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Simec Atlantis asks for more time on debenture repayment

The MeyGen tidal power project in the Pentland Firth
The MeyGen tidal power project in the Pentland Firth

Tidal energy developer Simec Atlantis Energy (SAE) has entered discussions with crowd-funding platform Abundance Investment, requesting more time to repay debentures due at the end of June.

The debt was issued by SAE – then Atlantis Ocean Energy – in 2017, and the principal of £4.95 million is currently due for repayment on 30 June 2022.

Nearly 1,300 investors backed the issue, with interest fixed at 8% per year over five years.

It was the company’s first debt issue via the Abundance platform and proceeds gave SAE capital to develop the technology for its tidal energy developments, including its flagship MeyGen project off Scotland’s northern coast.

Crucially, a debenture is a type of unsecured debt backed only by the creditworthiness and reputation of the issuer.

In a letter to holders today, Edinburgh-headquartered SAE said it had been making “steady progress” on its tidal energy projects – including MeyGen, where it is redeploying turbines following maintenance – and that expects these projects “to deliver a significant income stream” to the company.

It added: “It has become clear, however, that as a result of delays to these projects, we will need more time to repay the Atlantis Ocean Energy debentures.”

SAE said it would write a further letter to formally request an extension to its repayment date “and potentially a short deferral of the upcoming interest payment.”

“We intend to repay the debentures in full and to continue to pay interest until repayment, but we are requesting this extension in order to give us time to realise value from our projects,” the company added.

SAE said it would provide a further update as discussions progress.

Shares in the company fell around 9% on the news on Wednesday morning.

The debt discussions prolong SAE’s strife, following a series of woes last year relating to the control of shares held by major shareholder GFG Alliance and poor financial performance as a result of outages at MeyGen.

However early April brought news that the company had secured a £2.5 million loan from Scottish Enterprise to support further turbine redeployment.

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