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Good to see the buying price increase steadily this morning from 10.8p to almost the full 11p offer after this morning's solar disposal news.
The closing comment sounds encouraging:
"Our business remains robust and we look forward to provide continuous updates on progressing our strategy within the Indian energy sector."
The way the solar assets would have been financed is with a mixture of shareholder loan and equity investment. Any distributions from the project later on are then used to pay the shareholder loan interest first and any excess is paid as a dividend.
The two instruments are usually thought of as "stapled" together i.e. the same entity will hold the equity and the shareholder loan. It looks like OPG as sold the equity portion but not the shareholder loan which is unusual.
The only reason I see for it to be structured like that is because the party acquiring the asset is interested in claiming that it owns 30% equity stake in solar assets with a capacity of 62MW. So on a pro-rata basis it has added c. 20MW to its portfolio at little to no cost. The power producers especially listed ones are typically focused on MW's Installed. It could also be that they didnt have readily available cash to buy the shareholder loan and that will come later.
The good thing is that essentially what this is implying is that OPG's investment in the solar assets as been valued by the acquirer of the equity stake at the value of the shareholder loan (£10.8m) + £210,000 so a total of £11m. This is higher than I expected, I value the shareholder loan + equity in the solar assets at ~£7m.
Daniscp,
Thx for the explanation , appreciate that
If you go back to 2016 they issue this. Read it and does that means OPG have been getting paid back bit by bit and have £10 mil left to receive. Maybe this explains how they smashed their overall debt the last few years, payments received and cash generation from the existing business ?
05 July 2016
5 July 2016
This announcement contains inside information.
OPG Power Ventures Plc
Renewable Growth Projects Pursued
OPG Power Ventures Plc ("OPG", the "Group" or the "Company"), (AIM: OPG), the developer and operator of power generation facilities in India, is pleased to announce an investment in 62 MW of solar projects as part of the Group's ongoing growth strategy.
62 MW Solar Projects in Karnataka (India) - 25 year PPA - expected commissioning in 2017
The Board has approved the Company's investment of GBP45 million in four new solar projects across various locations in Karnataka, one of the most industrialised states in India. This investment is to be funded from a combination of internal cash generation and debt and the Directors expect all four of these new projects to be generating cash flow by June 2017.
The projects were secured in a competitive bidding process and the Company has signed long term (25 year) power purchase agreements (PPAs) at an average tariff of Rs 5 with Karnataka Power Corporation. The targeted return levels are expected to be met without any subsidies being available.
Maiden dividend expectations unchanged - longer term expectations enhanced
The Board announced its initial expectations with regards to dividends on 24 May 2016 and that expectation remains unaffected by this approved investment. The Company's dividend objective is to attain a pay out of 15 per cent of full year net earnings, subject to the level of free cash flow generated calculated after scheduled debt repayments and expected capital expenditure and progress to a long term dividend strategy that pays out a third of the Company's total net earnings in any year. The solar energy business is expected to make a significant contribution towards this target while keeping the Group on a growth trajectory.
Desperate market full of stale bull sellers 210k sale today at 10.075p.
What can you do eh...I feel like ringing Cenkos and wasting 5 mins of my life asking them to sort out the promised
share buybacks ffs
Davy
We did tell you the buybacks were never gonna happen anytime soon
Zoo rose 50% today because they said their loss would be a lot better than forecasts. £32.5 mil market cap. only about £8-9 mil difference from OPG. OPG would be better off losing £20 million then saying they are only going to lose £15 million the year after shares would rocket....market is nuts now
The Company understands market consensus for FY24 to be revenue of $37.6 million, EBITDA adjusted for share based payments loss of $14.0 million and net cash of $1.6 million.
Somebody bought 280k today via 2 lots, clearly same buyer as both delayed within minutes. The 150k sold at 10p must be a tax seller too desperate to be anything else considering "robust" trading