trying to do some reading on REAC1 Oct 2016 20:14
REAC have a biomass plant at Newry which cost them £5.75M
Due to underperformance of the original gasification technology, a decision was made to repower the project with a new technology and with a new technology provider.
The gasification equipment purchased from EBIOSS will cost €4.963 million, fully payable in cash.
REAC borrow 750,000K for exclusively project development
REAC & EBIOSS change terms of loan and have now used £225K of the 750K on working capital.
Plant still in mothballs. No sign of getting Newry plant functional (company think it will take 15 months from getting finance in place b4 generating electricity back into the grid). So now, with project development money spent on working capital, the company will have to borrow additional capital to do what they originally borrowed the money for. Which in itself was a fraction of the money needed to pay for the new plant (which they need to generate cash).
In mean time company announce that it has planning permission for another, bigger biogas project at Clay Cross (The Company is currently in discussions to secure finance for the construction of the Facility and estimates that it will take approximately 18 months from obtaining finance to the final commissioning of the plant).
Financial Summary
· Group revenue of €0.13 million (H1 2014: €0.15 million)
· Administrative costs of €0.25 million (H1 2014: €0.61 million)
· Loss for the period from continuing operations of €0.4 million (H1 2014: Loss for period €1.3 million)
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Serious question. If my quick read of the RNS's is correct, there seems a lot of risk. What am I not seeing?