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Looks like we should have news on that before the year is out.
The 'bad' deal on the book is Brasil, which it is trying to sell. Brazil is a backward country in many respects. It's Govt is either far left or far right, the latter at present. CV19 handling in Brasil has been worse than that of Trump. I have lived in Brasil for a number of years, and have yet to see a Solar Panel, either commercial or private!. Hell will freeze over before it embraces EV's.
I think you're right, we're pretty close but perhaps disagreeing on deal potential! I'd be wary if he deals start to take a turn for the worse, but am happy to trust management until then really.
Best of luck!
I believe the important phrase is 'Provided there's a supply of deals to be done'. We have to trust BOD judgment that it will always act in S/H best interest, and not buy for the sake of buying. The %age of debt to the asset purchased is critical. Not all 'green' assets are good assets. I think the idiom , 'Cash is King' has survived for good reasons.
We are not too far apart in our thinking. GL.
I sympathise with this view, but equally cash is finite and this is a growing business. If you have $100m of spare cash, you can buy 1x $100m asset, or add $100m of debt at 50% leverage to buy 2x $100m assets - which will double the returns for a minimal interest cost. Or you could use the cash to repay existing debt and not buy a new asset at all? Why would you do that?
Provided there's a supply of deals to be done, carrying debt makes sense.
ghhgdd';
'Using cash to fund purchases is all vey well but is hugely limiting when there are so many opportunities available. Debt is a valuable corporate tool, ESPECIALLY when it's structured like this is. I'd be disappointed in any management team that didn't use debt to fund assets like these.'
GLO is a Company that purchases 'green energy' assets in the main.. What does it need cash for. Only for the payment of Divi's. What do you do with surplus cash after divi is paid. ? Repurchase shares? I have already made a case on a n board that it is better for S/H to pay divi and not repurchase shares, except in the case when the Company offers shares in lieu of cash, then repurchase those.
testpack3, you replied
Amortisation is the process of 'paying off' debt over a time period. It still has to be re-paid. I agree that funding asset purchase is best through debt rather than share based fund raise, but it is debt. I would like to see a more concerted effort in paying off debt, so at least, significant part of future purchases can utilise 'cash in hand'.
Fixed rate depends on the rate. Not good if it's old debt at 10% p.a.
Amortisation is repayment of debt on a fixed schedule, so it is being paid off, as it comes due. This debt is attached to each asset individually, and the parent co isn't liable for it, so it's very low risk to shareholders. In addition the term length for these loans matches the length of the PPAs, most of which have very predictable cashflows and I really don't understand why you'd want to pay that debt off early?
Using cash to fund purchases is all vey well but is hugely limiting when there are so many opportunities available. Debt is a valuable corporate tool, ESPECIALLY when it's structured like this is. I'd be disappointed in any management team that didn't use debt to fund assets like these.
ghhgdd, you replied
'I'm not sure why you think the debt needs to be reduced? It's mostly asset-backed lending that amortises, so there's no re-fi or contagion risk from the majority of it. Further, most of it is on a fixed rate, so there's no rate risk either!'
Amortisation is the process of 'paying off' debt over a time period. It still has to be re-paid. I agree that funding asset purchase is best through debt rather than share based fund raise, but it is debt. I would like to see a more concerted effort in paying off debt, so at least, significant part of future purchases can utilise 'cash in hand'.
Fixed rate depends on the rate. Not good if it's old debt at 10% p.a.
I'm not sure why you think the debt needs to be reduced? It's mostly asset-backed lending that amortises, so there's no re-fi or contagion risk from the majority of it. Further, most of it is on a fixed rate, so there's no rate risk either!
There's a huge pipeline and debt funding is a sensible approach.
Very happy with this share. Am going to increase my holding
Brasil is a drag on profit with the Exch rate of cRs7.5=£1. It's been over 8. It is trying to divest itself of this drag, but probably not easy in a Country devoted to Oil. On divi alone , sp should be N of £2.50. I would like to see more movement in an effort to decrease debt.
Extremely decent. Great pattern of sensible dividend growth. Happy to tuck this one away and just watch the dividends roll in.
Well that looks pretty decent to me. Markets might be a bit jittery this morning, however I for one would be disappointed if we don’t see a reasonably favourable reaction in SP here. But what do I know.
Strong hold for me. I’d add, but don’t have spare funds.