- Integrated Green Energy Solutions (IGE) has backtracked on its previous funding announcement, saying the Abu Dhabi Investment Authority (ADIA) is not the source of funding via its partner, Tangier Service Enterprises
- The announcement was made just after market close on Friday afternoon, leaving many shareholders furious
- “The Abu Dhabi Investment Authority (ADIA) has not been involved at any time either directly, or through intermediaries, with this project or the company in question,” said ADIA’s Erik Portanger in a statement to The Market Herald
- In spite of the correction, IGE says the terms of its investment agreement with Tangier remain the same
- The company is still expected to provide US$300 million in funding, repayable over the next five years
- IGE’s share price tumbled 18.8 per cent this afternoon before the correction was issued, now sitting at 13 cents apiece
Shareholders in Integrated Green Energy Solutions (IGE) are baffled after the company backpedalled on its earlier news of over A$400 million worth of funding from the Abu Dhabi Investment Authority (ADIA).
The company announced on Wednesday it had finalised US$300 million (A$435 million) in funding from ADIA through Tangier Service Enterprises, who IGE claimed is a U.S. partner of ADIA. ADIA is owned by the Emirate of Abu Dhabi and acts as an investment fund on behalf of the Abu Dhabi government.
However, the Abu Dhabi investor claimed it had nothing to do with the funding. In fact, spokesperson Erik Portanger told The Market Herald the investment fund has never been involved with IGE in any way.
“The Abu Dhabi Investment Authority (ADIA) has not been involved at any time either directly, or through intermediaries, with this project or the company in question.”
Erik Portanger, Abu Dhabi Investment Authority, January 2020
Today, IGE retracted the Wednesday announcement and confirmed that ADIA was not, in fact, the source of the funding. The company told investors it has now been advised ADIA does not have any involvement with Tangier and subsequently has no involvement with IGE.
This begs the question: what is to become of eager investors who topped up their shares on the back of what they thought was ADIA support?
IGE made an effort to tout ADIA’s US$850 billion in assets under management when telling shareholders it was an investor. As such, punters who bought in off the news may be demanding their cash back.
Yet, despite the furore, IGE has maintained its initial funding agreement with Tangier remains in place.
The service partner is expected to put up US$300 million in funding for the company, which it has the option to repay in instalments over the next five years.
While Tangier has received no initial payments for extending the financing, it will be entitled to claim a five per cent equity stake in Integrated Green Partners (IGP), a joint venture between IGE and its U.S. partners, GEP Fuel and Energy Indiana.
Little more has been said regarding the source of Tangier’s funding today, but IGE did reaffirm that its partner received capital from a broad range of private and public institutions in addition to funding from individuals.
IGE has also reiterated its partnership obligations with GEP and Energy Indiana are still in place. These include procuring the auto shredder residual (ASR) driver plastic, identifying a site for construction, and securing the US$300 million funding package.
The company’s share price tumbled 18.8 per cent this afternoon before the correction was issued, where it now sits at 13 cents apiece. The company trades in a market cap evaluation just over A$51 million.
The IGE correction was released to the market once trading had closed for the weekend. As such, it’s unsure how investors — and indeed the Australian Securities Exchange — will respond.