LONDON (Alliance News) - Andalas Energy & Power PLC on Wednesday said its interim loss was wider year-on-year following the change in tack that saw the company become an energy firm and move away from being an investment firm, and said it has issued a USD500,000 loan note.
Andalas shares were trading 16% lower on Wednesday at 0.115 pence.
The company said its pretax loss in the six months to the end of October amounted to USD3.2 million compared to the USD1.9 million loss a year earlier, with no revenue generated in either period.
The primary cause was USD446,000 worth of AIM readmission costs, USD794,000 worth of share-based payments and USD1.3 million of business development costs - all of which were not present in the prior year.
Partly offsetting that was a drop in administrative costs to USD552,000 from USD1.8 million.
Andalas formally changed its strategy in the last financial year, and is now focused on Indonesia. The company signed a "milestone" cooperation agreement in the first half with Pertamina, Indonesia's national energy company, to help speed up the London-listed company's ambitions to become a power producer.
Initially, Andalas is targeting 250 megawatts to 500 megawatts of capacity from five operations. Proposals for the first gas-to-power project with a combined capacity of 60 megawatts has been submitted to authorities.
That has been submitted so it can be included in Indonesia's Electricity Supply Business Plan - which serves as guidance for the future development of power infrastructure in the country to meet increasing demand, similar to the Capacity Market auctions in the UK.
"Approval [of the gas-to-power project] not only opens up multiple funding options for the development of the first project, but will also prove the model we have adopted to become a leading Indonesian focused energy company via the roll-out of an initial portfolio of 250 to 500 megawatts of installed capacity.?
Discussions remain ongoing with potential equipment vendors, industry participants and finance specialists about funding options, Andalas said.
At the end of October, cash stood at USD318,000, excluding the USD500,000 loan note that was issued on Wednesday. The note has been issued to Sandabel Capital LP, carries no coupon, and is secured against the company's assets. The loan is due to be repaid by April 28, 2017.
Cash proceeds from the loan note totalled USD400,000. If the loan is not repaid on time, Sandabel can covert the balance into Andalas shares priced at either the closing share price the day prior to exercise, or at a 20% discount to the 10-day volume-weighted-average-price in tranches of GBP20,000, whichever is lower.
For every three conversion shares issued under a conversion notice the lender will receive one 18 month warrant with exercise price at a 100% premium to the conversion price, Andalas said.
"The board believes this will provide sufficient additional working capital to progress the company?s strategy without issuing further dilutive equity at this time. The directors remain confident that the group will continue to be able to finance its future working capital and development cost requirements beyond the period of twelve months from the date of this report," said Andalas.
Andalas Non-Executive Chairman Paul Warwick said the business intends to add new projects to the portfolio.
"We believe we are in the right market, with the right opportunity, relationships and economic fundamentals to deliver value for all shareholders and I look forward to providing further updates on our progress in the months ahead during what promises to be an exciting period for the company," he said.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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