Tag and Carnegie deal collapses after conditions failed to be met
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The sale of Carnegie Clean Energy’s solar and battery division to Tag Pacific is off, with both parties walking away from the deal after conditions failed to be met.
Carnegie (ASX:CCE) said one of the conditions for the sale of Energy Made Clean included Tag raising enough capital to fund the proposed joint venture, but the whole deal was terminated “as a result of a number of conditions not being able to be fulfilled by the end date of November 30”.
“In particular, the requirement for Tag to raise $4 million to fund the combined EMC-MPower business,” it said. “Carnegie will now explore other options for the EMC business including other M&A opportunities.”
Tag (ASX:TAG) chief Nathan Wise told Stockhead his company didn’t wish to extend the end date given the amount of time that had already passed.
Other conditions included Tag and Energy Made Clean renegotiating an existing joint venture with Lend Lease, and securing third party consent to swap in Tag in existing contracts.
Both companies’ shares were flat on the news, CCE at 0.7c and Tag at 6.9c.
The sale was first mooted in June, with Tag to pay $4.1 million for Energy Made Clean and giving Carnegie a 32 per cent shareholding in the expanded Tag.
But in September, Carnegie CEO Michael Ottaviano left the company, Jonathan Fievez took his place and the deal had to be re-negotiated.
By October, Tag was to buy Energy Made Clean in exchange for the issue of shares equal to a 17.5 per cent stake.
But now, it has been nixed altogether.
“We continue on our journey to be a leader in renewable energy, battery storage and microgrids,” Mr Wise told Stockhead. “We’ve just had approval to change our name to MPower Group as well as launching a $3.6 million capital raising.”
Tag also said in a statement to the ASX that “it is still interested in acquiring parts of the EMC business and is willing to continue discussions with Carnegie”.
Tag had been expecting the deal to turn it into a mid-tier off-grid power supplier.