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Looks great. I wouldn't worry too much about the revenues. If it is only 0.5m, this means that the Italian project was closed in June, but the sales of 1,750,000 euros will probably fall in the second half of the year.
And the 1,750,000 euros, together with the 3,000,000 pounds from Billingham, are already more revenues than we had in the whole of 2020. Hooray :-)
Phil, did you read my quote til the end? I hadn't even considered the 282k anymore. I should have truncated the first one or two sentences to get i clearer. This was the core:
"the SPV will lease the land from Rotunda for a period of 23 years with a potential five year extension, whereby the lease fee (approximately £400,000 per annum) will be set up as a profit share agreement."
So far I have assumed that there is no need to buy the land, which makes the project much cheaper and easier to fund in early stages. Instead, Rotunda will provide the land and according to the old RNS, Rotunda should get 400k per year as a lease fee for it. "whereby the lease fee (approximately £400,000 per annum) will be set up as a profit share agreement."
And now they have set up such profit share agreement: Corresponding to the 400k p.a. Rotunda get a non voting share of the spv only for dividend purposes in order to get "the right to 20% of distributable profits".
I can't say how they define "distributable profits", but basicly this means: The SPV won't need loans to buy the land. And it won't need to pay for the lease of the land undtil they make "distributable profits". And if Rotunda accept 20% as compensation for 400k, the estimated 100% distributable profits should be more than 2m.
In my opinion, nearly 5 of the 15m revenus are already done. The 3m from Kibo are revenue and therefore part of the expected 15m this year. And the Italien plant is already at financial close. Besides tis I agree to Andy's points. We had a similar discussion in the "reds are buys" Thread a few days ago.
As most people here hopefully learned and understood during the past days: We neither buy nor build plats, so we don't need the money to do so.
And with several millions cash in the pocket from the fundraise a few weeks ago, three millions to come in short term from Kibo and 10m revenue before eoy should be a quite comfortable situation.
The Rotunda share is not a surprise. It is exactly what they described a year ago in the "Agreement for Southport Hybrid Energy Park Project" RNS (Mon, 7th Sep 2020):
"In consideration for the granting of exclusivity, EQTEC will pay Rotunda £100,000, which, should a transaction be completed, will be deducted from the final purchase price for the Project. The exclusivity runs for 12 months and can be extended by mutual agreement. The proposed purchase price for the Project is £382,000 (£282,000 net). In addition, the SPV will lease the land from Rotunda for a period of 23 years with a potential five year extension, whereby the lease fee (approximately £400,000 per annum) will be set up as a profit share agreement. Any such transaction will be subject to further due diligence, definitive agreements and funding."
Plus new proactive interview:
https://youtu.be/GZzKtXlsAes
Tame2017:
At the last two fundraises, the price was elaborated up for a week or two before the bomb dropped. Bringing the sp down to give more shares for less money would be a novum.
Besides this, I see absolutely no reason: we already had our fundraise a few months ago, we know we receive 3m from Kibo within the next days, and our BoD have confirmed the predicted revenue for 2021 more than once. So there should be enough cashe and there is more to come before the end of the year.
The map is just this one small slide that I have also linked. But it has it all. There are Greece, Croatia / Italy, USA (California), UK, Ireland, France and "UK and Europe" in the diagram.
We know about ongoing projects in all mentioned areas...
Except: FRANCE
So far I haven't heard of anything in France in the pipeline. Why is France explicitly mentioned here? Not Germany, not Spain, Poland ...: France.
The assigned specs suggest that projects may have already been identified there and possibly even further advanced. The slide says:
France:
- Feedstock: Industrial
- Offtake: Various
- Size 6-15 MW
Energy Transition:
- Centralised, customised plants
- Retrofit fossil fuel / hazardous waste sites
- Local employment / community clean up
It doesn't sound like an initial idea like "We could do something in France", but rather very specific.
In the last trading update EQT announced that Idex will review Billingham: "In July it is expected that this will be reviewed with potential funders, including French waste-to-energy owner-operator, Groupe Idex ("Idex")."
