SPV13 Jun 2019 22:34
As explained by the Company, the Special Purpose Vehicle or SPV will offer third party investors (probably through high interest debt) an opportunity to profit from GTW projects. The very fact that MFDevCo is described as a “carried interest” partner suggests that the SPV will be a limited partnership and not a JV company. Any carried interest accruing to the MFDevCo 30% will only crystallise after all the debt is settled from revenue. Yes, they have said that MFDevCo will manage any invested project, but there is thin gruel from project management activity, cost plus 5%, plus risk of cost overrun loss.
The third-party investors will be asked to “buy” each project once it is investment ready. So far so good. Seed capital is “indicative” and so not assured.
To be investment ready, a project will have to have a development plan, an environmental assessment, OGA approval, and if power is to be exported to the grid, a planning approval. All those things will have to be published to the public, just as with the TIGRE project.
I do not see how any investment can be committed by the SPV without all those public preconditions being met.
So, the idea of “news of a deal any day now” is pie in the sky, surely?
And as many have pointed out, cash is a big issue and a significant placing might be necessary to pay for the approval process over the next six months. If the contemporary reports from the January AGM are correct, Damian was desperate to get approval for 75% of MC to be placed, and he has approval to do it, despite the attempts of LTH to stop it.
If this comes good you will be able to invest with confidence at leisure and make good money. That is my reason for following the stock; if not, the crowded exit will be a total crush disaster. So why are the big holders pumping it? Because they are simply too far from the exit door IMO.
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