D9 Announces Binding Agreement for $42 Million Divestment of EMIC-1 Project

2 min read | December 31, 2024 07:49 PM AEDT | By Team Kalkine Media

Google News:

D9 Announces Binding Agreement for $42 Million Divestment of EMIC-1 Project — Image source: Shutterstock

Recent News

What’s Driving Interest in These Best ASX Penny Stocks?

5 Best ASX Dividend Shares Worth Watching This Month?

3 Best ASX Dividend Stocks Supported by Strong Margins

Electro Optic Systems (ASX:EOS): Are Defence Wins Fueling a Bigger Gro...

Make Kalkine Media
My Trusted Source

Highlights

D9 enters a binding agreement to divest its interests in the EMIC-1 Project for $42 million, with completion expected by March 2025.

The transaction releases the Group from $10 million in additional construction commitments and addresses ongoing impacts from regional conflicts.

Proceeds from the sale will help reduce D9's £53 million Revolving Credit Facility, with further sales initiatives underway.

D9 (LSE:DGI9) has announced a significant step in its strategic portfolio reshaping with the divestment of its interests in the EMIC-1 Project. The binding agreement, valued at $42 million after transaction costs, marks a decisive move in the company’s ongoing efforts to streamline its operations and strengthen its balance sheet. The completion of the deal is expected by March 2025.

Divestment Details
The divestment agreement reflects a 15% discount (approximately 0.7p per share) to the latest valuation of the Project, which was $49.6 million as of June 30, 2024. The EMIC-1 Project has faced significant delays due to ongoing regional conflicts in the Red Sea area, which have indefinitely postponed its final construction completion. The sale also removes the Group’s obligation to $10 million in additional construction commitments related to the project.

Transaction costs include substantial fees connected to the upcoming sale of the Company’s subsea cable assets, AquaComms, which was committed at the start of the sales process in early 2024. These fees will be due upon completion of the AquaComms sale.

Debt Reduction and Ongoing Initiatives
The proceeds from the EMIC-1 divestment will be used to further deleverage D9’s balance sheet, particularly by reducing the £53 million Revolving Credit Facility (RCF). The company is also in discussions with its RCF lenders regarding extending the remaining balance of the RCF beyond its current maturity date of March 31, 2025. Additional sale initiatives are progressing in parallel, with the expectation that the remaining balance of the RCF will be repaid through these efforts.

AquaComms Sale and Broader Portfolio Strategy
D9 is in advanced talks regarding the sale of its remaining subsea cable business, AquaComms, and expects to report on developments in due course. A valuation process for the company’s broader investment portfolio for the year ending December 31, 2024, is currently underway.

InfraRed and the Board of D9 are also preparing for further engagement with shareholders, including a roadshow scheduled for early 2025 to discuss progress and future strategies.

Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.