We also have our research partner University of Lorraine in France, about whom the same trading update said:
"In Q3, the Company's technical team expects to test several types of RDF material with its partners at the Université de Lorraine in France and then carry out Fischer-Tropsch gas-to-liquid tests in Q4, subject to pending health and safety approvals for the laboratory, which are expected in Q3. The Company is also developing relationships with a number of new technology partners, which it expects to announce in the coming months."
France is right next door. If you have everything you need in one country (experts, sites, investors), then you can bring people together even in times of restricted travel freedom due to Corona.
There already seems to be a collaboration between Lorraine and Idex that DP also likes:
https://twitter.com/davidpalumbo/status/1301428479045652480
This makes me think we will hear about some projects in France soon. Not today or tomorrow, but it will not take several years either.
And "retrofitting" would of course be a dream. That should be faster than building new from scratch: the infrastructure is there, the grid connection is there, and when it comes to the "environment" we are definitely always an improvement, probably eligible for funding. And maybe there is already an owner. So far it belongs to whom. Time is our money. Getting a project quickly done means our money can quickly work for us, elsewhere.
Just my interpretation. No recommendation. I may be totally wrong.
Simms, there are some things mixed up, so I try to answer as many of your qeustions as possible before I have to leave:
- "Haverton WTV Limited" is the name of the SPV
- "Haverton WTV Limited" does not own the land, yet. There is a conditional LPA RNS from February which explains the conditions.
- Kibo gets 6/11 of a nearly empty spv with an estimated value of 5.5m at a price corresponding to theier share. They get no land, no building. Just an an elaborated project and maybe some permissions.
- The 3m will surely be revenue
- Kibo have quite some (30+?) companies they own in part or whole. Better have a look at their y2020 Results RNS from June 2021. They know what they are doing and will bring the money.
- We don't maintain the land ownership and haven't paid the land. The SPV will buy it, once someone filled it with money.
- We are not diluted in any way: Our part is selling an Idea, IP, Equipment and O&M, not holding a part of the plant. Others will build and own the plant. If everything works perfektly, we'll not hold even one per cent, except maybe for controlling / insight purposes. Let the money develop new plants, instead. An interest of 10% p.a. is not what we are here for.
I expect there are other Investors in the background and that Kibo are a quick intermediate to get the spv out our books before it is filled with life and places a first order at EQT. Otherwise, we'd be selling things to ourselves due to consolidation rules.
And since they are in such a hurry, I expect things to get started at Billingham very soon.
The "Map" contains some nice surprises. For those without access to LindIn:
"EQTEC plc map to the future. Target business models for our Advanced Gasification Technology and the markets where we are pursuing them. Our growing network of JVs and go-to-market partners are helping us build opportunity, projects and plants to support the wide range of EQTEC applications."
Map to future image:
https://my.hidrive.com/lnk/iyBpFFUb
https://www.linkedin.com/feed/update/urn:li:activity:6845650198102859776/
https://twitter.com/davidpalumbo/status/1439849371772891140?s=28
Tonight I had a lot of time to think. Like my previous "The 3m deal, ..." posting, this is also only my personal suggestion and I may be wrong:
As we all know, the Billingham project is packed into an spv. For those who do not know what an spv does, I'd recemmend the wikipedia article:
https://en.wikipedia.org/wiki/Special-purpose_entity
If we are the controlling owner of the spv, we have to consolidate the spv.
Until now it was just an empty company, so there was no risk for us. This changes as soon as the company is filled with life, e.g. buying the land, ordering the grid connection, closing loan agreements and so on.
The ratio of 54,54% vs 46,46% is the same as 6/11 vs 5/11, so no magic numbers at all. Having only 5/11 ensures that we do not need to consolidate the spv once the show begins.
For more about consolidation, read:
German:
https://www.iasplus.com/de/standards/ifrs/ifrs10
English:
https://www.iasplus.com/en/standards/ifrs/ifrs10
And Why did it have to be Kibo?
The answer is quite simple:
We needed a quick solution and someone who was willing to take the risk of buying us out of our controlling position. There is a connection between Kibo and MNRG, so maybe DP just asked at MNRG if they would like to buy 6/11 of Billingham and they passed it on or recommended Kibo. In the end: Who cares? As long as they bring the three million pounds and take us out of the role of a controlling ownder asap. If they additionally can bring us to new markets: Even better. Since we haven't heared much from our other MENA partners for quite a while, it may be a good idea to have a second option.
