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Not sure I understand what is going on here :
(1) Our company NGP - 100% owned by NCCL* but see (7) below - is looking to acquire up to 40% of JVCo, which is looking to acquire initially 51% of the NIH Portfolio.
(2) NIH portfolio consists of a number of assets/projects that have been developed/managed by NESA (who will presumably start with the balance 60% of JVCo ...and then be diluted down by the subsequent capital raise).
Is this right ? What will new funds be used for ?
How is the NIH portfolio (which we're partly acquiring) currently funded ? It looks from NESA's website as though NIH itself is a VC kind of company, with EIS-like investors offered up to 45% tax relief and juicy income returns - are they not willing to continue funding ...or is the offer/portfolio not attractive enough to draw in more money from that source ?
(3) We're told what the NIH portfolio includes - in generation and battery terms - but not what it cost /is 'worth' , only that it generated revenues of $ 2.4M in FYE Feb 2021 and EBITDA of $ 0.8M.
(4) Its portfolio is 9.8 Mw commissioned and 5.8Mw 'work-in-progress'...how long to commission ? Are we bailing them out because of a shortfall in other funders ?
(5) Never mind new stuff, have we commissioned OUR project ('due end June') ? I guess not or we'd have heard.
(6) How long before this commissioning until we've paid back the Director Loan $ 500K ? At revenue of ?? $17K ?? it'll be some time.....
(7) Until then, we have this over our heads :..-- Lenders right to convert the Bridge Loan into equity of NGP with a coupon of 50% should NGP default on repayments or under events of default typical for a project of this nature.." How much equity ? And who will commit NCCL / NGP to this deal ?
And this
(8) NGP has also secured the RIGHT to fund a US$5.5m C&I project development pipeline in Mozambique through a Relationship Agreement with Captive Power Limited.
We must have been fighting off the competition.
This all looks to me a bit like two drunks propping each other up for support.
I only hope that our Directors scrambling to foist this further 'investment' on us is a sign that the Coal Project (remember that ?) is approaching completion and take-out.
Not a happy bunny atm.
O
A proactive interview from the man himself;
https://www.youtube.com/watch?v=3luk-r5Kobk&t=102s
Am in agreement BENJAN1, sale of our entire stake is looking likely. Once tariff lands, we will move quickly from there, in my view.
We know they in sensitive negotiations over tariff, the key value determinent of the project. Company have officially said that they have to weigh up market expectations for news with the sensitivities involved in these negotiations. Specifically;
"Finalising the tariff will unlock all the remaining milestones and while we aim to provide updates as regularly as possible, we must balance this with the sensitive nature of such negotiations."
https://www.investegate.co.uk/ncondezi-energy-ltd--nccl-/rns/project-update/202103250700084117T/
In other words, this radio silence is no secret and should be expected. Until tariff talks are sorted, there is nothing else they can report. And my guess is that we aren't far off.
hxul, Daisy, it really does depend on whether you think the glass is half empty empty or full. One could easily counter your opinion of what's happening with saying nccl is expecting the tariff and perhaps sale of the project to occur before q3 and moving ahead with the solar side of the business. I don't believe the main project is dead in the water. As I've said before there's an immense amount of work that has been completed to date. Can you please explain why nccl, CMEC, EDM and Moz government wouldn't announce the project is dead in the water already if indeed this is the case? Other than legal requirement to do so, why would they have wasted so much time and money to get the project to this stage? Re-read milestones achieved over the past 6 even with Covid delays. Why have nccl recently called in consultants to help finalize the tariff? Why are they still working with CMEC to finalise and sign EPC contracts? To be honest I'm at a loss as to what your arguments are against the project. Daisy, I get there's a lot of overly optimistic posting at times, but I'm unsure as to what your reasons are against the project going ahead? You seem to turn up and troll posters who have been calling X pence at X date to remind them of how wrong they've been, but not sure what else? Both, please feel free to provide reasoning for your pessimism on the main project based on what we know has happened. And please don't use the whole 'coal is dead' argument. It's not dead in most parts of the developing world, and projects are going ahead unabated across Asia as we speak. Our partner also happens to be Chinese.
My view on this is that NCCL are preparing to be taken out by CMEC upon determination of the tariff agreement and the renewable projects are going to be the long term future of the company.
There is lots of scepticism around the main project due to delayed timescales, but there are powerful players behind it happening.
I have faith that Scott Fletcher has bought in on the basis that the power project will happen and that there will be the opportunity to generate long term cash flow from the renewables.
I’ll continue to buy at these levels, it’s a gift.
I think you are right.
Main project is on the back burner. SF will probably help to fund this.
Foe all those dreaming of a sale or part sale of the coal project, carry on dreaming.
This is going nowhere for the foreseeable.
I could be wrong and many on the board will hope that I am ( probably for their sakes I do to ) but if asked to bet on how things progress from here my bet is
- radio silence on the main coal related project for the foreseeable
- increasing solar news flow and associated fund raising
It’s a bit cryptic but I read the reference to “different shareholders” as a possible future carve-out and separate listing of one of the two business lines, with an in-specie distribution to existing SHs. But this would imply that they will hold onto their interest in the power project though which others think is unlikely
Excerpts
Optimal ownership structure for the Company's coal baseload and renewable energy projects are being reviewed given changing investor appetite for renewable versus fossil fuel projects
NESA, NIH and NGP have entered into a binding agreement granting NESA and NGP exclusive rights to negotiate terms on which they would acquire, through the proposed JVCo, a minimum 51% interest in the NIH Portfolio by 30 November 2021 with a subsequent option to acquire up to 100% within a 5 year period.
NESA comes with an experienced management team with a proven track record developing and managing a 15.5MWp solar PV plus 0.2MWh battery storage C&I portfolio across 66 sites in South Africa (the "NIH Portfolio")
Following the proposed capital raise and transaction, JVCo will have a combined operational portfolio of 15.9MWp solar PV and 1.1MWh battery storage across 67 sites in South Africa and Mozambique, subject to funding and acquisition of the NIH Portfolio
NGP has also secured the right to fund a US$5.5m C&I project development pipeline in Mozambique through a Relationship Agreement with Captive Power Limited
Everyone has there own opinion on the main coal project. Mine is that that ship has sailed. Looks like they are teaming up with a small but growing SA Solar outfit / adapting to their circumstances. They have neither the back catalogue nor the financial muscle to be anything other than a junior partner.