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Since mid-July, shares of EQTEC PLC (LON: EQT) have been stuck trading sideways despite announcing its second acquisition of a waste-to-energy gasification plant in Croatia.
The company acquired its first Croatian plant in early August to produce 1.2MWe from biomass (forestry waste). Yesterday’s acquisition is further evidence of its commitment to expanding its presence within Croatia and Europe.
Eqtec’s second plant is located in Karlovac, Croatia and was acquired via a 1.2 million loan that the company intends to convert into privately placed bonds in line with the country’s corporate regulations.
Interestingly, we have not seen a surge in Eqtec shares over the period, with the markets having a lacklustre reaction to the recent acquisitions. It seems investors are waiting for the profits to start rolling in before opening new bullish positions.
Eqtec’s second plant will also utilise forestry waste (biomass) to generate electricity connected to the national grid.
However, I am impressed by Eqtec’s new strategy that will play a critical role in the operation of the newly decommissioned plants to ensure that they do not fall off as they did in the past, given that these are not new facilities.
The two Croatian acquisitions were made via the joint venture formed between Eqtec and the Sense ESCO team to reduce the forestry waste wood biomass in the local areas where the two projects are located.
Eqtec will provide its advanced gasification technology to generate clean energy for Croatians.
The shift in strategy to the Market Development Centre strategy will work long-term as governments, and other organisations see how they can operate similar facilities at their own expense.
David Palumbo, Eqtec’s CEO, said: “I am very pleased to announce the acquisition of a second sustainable waste-to-energy plant in Croatia, after very recently acquiring a similar plant in Belisce, which we will recommission and operate as the country's EQTEC Market Development Centre.”
Eqtec share price.
Eqtec shares have been stuck trading sideways since mid-July despite recent acquisitions.
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