Delorean Corporation Ltd (ASX:DEL) says it has reached a successful endpoint with Tanarra Restructuring Partners in a deal announced last month for a 3-year corporate finance facility provided by the latter company, valued at up to $30 million.
On August 28, Delorean said it had executed a binding Term Sheet with Tanarra for the facility – which will be used to fund works on the SA1 bioenergy infrastructure project – with today’s announcement indicating that Tanarra has reached a Financial Investment Decision (FID).
Two agreements underpinning the facility – a Facility Agreement and Options Deed – have already been executed by the two parties, leaving only procedural legal documents to be completed as conditions required for Financial Close, with the latter on track to happen halfway through September.
With the facilities in hand, Delorean will be able to move ahead to construction of SA1, which is set to begin in the final quarter of 2024, once the Financial Close is confirmed.
The project – located in Salisbury, South Australia – will be Australia’s first project to create green gas to mains with the use of organic waste feedstocks.
In its initial stage, SA1 is expected to process up to 70,000 tonnes per annum of commercial/industrial waste streams from the Adelaide metropolitan area, and from this export 2000 Terajoules per annum of renewable gas (biomethane) into the gas network under a multi-year offtake with Origin.
The corporate facility itself is built around the deployment of two tranches: Facility A – comprising $5 million to be dedicated to working capital, including refinancing and redeeming Delorean’s existing convertible notes to settle the Company’s liability and discharge of associated securities.
This will be followed by a second Facility (B), worth $25 million, which will fund Delorean’s capital contributions to the SA1 project enabling this project to commence construction, subject to Delorean’s Final Investment Decision.
Additionally, this Facility can be redeployed (within the three-year term) into Delorean’s existing follow-on development projects, subject to refinancing the SA1 project post-construction around December 2025.
At 10:47 AEST, Delorean was trading at 11.5 cents – a rise of 4.55% since the market opened.
