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thank you for your thorough response Mr T and I do admire your optimism. I also agree that the NI Government really will not want this to fail.
From a shareholders perspective the reality is that we have a large monthly burn of workers wage bills, site maintenance, board wages, nomad fees, legal bills, rates liabilities, interest on debt and all the standard daily bills that land in through the door when owning a listed asset of this nature. On the income side INFA have nothing solid...just a lot of future hope on this share chat board whilst being caught on the dirty side of energy and gas storage whilst the world and Belfast is announcing climate crisis. Monthly cost burn without income is perfectly fine if the site was owned by a company sitting with lots of cash on the balance sheet as it can afford to make non-rash decisions and still meet month end payments ...but for a cashless entity like INFA it might be a step too far.
I do fear the Government will have to write future large cheque of support into INFA and this site.
Asset value in this case is very subjective and I am sure any affordable banking partner will look at interest cover lending and future earnings. Let’s hope income comes quickly so that INFA doesn’t just burn the expensive loan and then dilute all the shareholders in a silly rights issue rate like it has done over and over and over and over and over again.
Hope so Mr. T
The news overall is brilliant.....I just found that bit a little unsettling. But even if the rate IS sh*te we are still picking it up for a song.....and as you say oodles of local and government goodwill which is priceless !!
I would suggest much of that article is inaccurate.
It talks about the 1.6M EU funding as if Infastrata had negotiated this as part of the finance for H &W which both you and I know is complete and utter tosh?
Also the term unfavourable debt seems to have been made up? This was not in the official RNS.
As always lazy reporting from a lazy reporter!?
Despite the company’s £7m market capitalisation, comparable in size to the deal itself, he said that he did not anticipate significant equity dilution from funding the takeover. The news was welcomed by Julian Smith, Northern Ireland secretary in the UK government. “I firmly believe that the shipyard has a promising future and that InfraStrata’s plans present an exciting opportunity for both Belfast and Northern Ireland’s manufacturing and energy sectors,” he said. The rescue comes after the collapse of another well-known Northern Irish manufacturer — bus-builder Wrightbus, which entered administration last week with the loss of 1,200 jobs.
Don’t like this bit at all……….’ The majority of the remainder offered in the agreement comes at an undetermined interest rate, chosen by the lenders. Mr Wood described these terms as “unfavourable”.’
That bit doesn't sound brilliant!......in fact it stinks.
Titanic builder Harland and Wolff thrown lifeline in £6m deal UK energy infrastructure group InfraStrata agrees deal to buy shipyard from administrators The frigate deal throws a potential lifeline to Belfast’s Harland and Wolff © Paul McErlane/Reuters Share on Twitter (opens new window) Share on Facebook (opens new window) Share on LinkedIn (opens new window) Save Arthur Beesley in Dublin and Archie Hall in London YESTERDAYPrint this page14 Harland and Wolff, the Belfast shipyard that built the Titanic, has been saved from collapse after UK energy infrastructure group InfraStrata agreed a £6m deal to buy the struggling business from administrators. InfraStrata said the agreement would save the jobs of the remaining 79 Harland and Wolff workers who did not opt for voluntary redundancy earlier this year. In a statement on Tuesday, InfraStrata said it planned to increase the size of the workforce “by several hundred over the next five years”. Harland and Wolff employed 123 when it entered administration in August, casting doubt over a business that traces its roots back to 1861 and whose two yellow cranes, Samson and Goliath, dominate the Belfast skyline. The shipyard, which once provided work for 35,000, had struggled to win business in recent years. InfraStrata’s sole major current project is a planned gas storage plant at Islandmagee, Co Antrim. The company plans to use Harland and Wolff’s personnel and fabrication facilities to build steelwork, pipelines and structural equipment for the plant. It estimates that bringing this work in-house cuts costs by 15 per cent, more than the expense of acquiring Harland and Wolff. John Wood, chief of InfraStrata, said Harland and Wolff was a landmark asset. “While our core priority will be to deliver our flagship project in Islandmagee, we believe there are opportunities to welcome potential new clients due to the diverse skill set at the facility.” InfraStrata has put down a £500,000 deposit for Harland and Wolff, and plans to pay the remaining £5.5m in two tranches, concluding in April 2020. In the infrastructure group’s most recent annual report, released in January, it generated no cash and its auditor raised concerns about its ability to continue functioning without external funding. To cover the Harland and Wolff deal, InfraStrata has secured a £2.2m loan agreement, from which it has withdrawn £700,000 for the initial deposit. The majority of the remainder offered in the agreement comes at an undetermined interest rate, chosen by the lenders. Mr Wood described these terms as “unfavourable”. He noted that InfraStrata had “two compelling different offers on the table, two more still being negotiated”, and that the company had secured a €1.6m grant from the EU. Recommended UK manufacturing Northern Ireland’s Wrightbus collapses The acquisition will eventually be funded with a mixture of debt and equity, skewed towards debt, according to Mr Wood.
