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Ncondezi raises £950,000 to strengthen balance sheet
AIM-quoted power development company Ncondezi has raised £950,000 before expenses to strengthen its balance sheet as it moves to wrap up a binding joint development agreement over its integrated 300-megawatt power and coal mine project in Mozambique.
Ncondezi's conditional placing of 15,200,000 ordinary shares at 6.25p, arranged by broker Novum Securities, was at a discount of roughly 16% to the firm's closing price of 7.45p on Thursday, with admission of the shares expected to take place before 18 May.
The funds raised by the placing, together with Ncondezi's existing cash resources of $280,000, are expected to cover the non-project corporate costs through to June next year, subject to its shareholder loan being extended or restructured. Directors are mulling over wether to extend or restructure the loan, which expires on 2 September.
On Thursday, Ncondezi updated its integrated financial model for the project with proposals for engineering, procurement, and construction and operations and maintenance contracts after an initial review indicated that there was the potential to deliver a "more competitive power tariff" to Electricity de Mozambique and the Ministry of Mineral Resources and Energy for approval.
The financial model was still under review by potential partners.
Ncondezi's project consists of two 150 megawatt coal-fired power plants, an open pit coal mine and, in addition to a 92km transmission line connecting into the Mozambican northern power grid, a 2km conveyor connecting to the power plant together with common infrastructures such as water dams, dumps, electrical reticulation and villages.
As of 0850 BST, Ncondezi shares had tumbled 14.44% to 6.37p.