Anaergia Inc. ("Anaergia" or the "Company") (TSX: ANRG) announced today (Aug 17) it has entered into inter-related agreements with entities managed by Arjun Infrastructure Partners ("Arjun") to immediately terminate its obligations relating to approximately $145 million in loan obligations owing to Arjun, including with respect to a lender option (the "Lender Option") to require purchase by the Company of associated loans for the six Build-Own-Operate assets in Italy (the "Projects") 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 (as previously written off by the Company) and the equity interests in a subsidiary of Anaergia that owns the Projects to Arjun (the "Transaction"). As a result of the Transaction Anaergia will receive de minimis cash consideration.
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 cooperation 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.
"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."
About Anaergia
Anaergia was created to eliminate a major source of greenhouse gases by cost effectively turning organic waste into renewable natural gas (RNG), fertilizer and water, using proprietary technologies. With a proven track record from delivering world-leading projects on four continents, Anaergia is uniquely positioned to provide end-to-end solutions for extracting organics from waste, implementing high efficiency anaerobic digestion, upgrading biogas, producing fertilizer and cleaning water. Our customers are in the municipal solid waste, municipal wastewater, agriculture, and food processing industries. In each of these markets Anaergia has built many successful plants including some of the largest in the world. Anaergia owns and operates some of the plants it builds, and it also operates plants that are owned by its customers.
About Arjun Infrastructure Partners
Arjun Infrastructure Partners is an independent asset management firm dedicated to identifying, executing and managing mid-market infrastructure investments. Founded in 2015, Arjun now manages over 5 billion of capital on behalf of prominent institutional investors.
Its team of now 32 professionals has extensive operational and financial experience in the utilities, energy, renewables, digital, social and transportation infrastructure sectors. Arjun offers a proven ability to source bilateral investment opportunities and has a strong focus on ESG as part of its long-term, responsible asset management approach.
Forward-Looking Information
This news release may contain forward-looking information within the meaning of applicable securities legislation, which reflects the Company's current expectations regarding future events, including the Company's shift to a capital-light business model, the Projects reaching commercial operations, the Company's continued involvement in respect of the Projects under the cooperation agreement with Arjun, including its ability to negotiate and/or receive additional consideration through performance incentives and an earn-out, and the Company's assessment that the Transaction will improve its liquidity. Forward-looking information is based on a number of assumptions (including the Company's ability to shift to a capital-light business model, Arjun's ability to fund the Project, the Company's ability to negotiate and/or receive additional consideration through performance incentives and an earn-out under the cooperation agreement with Arjun, and that the Transaction will improve the Company's liquidity), and is subject to a number of risks and uncertainties, many of which are beyond the Company's control, including its ability to continue as a going concern. Such risks and uncertainties include, but are not limited to, the factors discussed under "Risk Factors" in the Company's annual information form dated April 10, 2023 for the fiscal year ended December 31, 2022 and under "Risks and Uncertainties" in the Company's management discussion and analysis for the second quarter of 2023. Anaergia does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required under applicable securities laws.
For further information please see: www.anaergia.com
Contacts
For media relations please contact: Melissa Bailey, Director, Marketing & Corporate Communications, Melissa.Bailey@Anaergia.com
For investor relations please contact: IR@Anaergia.com
