnegie's shareholders.
The financing agreement is subject to certain milestones and conditions being met.
A final decision on the site for the project is expected mid this year.
The announcement is below:
Wave Energy Developer Carnegie Corporation Limited (ASX: CNM) and Investec Bank (Australia) Limited ("Investec"), the Australian subsidiary of the international specialist banking group, are pleased to announce they are entering into a Heads of Agreement ("HoA"), which sets out their mutual intention to work together to develop Carnegie's Commercial Demonstration Wave Power Project ("Project").
Subject to certain milestones and conditions being met, Investec intends to provide or procure funds of up to $250 million for the Project. It is intended that the Project be developed in a Special Purpose Company jointly owned by Carnegie, Investec and other investors, making the financing non-dilutionary for Carnegie Corporation Limited shareholders.
Carnegie Corporation's Managing Director, Dr Michael Ottaviano, said: "We are very pleased to be working with a specialist bank that has the track record of Investec. This is another positive step forward in the development of CETO and in the realisation of Carnegie's Commercial Demonstration Wave Power project."
Investec's Peter Mansfield said: "Investec looks forward to working with Carnegie to develop the Project, which is complementary to Investec's expertise in delivering innovation and value for money in renewable power. Carnegie is a market leader in the field of wave energy, having made considerable progress over recent years. Investec believes that Carnegie is well placed to deliver Australia's first wave energy project in the near future."
The Commercial Demonstration Project is the subject of a Federal Government funding application and, as such, details of the Project are commercial-in-confidence. The HoA is also conditional upon the successful outcome of this funding application. Carnegie continues to carry out feasibility studies at its portfolio of potential project sites across southern Australia and expects to be able to announce the site of the Commercial Demonstration Project in mid-2009.
Upon execution of formal contracts, Investec will secure the first right of refusal for three years to finance Carnegie's CETO projects that connect into the Australian National Electricity Market and in New Zealand. Carnegie will also immediately issue Investec 1,000,000 unlisted options over Carnegie Corporation shares with an exercise price of $0.31 per share. The HoA will remain "non-binding" until formal agreements are executed.
