Member Info for AIMforprofit

Probably because it's Powerstar

3 of the 6 are using one manufacturer so there aren't really 6, there are 4

I'm at breakeven. I thought the day would never come!

Just for everyone's benefit, most lithium ion manufacturers have a lead time to install of at least 6 months now (if they will allow you any allocation at all). One of RedT's flow competitors is 10 months from order. Many of the lithium ion manufacturers are now booking up their supply a year in advance and there is competition to book some of their allocation. Having said that this is a small system and so should be fairly easy to deliver. 6 months is industry standard however.

Well, you are off the mark though.

RedT are bringing the finance (not their money but an investor's money).

As I've said 100 times before on this forum, because the revenues are not contracted and everyone has a different outlook and risk profile it means that everyone has a different IRR forecast. It is nearly always the case that the manufacturer and the developer will view a project at at least 15% when the investor views it at 10% or less.

It's not like solar where even though the revenues are uncontracted we all have the same assumptions and so valuations are broadly the same. Even mentioning IRR's is a complete nonsense.

No idea where you've got this IPO idea from. That would be totally down to whether the investor wants to IPO, which isn't that common.

As I've said previously, what makes you sure it is lending?

RedT said "financing" because that's the sort of way non-financial people (equipment providers) refer to any kind of money.

It could just as well be equity. i.e. they could be looking for full funding for the whole thing.

the Germans are just developers.

Agree, the only exposure RedT have is if they fulfil an order that hasn't been funded, which they won't do fully anyway as they will no doubt request milestone payments.

"The first phase projects are fully developed, ready for financing, with planning approval, grid connection and approval to supply Secondary Control Reserve (SCR) to Germany and Austrian markets. "

Planning approval - tick
Grid connection - tick
Approval to offer grid services - tick

Those things are all satisfied. The project is therefore 99% of the way there in terms of what's required for it to be funded.

I don't even care who the Germany counterparty is provided those things are satisfied.

The Germany counterparty's credit worthiness MAY become relevant when considering the future 620MWh of projects.

I too cannot comprehend why this is so difficult for anyone to grasp, particularly Bolgas.

RedT are bringing the Finance. All that means is that there's someone who has developed the projects (the German company), an equipment provider (RedT) and the financier (the person who is actually going to fund this).

Loads of people will be interested in funding this. Their availability of funds is what counts the most and by very nature of them providing funding they are their own risk. RedT has some risk that that money won't be forthcoming but they won't build any projects unless they are funded so very little risk.

The funder has a risk on RedT going bankrupt so it's them who need to do the major credit checks.
The funder will also buy project rights as part of the acquisition of an SPV which owns these project rights and assets.

This is project finance 1.0.

If you did any DD on any company involved in any project I've worked on (a lot) I would not expect any of them to have a decent credit rating anyway. They are SPVs set up to do one thing. If I am buying some project rights from this German company or anything other company, all I care about is the project rights. I couldn't care less about the credit worthiness of the developer. I DD the project, not the developer. They can go bankrupt whenever they like as far as I care.

The above is all assuming that there isn't some sort of off take agreement with this german counterparty, which I don't believe there is. If there was then obviously then I'd care about their credit worthiness.

That's very interesting, Murdo. So the LSE forum was actually mentioned then? As were the questions around the AD asset now being owned by Directors? Did anyone ask about the Camco sale?

Of course he will continue. The weirdest part is that based on some of his historic comments I'm led to believe that the management know him personally and know what his name is on here since it would never have been hard to put two and two together. Making some of the statements he has been making whilst the management know him directly seems fairly ball(ga)sy

Like pretty much any infrastructure project that's ever happened...nothing new is happening here. There is no complexity.

I don't understand what's difficult to comprehend about a third party financing this. It's very, very simple. I also believe that when they say "finance" they may not mean debt. An investor could be funding and owning these assets. There's a huge appetite to get in to this space for investors, particularly on a contract like this. I've seen investors funding absolute crap (which my team has rejected recently) with appalling project docs just because they are desperate to fund some batteries. From the high level info I'm aware of investors will be jumping over each other to fund something like this.

Thanks. I don't see why this is necessarily bad news, particularly in the short term. It incentivises the management to make the share price rise so that that they can profit. This is pretty standard isn't it?

I'm confused about the option. Is this an option to buy at 4.5p? or is it an option to sell (shares which they've just received) at 4.5p?

My initial questions are:
Why did you fund raise at half the share price?
It seems that the CFO is pretty chuffed with his effort of raising money with no regard for the price it is raised at.
When is the next fund raise? I suspect this is around the corner. Of course they won't answer this.
Why are they struggling to get a large deal done? When will this actually happen?
Why does the CEO earn such a high salary? What are his performance targets?
Can we please have monthly updates on sales progress rather than the bare minimum.

If I didn't have a working relationship with them I'd definitely ask. I have asked probing questions before at meetings with a number of the senior management and they are met with a lot of defensiveness and deflection (they also don't know how to answer because I'm asking them about things that clearly only a shareholder would have an interest in). Unfortunately when you're trying to get something done with them it probably wouldn't get me anywhere to go down those avenues, but I would love to hear what they have to say. Someone please do ask!

Yes, the UK. It does all appear to be painfully slow. The other issue is timing. If you're a behind-the-meter project and you miss installation pre-TRIAD season it makes more sense from an IRR point of view to wait to install for the next TRIAD season, ignoring the affect of other revenues (like FFR) potentially coming down. Trying to get comfortable with justifying a financial model which excludes TRIADs and FFR (i.e. is arbitrage and balancing mechanism) is the current focus for everyone involved. That's not that quick. They don't have an easy task.

I have another share which was consolidated a while ago and I have to say that as soon as it happened the price fluctuated far less, which is frustrating given I want it to rise (obviously). It seems like there is more resistance for it now than before. I can only imagine it might be a psychological thing where investors see it as more expensive (which is obviously nonsense) because I see no actual justification for why it could be the case. I hope that isn't the case here.

In my job (in renewables investment and these days focusing mostly on batteries) I regularly meet all sorts of different people from across the value chain. Recently, and on many occasions, including as recently as yesterday, I have been asking people if they're thinking of flow 'machines' and who they would consider. Almost without fail everyone (including many people/companies who have already developed/constructed/owned lithium ion battery projects) now says they believe the future of the battery market is flow machines and that they are considering them very closely. I mention the potential equipment suppliers to gauge where Red are perceived in the market and without fail everyone says they are focusing on RedT's machines. It really seems that the market believes in this sub sector and also in RedT, it's just extremely frustrating that everyone I speak to seems to be 90% of the way there but is struggling to get that final 10% of commitment required. I think a lot of that is down to the uncertainty of revenues and grid services. As soon as this is clarified and structured properly from National Grid I believe the orders will roll in quickly (assuming that Grid's input is positive, which I believe it should be given what Grid actually require).