MPower Group empowered by refinancing soon-to-mature loan facility

MPower Group (ASX:MPR) has ‘strengthened’ its balance sheet with a new loan facility and equity position from diversified Australian investment group Oceania Capital Partners (OCP).

The renewable energy and battery storage development company says the new loan is to replace MPower’s St George Bank debt facility that matures on 15 August 2023.

On 12 July 2023, MPower reported the St George Bank corporate debt facility had been extended by a month to 15 August 2023 while the company worked towards finalising a longer term refinance of the facility. An amount of $4.6 million is currently owing under the existing facility, as reported 12 July.

Oceania Capital Partners is a public company with permanent capital that pursues private equity style investments in businesses that have significant global growth potential. Its preferred approach is to partner with existing owners by taking meaningful stakes, as per the company’s website.

OCP is chaired by MPower non-Executive Director Robert Moran.

The company reports the deal materially strengthens MPower’s financial position ahead of the planned rollout of its national Build Own Operate (BOO) portfolio of solar power and battery storage projects.

Under the deal with OCP, MPower has extinguished in full its $4.5 million term debt with St George Bank and replaced it with a new $1.8 million loan from OCP which has also taken a 14.5% equity stake in MPower through the issue of 50 million ordinary shares in consideration for providing the loan facility.

The company says the refinancing lowers MPower’s debt profile, reduces ongoing debt service obligations, and delivers a one-time financial benefit of $2.8 million to the company.

Commenting on the refinancing, MPower Chief Executive Officer Nathan Wise says the new facility with OCP de-risks the company’s operations from a capital management standpoint. He says it also leaves MPower well-positioned to focus on operations and more rapidly advance development of its pipeline of clean energy projects across Australia.

 “We are now fully focused on advancing the Narromine Renewable Energy Project and will provide updates on this and other activities that are strengthening our portfolio”

“Execution of this financing agreement and equity stake by OCP materially strengthens our balance sheet, brings a respected and experienced investor to our register, and provides us with much greater financial flexibility to accelerate the rollout of our national BOO clean energy portfolio is which is now gaining significant momentum.

We are now fully focused on advancing the Narromine Renewable Energy Project and will provide updates on this and other activities that are strengthening our portfolio.”

The refinancing agreement follows the company’s announcement of a strategic project funding relationship established with global renewable investment firm AMPYR Energy, which includes a $10 million funding facility to take the Narromine Renewable Energy Project in New South Wales through to full operations.

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Written By Adam Orlando Managing Editor Adam Orlando has more than 20 years’ experience in the media having held senior roles at various publications, including as Asia-Pacific Sector Head (Mining) at global newswire Acuris (formerly Mergermarket). Adam has worked in newsrooms around the world including Hong Kong, Singapore, London, and Sydney.