And why all this?
If you read the Billingham RNSs, you will find that a lot of things, including the LPA, are conditional. They line up a little like dominos. One event seems to trigger the next and so on. To me it looks like this one was the final domino brick.
There are only three months left til the end of the year and only two more until the LPA ends, so I expect DP to trigger the first domino brick, soon:
=> Billingham may be imminent.
(at least in my eyes)
I think, some pi are here with wrong or different expectations how e.g. EQT will reach their predicted revenue and about the value of e.g. the billingham spv.
Re the 3m price for 54,54%:
Until now, the spv is a nearly empty hull with an idea, some permissions and a project. It is not worth the 170m some people talk about, it doesn't own the land and hasn't paid for the land, yet. And even if: the there would be a corresponding loan on the other side, so the land would not add value. Getting 3m in such an early stage should be ok. Specially if the agreement ensures that we are the partner of choice as follows.
Our gain is not to build and own the plant. Our plan is to sell our spvs in early stages to someone else who builds and owns the plant, as long as we provide
- IP
- Technology
- O&M
That is where we make our money. We live from installing and operating such plants, not from owning them. Best things to happen are projects like the Shannon plant, where we don't even need to initiate an own spv.
Holding a small part of a plant is ok to keep some insight, but not more. If aquisition is cheap, like e.g. for the refurbished plants, it is even ok to hold a bigger part. But I don't want millions of our cash locked in the ownership of power plants, then providing a profit of let's say 10% per year. One of my bigger fears e.g. is to have additional millions locked in North Fork to get it online, even if it means we own another 10% or 20%.
I want exponential growth with some better leverage and not an interest of 10% p.a.
People are always talking about revenue and targets. Where do the mourners think the revenues come from? From sales of power, gate fees, biochar? Not really. They come mainly from the points mentioned above: IP, Tech Sales, SPV sales, O&M. Besides the fact that we sell parts of our spvs, there is a simple fact, hardly anybody understands: Our spvs are our main customers.
By the way: For this year, we already have known revenues of more than five million Euros (€1,750,000 from the italian plant and £3,000,000 from the Kibo agreement).
That's the way we generate revenue.
And I am confident that we'll see more such revenue before the end of the year, even enough to reach the predictions.
I see this different, CB. We got more and more ducks in a row. The problem is:
People don't understand what DP is doing. They think EQT will build a 170m Powerplant out of nothing and another and another and so on. That is not what EQT are doing.
Until now, e.g. Billingham is a nearly empty spv. It is not worth the 170 millions some people talk about until someone puts many many millions into it, which we neither have nor can afford.
In my opinion, our part is not owning a 170m plant at all. Our Job is finding someone to build it, using our equipment, paying us for O&M, paying us for IP, ... We are not here to become full owners of an empire of power plants. That binds too much money. With exception of our two or three demo plants, we'll hold only a small share in each plant to keep some control.
We are not out there to sell ready to run power plants to energy companies. Energy Companies are not our customers.
Our (more or less) own SPVs are our customers.
That's why we have an own spv for every single plant. And that is why we can be pretty sure that our BoD can generate revenue whenever they need it.
I don't see us in line with the others mentioned and not as "international investors such as ...". They also wouldn't refer to us as EQT, but EQTEC in a legal document.
Guess they are talking about EQT group:
https://en.wikipedia.org/wiki/EQT_Partners
Come on, Trytrytryagain, DG12 never answers to anything. Why talk to it at all?
Haven't seen DG12 for quite a while and having it back is a good sign: The stock is popular enough again that it's worth spamming the channel over. I feared, the bashers and spammers had written us off.
davidblack, nobody can tell:
Since this is not built as a replacement for one of our own former plants, but as stated in the RNS, replaces "a decommissioned plant which originally employed an early gasification technology from a third party.", there may be tens or even hundreds around. Just let's get some blueprints redy to run.
"The site has further 2MW of grid availability and the Company plans to apply for additional PPA to further expand the Plant" ... So possibly even to be scaled up from 1.2MW to 3.2MW
That would be bigger than North Fork with less people on the table and without US lawyers. Additionally lots of money saving synergies as the land is already purchased now and some infrastructure would not need to be built twice.
What a fantastic RNS ...