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From the half year results:
‘BIO*Asterix revenues were $0.1 million for the first half of 2022 compared to $0.0 million in the first half of 2021 and $0.1 million in the second half of 2021. These revenues are for Itaconix products that are sold to specialty chemical producers to use as intermediates or components in their ingredients. The Company has initial sales into ingredients used in sustainable leather and expects attractive growth as current customers gain traction and new potential customers begin production trials.‘
Feb 27 was just when the order was completed. It was likely given in December when the loan was agreed. Large after hours sells have accumulated since then. Now the selling has stopped, we should see the SP rise steadily as there has been good demand for the Altair shares over those 3 months.
Eqtec announce 2021 results release on Monday 25th April … https://twitter.com/eqtec/status/1517387890052976640?s=21&t=fkINOvoEmj1Z9sTLwdA_Cg
Biom has a current market Cap of £8m with revenues of c. £6m. On the company’s current projections, it has cash for a couple of years with no debt and expects revenue growth of 30% in the dominant bio plastics division in 2022. A risky bet but it wouldn’t take much sales growth for it to reach breakeven over the next two years given its gross profitability.
Great analysis Dersack. I’m not an accountant and this is pedantic but will it count as £3m revenue to Eqtec?
Assuming the Billingham SPV was valued at zero before the transaction, its new value to Eqtec is 46% of the £5.55m valuation the KIBO £3m for 54% investment implies. In other words, isn’t the new value of the partially owned spv to Eqtec c. £2.55m?
The concern is less that the SPV is worth less than we thought and more that if Kibo (as majority shareholder) mess it up, we won’t be able to realise some of the revenues from tech sales and O&M. If our spvs are our customers, we need them to be in a position to buy from us. The market might be nervous that a Kibo led spv won’t be as good a customer.
Having said that, they will only be majority shareholder for a short period. At some point very soon, a bigger player will come in to make the main investment into the plant. All we need is for KIBO to not mess it up until the main partner or partners arrive. That feels like quite a low risk and the market is probably overestimating it.
http://biomassmagazine.com/articles/18321/uk-to-launch-fourth-round-of-cfd-energy-scheme - hopefully a fair bit of money will flow into the UK projects from these pots.
On Kibo, whatever the equity investment, the spv will need to buy the land from eqtec. I can’t see eqtec selling the land on to the SPV at a loss, so they will effectively recoup 54% + of the price of the land when all is said and done.
Market doesn’t seem to like it but maybe will in time.
So … failure of a monitoring component at Ashland led to both reactors breaking beyond repair. They are considering moving the unused reactors from Lumberton (no news on the permits there) to Ashland to get things going again (presumably using a reengineered monitoring component?!).
They are also working to reengineer the reactors and upgrading them to produce 70k tonnes per year each from 35k now. Good news if each new reactor isn’t too expensive as that would take total production a lot higher at existing facilities. 140k T total annual production could generate a fair bit of profit. What is the gross profit per tonne again?
Back at the fundraise in May, a few of us were saying that it took AFC around 4 months to get its big boost after it raised £30m. For us the equivalent period is the next four weeks. Fingers crossed we follow a similar pattern and end up at 5 times the placing here too
Copying and pasting from EQT COO via Twitter:
‘Imagine having three or more @eqtec co-owned and managed Market Development Centres by end 2022, continuing to demonstrate Advanced Gasification Technology excellence operationally and commercially.
Italy MDC...tick; Croatia MDC...tick; where to next? #ipccreport‘
Rod Rod, here’s the relevant section. A bit of both??
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The JV acquisition of the SPV was funded by the Company via a €550,000 loan and a €1,650,000 10-year loan provided by a third party. Both loans are intended to be converted into privately placed bonds to meet local corporate requirements; and
Yes. Good point Aandi. The JV is receiving the loan to fund the acquisition prior to financial close and investment by third parties. Whether EQT is providing the loan to the JV is unclear but either way the loan serves to get everything moving which de-risks the investment which probably allows EQT to retain more project equity after financial close.
My guess is that EQT is the provider of the loan because if it wasn’t, why would they need a further financial close (they could just run the project on debt without a third party investor). Now the investor comes in and pays EQtec back the loan and the capital costs of recommissioning.