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https://northforkcdc.org/
i. Biomass plant—update: Wade Wheeler gave a report. Some work is being done.
There are no extensions to the financing for the completion. However, PG&E has given
us until August 2023, to take advantage of the agreed upon pricing. There is a State of
California grant/loan available."
The August meeting will be available to all through zoom. Maybe as investors we should attend and ask these questions directly.
$28m to date, when we consider that the project was originally to use General Electric gasification equipment. Costs and money paid to General Electric, plus covid, plus Forrest fires, plus increases in commodity prices, supply chain delays. $28m for a 2MW project maybe not too bad all things considered?
The next 3MW BMEC project is due to cost $32m or that amount of funding is being secured
"So has Northfork cost $28m to date? And eqtec own 49% for an investment of $6.5m?"
So $6.5M for 49% of a money-pit that no one knows if or when we will see a return? Is the $6.5M a good investment, how much more will need to be spent to get our money back?
Do we actually know what the delays are, how much it will cost, when it will be online.
This "community project" is becoming more like "Care in the Community" from EQT point of view.
"Not once do they mention Google or Amazon..."
https://youtu.be/9UrtOc3beA4?t=833
So has Northfork cost $28m to date? And eqtec own 49% for an investment of $6.5m?
Taken from RollonRetirements project notes-
https://my.hidrive.com/share/4-d-n-4npd#$
SPV: North Fork Community Power
Ownership: EQTEC supplied equipment valued at $2.5M to NFCP in return for 19.99% of
the total ownership of NFCP. (04/06/2019)
EQTEC advanced loans of €1,150,609 to NFCP which converted into 15% of
the equity of NFCP. (2020)
EQTEC invested an additional c. $2.8M in NFCP, increasing their equity in the
project to 49%. (14/10/2021)
EQTEC agreed to provide NFCP with a two-year convertible loan facility of up
to $4.5M. This loan will accrue interest at a rate of 10% per annum, payable
annually, and the balance outstanding (including any accrued interest) will be
convertible at the EQTEC's option at the earliest of: the maturity date, any
default or any takeover. If the Convertible Loan Facility were fully drawn down
and converted into equity, it would result in EQTEC taking a controlling interest
in the project. (14/10/2021)
Estimated value on commissioning $20M (02/01/2020)
Revenue: Total approx $4M pa (02/01/2020)
-----
https://www.faegredrinker.com/en/services/experience/2019/11/financing-of-north-fork-community-powers-biomass-gasification-plant
($15.12m tax exempt bonds awarded in 2019)
https://www.novoco.com/events/awards/2016/community-development-qlicis-year-awards/winners/operating-business/north-fork-bioenergy-plant
($6.3m in 2016)
Eqtec have invested $6.5m and get 49%
Eqtec have also received revenue for engineering works done over the years
Here is your Q2 trading update,
https://youtu.be/VpofY6ER5Wg
Sorry it's not in RNS format, but will a 17 minute proactive video from 2 weeks ago do?
Not once do they mention Google or Amazon...
They do however mention that Tier1 partners will have mitigation procedures in place to cover funding shortfalls if they happen. They also cover the fact that the original plan was for eqtec to be a technology company solely, i.e supplying the designs and engineering. BUT the smaller projects have all suffered through supply chain delays and increases in commodity costs hence eqtec have had to step in and be proactive, and carry out purchase of equipment themselves to maintain momentum.
They are quite thorough and honest in their assessment of the current situation. Need projects finished to prove the technology and secure funding in projects. Need funds to finish projects. Need to have a variety of projects to secure Tier 1 partners.
Don't think this has been posted from NF minutes late July
"
i. Biomass plant—update: Wade Wheeler gave a report. Some work is being done.
There are no extensions to the financing for the completion. However, PG&E has given
us until August 2023, to take advantage of the agreed upon pricing. There is a State of
California grant/loan available."
The bad macro has undoubtedly made things far tougher, especially coming after Covid, I think DP is correct, but businesses have to ride out these problems, the trouble is that Eqtec is at a very vulnerable period in its growth cycle so it may be unable to recover.
The best option for shareholders would be to put the business up for sale as a going concern with a full order book and great tech and do that now rather than wait for the business to fail.
That would give a new buyer with deep pockets an excellent prospect for the future and hopefully flush out more than one prospective buyer to get a bidding war going.
DP has been keen to attribute the SP fall to wider macro market affects, comparing Amazon, google or Microsoft,
S&P500 has recovered nearly 15% since mid June !
The good news can only be cash flowing in.
I guess the latest fund raise has given about 3-6 months breathing space? - can anyone confirm if this is correct.
The market cap is just £41m, so I think the worst case is already in priced in, as long as the business continues trading.
If the business was put up for sale then its possible that with active interest, shareholders could get rather more than £41m - I think we all accept that the tech is good and there is excellent demand for it.
Hopefully DP will start to pump the cash, but I don't now see a long term future for this business in its present state, I think it would fare much better as a division of a much larger company such as Wood. The cash flow problems for such a small business are simply too big too overcome and they will just repeat over the years.
Q2 Trading Update?
Where is it ?
Negativity? it’s a fact!
It’s not about the technology/ the pipeline ticking along ‘slowly’ in the background. It means nothing when you keep failing to meet the deadlines that you set yourself very publicly : . . even just one of them we’d be grateful for.
