Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
https://twitter.com/robinnewton4mla/status/1197870365499953155?s=21
Speedy, my thoughts exactly.
Amazing if it’s sorted much earlier than the backstop. No way would the NI gov and BDO allow the transaction to go ahead after due diligence if there wasn’t a robust plan in place.
https://twitter.com/leesadee_imagee/status/1193076393103503360?s=21
From Leesadee on Twitter...
I believe the asset purchase agreement to purchase Harland & Wolff was signed last night. Delighted for the workers & the job security this provides
I thought this was the case. It’s not ideal, but if it saves 15% of all future project costs and means we retain more equity, it will be a master stroke. I can’t see BDO or the NI government signing this off after all the due diligence to have the same problem in 12 months time.
http://www.allenbycapital.com/research/research-infra_16_429119999.pdf
I’m keen to hear the views of Infa stalwarts; Setanta, Dawski and Spud.
I’m going on the value given in the RNS. ‘The Acquisition cost is a substantial discount on the valuation of the Assets of around £11 million.’
I agree. The assets purchased are worth nearly double what we paid and it will speed construction by 5 months, whilst reducing capex by 15%. Plus the priceless PR that we will now get for saving an NI heritage institution
They’ve finally settled on their equity partner - no mention of debt partner....likely to be Vitol who were happy to offer both.
Also an update on the FSRU to come as well.
Great post Setanta, as ever.
If the FSRU project is viable Infa need to have funding in place for the end of the 3 months exclusivity period in September. It appears Vitol have requested Infa pursue this, so could be fully funded by them. September/October is when we are likely to get an update on the EU money along with Debt/Equity. I think Vitol are part of the discussions, particularly as one potential investor wants to absorb the Debt and Equity.
I agree the Marine Licence is just noise and DAERA seem to have challenged some of the protestors claims at the meeting Infa hosted with them.
I’m less sure on how the manipulations work and it will be interesting if anything significantly changes when SiC step down. Does anyone know the timeframe for this?
Interesting times ahead.
I agree with Tango1 and let’s not forget, we are talking about financing 7, not the original 2 caverns. Slightly more money to factor in and there is now clarity over the long-term demand. JW won’t care about short-term holders as he’ll know they will sell on a spike anyway. It’s painful at times, but I believe patience will be rewarded. I met him in Leeds and was very impressed. He clearly doesn’t know how to work AIM, but he’s after a bigger prize.
No problem, JW was clear his preference was upfront.
Hi Kibuc, I previously shared my notes from the investor evening in Leeds. I’ve gone back to them regarding this point. JW insinuated it would come in as cash at PLC level and be used to fund new projects. The section from my notes is below: Investment to date will be recovered in full, in one block or in instalments, dependent on the chosen offtake partner. The investment to date is currently confirmed at £14.5m, but likely to be slightly higher. The funds will go straight into the PLC along with €1.6m EU funding and any fees for construction management - all debt sits at project level. Cheers Ban
My notes from the Leeds Investor Evening to ensure clarity for all investors.
Main catalyst is offtake, equity and debt will follow quickly after. JW admits his credibility is on the line and his full focus is on this deal. There is no delay on these key aspects even if a deal for 7 caverns is converted - this has been driven by the partners and not Infa. 12 year term currently discussed, but Infa are driving for 15 year term. Arun has spent this week with lawyers to negotiate this through. It sounded likely that this is why it has been delayed. It will be announced when signed and will not wait for a 7.00am RNS if all in place.
New Chairman will be appointed in 2 months, once key catalysts have been converted first - offtake and equity. JW has spoken to a few high profile candidates that will be able to guide Infa to the next level. The offtake and equity need to be sorted first to show Infa is serious and can deliver.
Investment to date will be recovered in full, in one block or in instalments, dependent on the chosen offtake partner. The investment to date is currently confirmed at £14.5m, but likely to be slightly higher. The funds will go straight into the PLC along with €1.6m EU funding and any fees for construction management - all debt sits at project level.
No need to submit another ITT tender for the 7 caverns as already asked as part of the original tender process.
Income generated early next year - Q1 2020 through a project management fee.
FID = offtake, debt/equity and EPC - marine licence not a component part of FID - offtake and equity partners are not concerned and not part of the discussions. JW mentioned contingencies in the unlikely event the marine license was not awarded. Brine dispersion well below levels that were documented in the draft marine licence - all conditions met and fulfilled - no concerns with this. Next meeting with DAERA in 10 days - consultation will then follow. JW has a very good relationship with them as Infa have gone well above expectations, even a 3rd party analysis of all the tested samples.
FSRU potential project a key driver for offtake partners and will support with the investment to deliver this. Feasibility study currently taking place.
Feasibility study for 15+ caverns just completed by Evan P. The results are very favourable and JW seemed happy with how it’s progressed
New salt cavern opportunity in mainland UK, although this is very early days.
Very frustrated with SP and are in a closed period, so can’t take advantage or influence.
I hope that helps
Ban
Nothing new, just clarity. The potential deal for 7 caverns was never described as in place. Indicative was highlighted in bold and nothing actually has changed and/or leaked.
Investment to date will be recovered in full - currently confirmed at £14.5m, but likely to be slightly higher. The funds will go straight into the PLC along with €1.6m EU funding and any fees for construction management - all debt sits at project level, including any CLNS. Hope that helps.
Very reassured after tonight. Offtake is close and the key catalyst to unlock everything else. It’s at the final stage with legal teams - JW couldn’t give a definitive timeframe, just that they want to get the best deal for LT value. The 7 cavern deal is only indicative, and offtake, equity and debt will still be delivered in line with original assumptions.
The key take away for me is that the marine licence has NO impact on FID and we are well below all legal limits and the original assumptions that went into the draft marine licence.
Setanta, many thanks for your balanced views as always. A couple of questions if I may. You note the deal could be dilutive for shareholders, but it’s clear from the RNS any agreement would be at project level - why would this be bad for shareholders? Secondly, (and I agree on this) you note the SP won’t rocket initially and it will be a gradual increase. Given the current SP is significantly below the costs incurred to date (factored into the deal) where do you see the SP initially landing if FID is delivered and the full licence granted? I think there will be a contingency if the licence isn’t granted, but it would heavily impact any deal and a sale may be more desirable at that point.
We may get news in advance of the SMRI (Solution Mining Research Institute) technical conference in New Orleans tomorrow. JW is presenting a paper with Evan Passaris (Costain) on the project.