SYDNEY: Genex Power Limited has signed a new Memorandum of Understanding (MOU) with Electric Power Development Co Ltd trading as J-POWER.
The MOU provides that the parties will work together using their best endeavours to negotiate a transaction for the Kidston Pumped Storage Hydro Project (K2-HydroorProject) for J-POWER to acquire direct or indirect equity in the Project by way of a subscription for new ordinary shares in Genex on terms equivalent or similar to the Share Subscription Agreement (SSA) signed between the parties and announced to the ASX on 6 June 2019; and/or a subscription for new equity securities directly in the Project Special Purpose Corporation (SPC).
It is a term of the MOU, that as part of J-POWER’s investment into Genex and/or the Project SPC (the J-POWER Equity Investment) J-POWER may enter into a Technical Services Agreement with Genex wherein J-POWER will provide certain professional technical advisory services to Genex in relation to the construction phase of K2-Hydro; and subject to the approval of the project financiers and project EPC contractor, enter into an agreement to provide O&M services to the Project SPC.
Genex will pursue the proposed new commercial arrangements in a timely manner, to facilitate the negotiation and structuring of the J-POWER Equity Investment in as short a timeframe as possible.
Notwithstanding this, this MOU shall terminate on the earlier of conclusion of negotiations concerning the J-POWER Equity Investment, culminating in the signing of long form documentation governing the J-POWER Equity Investment; or 31 December 2020.
In commenting on the execution of the MOU with J-POWER, James Harding, CEO of Genex said: “We are delighted that J-Power has shown faith in Genex and our K2-Hydro project with the execution of this MOU and to continue discussions along the lines of those originally announced in June this year. Genex strongly values the relationship that it has developed with the J-POWER team over the course of 2019 and we are excited that this will continue. We will work as quickly as we can to conclude arrangements with J-POWER as part of the restructuring of the K2-Hydro transaction with a view to reaching financial close for the project as soon as possible in 2020. Along with the decision by the NAIF Board to extend the offer of funding for K2-Hydroannounced last week, we are maintaining the momentum we had previously established into the new year.”