There are others out there with tech that offers an alternative solution to a global problem and likely with a record of delivering in a timely manner. They may not necessarily be the best in their sector but when a solution is needed, they are the ones that land the contracts. That’s not negativity it’s a statement of fact unfortunately and the worry is we risk missing the bigger boat for a much smaller one.
The MDC's are owned by Eqtec and should be operating this year. They plan to sell the SPV's which own them to get some capital back but hopefully we still get a good deal for being able to show potential clients around. Southport is now lined up to be an MDC too, but isn't RNS'd yet. On paper it all sounds good, but it physically needs to happen. Running plants are the only thing which can get our price moving. No more delays now. That won't be acceptable under any circumstances. Be nice to see Desside closed in '22 too.
I agree on the need to deliver and I think the BOD realise this and that is why the likes of NF seem to have almost stopped. With a limited amount of cash the need is to prioritize where the best quickest results are with minimal additional spend and this looks like what is happening. So I don't get all the negativity as there looks to be every chance of an MDC completing this year.
The key to Eqtec success is having a good range of projects all slowly developing in the background and making sure some of those come to fruition on a regular basis. We have the former is spades but DP needs to double down now and focus on the latter. We have 13 or more projects getting to a good place and a global platform of partners to deliver the tech but we now need the crucial step of closure. I would like to see the whole team stop chasing new opps, that are clearly enormous and prove to the market they can deliver on the financial close and getting the few projects operational. This is what they need to do now and the final quarter of the year could be their turning point. Then the investor market can see we have the tech, the team, the delivery and financial closure capabilities. Come on DP lets stop the rot and painful dilutions and roll up our sleeves and get the deals otl.
This popped up in the news in march 2022 about the French and Asian pipeline of projects. It was never announced as an official RNS so won't be picked up by those doing background research. Interesting read anyway.
https://www.prnewswire.co.uk/news-releases/eqtec-announces-expansion-strategy-update-in-asia-808355119.html
Thank you computer909, I agree wholeheartedly.
aandi, you mention delays, going bust, I’m aware of the history and maybe they should have left well alone.
I’m also aware of the business model but whether they are the technology partner only in a contract, they have a vested interest to get it over the line and operational. There doesn’t seem to be any sign from them whatsoever of a project closure or any sense of urgency to get themselves to that point.
The constant delays affect credibility unfortunately and other solutions look more appealing to those wanting to invest in the tech.
I deliver contracts and services in a different profession/sector and I’m around the table having the conversations and chasing problems down. Without that presence of all parties, timeframes/targets/quality issues can all be affected.
The delays are exposing us to the next risk, be it a global event, production issues etc and they of course come cap in hand asking for more. It’s just frustrating to watch.
“How could eqtec based in Ireland and London have had any control over that? ‘
If we have committed $6-$8m we sure as hell should have had at least a degree of control/visibility of the issues.
Problem is DP is all too keen to keep spending cash , and getting the begging bowl out when something “unplanned’ goes wrong
https://sierranewsonline.com/pge-bankruptcy-stalls-north-fork-biomass-project/
I believe the power lines were subsequently to be installed spring 2022 but PG&E further delayed this
Ok a few points to make in reply to issues you raise there.
First, woodgroup revenue last year $6.4billion. Eqtec revenue €9m. Woodgroup have a lot of partners at much more advanced stages than Eqtecs pre FEED Southport project. Would be really odd for Eqtec to get a mention above more advanced project partners in the gasification sector.
Secondly, Northfork. Bit of a thorn in the side agreed. But all the contracts, tenders, partners were all agreed and paid for, all started way before eqtec became a large equity partner. They only completed the delayed civil ground works and mechanical completion stages maybe spring time this year. Total project cost probably around $20-30m? Eqtec investment so far, maybe $6m-8m? Eqtec have secured a larger stake of that project for cheaper than the other partners there... We stand to be the biggest winners.
Eqtec have not, and will not in future be a construction company, a commissioning company... We plan, develop, sell technology and maintain. Basically we had no control over Northfork construction delays in the past as a technology supplier and minority partner. The power company I believe went bust and didn't install the power cables on time. How could eqtec based in Ireland and London have had any control over that?
An MDC on the other hand, total project cost maybe €10m? And in Europe. And Eqtec are 1/3 equity owner. And the civil work is all done, the power lines and connection are already in place. "retro fits". Much easier to manage and fast track with a little extra cash than a project being build from scratch in the USA out in the sticks....
If we’ve put a lot more investment into Northfork, we should be making dammed sure there is significant progress, irrespective of whether it’s third parties involved in the build. We can’t allow it to keep dragging on for months/years without an end in sight. If we’ve got so little control in those decisions and timings, we should have walked away.
The wild fires rage, we have a solution to help with the problem . . . . but . . . .
We took on additional risk at further cost. If we chuck money at projects like that one, that are taking forever to achieve closure, then there should be a serious rethink by the BOD.
You can see the next placing on the horizon, needed because of rising costs due to delays!!! If they concentrated on getting one, just one that’s all, over the line in a timely manner, they would reduce exposure to further risk and it would be a huge boost all round.
Until then, they won’t be taken seriously enough. There are lots of posts on these boards with a link to a good article and a comment ‘no sign of Eqtec in it’. Is there any wonder. This BOD have had enough excuses, it’s time for action.
My fear, we get towards the end of the year as we did the last one, drip fed with their enthusiasm in tweets and other announcements only to find we didn’t hit the targets we were led to believe.
...and I mean proper concrete news, I hope DP has a rabbit to pull out of the hat very soon.