If you wish to be educated I suggest you fully read the RNS re the purchase of H&W, you will see it will be run as a separate entity and working capital funding will be sought.
The business comes debt free as it has been bought out of administration, so the basic maths re
Loans/equity to purchase 6M
Value of asset conservatively put at 11M
Therefore this business will restart as a new entity, as I say, debt free? Apart from the loans and equity to purchase. Essentially a fresh start but the important caveat is, not only have Inca acquired the assets, they have acquired the name. They will then look to acquire new business, but the business will be underpinned by the work they will be involved with in respect of the IM project. Therefore cash flow will be incoming from that project and hopefully other projects will come on board.
Its a no bringer for Inca as the goodwill it promotes in NI is priceless and it will ultimately save Inca costs in the overall construction of the IM project.
As I point out you refer to massive liability burn, I assume you refer to the H &W business pre administration? This is a totally new business with no debt apart from loans to purchase. I have to say most large construction businesses retain bank debt to operate, its all about how that is managed and kept with certain levels so as to be able to be serviced by income streams and profits.
This could be a masterstroke of JW's imo, lets see how we go once all of the agreements are finalised.
Government (Westminster and absent Stormont) are not about to let this fail, giving the broader political context. This is rare good news story amidst the gloom. We have bought more than publicity...
I like to be educated. Not lonely just curious.
I am not in the haters camp despite what Speedy claims - just providing a balanced voice on the board. I simply don’t understand how a company without any money agrees to buy iconic cranes in Belfast knowing they have a massive liability burn. I fear it is going to be a long cold winter. If there was funding already identified the board would be obliged to Disclose that to investors so let’s move forward with eyes wide open till a more meaningful legal agreement is signed. Let’s hope Unite union have done their homework and due diligence and this isn’t a publicity stunt.
Positives are that I hope it works out for the workers of H&W. They deserve a strong employer who will look after their rights.
Almost 10 times normal volumes today. Hoping further good news keeps the momentum up
InfraStrata posts solid gains as it advances Islandmagee project:
That’s absolutely correct Spud.
And 99% of us would not understand it’s contents anyway!
I can't see the GSA being made public.
Surely it would publicise Vitols whole trading strategy?
It would be like me telling all my competitors how I price a job!
Whoops....Mr T.......I must have had a mega senior moment!
I couldn't remember seeing those last two items............Snowblindness !
I plead insanity.
Is this what you refer to? listed under October?
Final payment against EU Reclaim for completed FEED works
Release of revised construction tender documents
Appointment of Chairman
Heads of Terms agreed for project equity funding
Equity funding agreement executed
GSA details and equity/debt funding details please.
The only possible logical reason I can think of ad to why equity/debt funding not included in the milestones is another left_field bombshell that it is actually going to be all in one with the offtake and VITOL doing the lot...if that's the case SP will go straight to 3p plus.
What other scenario fits for equity/debt funding to be left out of milestones....has to come before FID which is on the list.
Comments eagerly anticipàted.
That or he's going to use gas to fuel buses and is in talks with Wright bus. ;)
I think JW will continue with the RNS's now to maximise the momentum, GSA breakdown tomorrow would be nice.
Yes mcap totally out of sync now.
still only circa £8mill and we are getting £15mill back when equity deal signed, good to see volume returning though, nice steady daily rise is ok . All I need now is an EU deal and happy days.
The difference now is that gas storage is critical to the UK and a big part of the stratergy to reduce carbon footprint.
For those that remember how close Portland Gas Storage Limited was to being sold to Centrica in 2007 (SP peaked around 440p) only for it to be kiboshed by the financial crisis taking hold.
I’m getting a bit of deja vu here given what’s happened to the FTSE today re US Data yesterday. Praying the China-US trade war doesn’t cause a repeat a decade later from the last missed development.
Sorry for raising this but we all know it’s financial closure that is mission critical for the project.
It’s all IMHO and I’m not saying it will occur but it is a concern of mine though I’m hanging in for the ride up which as someone pointed out earlier will not be in a straight line.
Lot of sells...big buy order?
SP probably shoot up at close.
A bit of proffit taking to be expected..
WHY GO on boards if your not invested its a waste of time surely unless your lonely which would be a shame