React Energy Share Discussion Threads

[troutisout] 03/7/2015 17:59

Well the RNS confirms shareholders and creditors have said Yes, the examiner feels a viable business will come out of this scheme of arrangement, now just need the High Court's judgement. Same time Monday?

Trout.

[troutisout] 03/7/2015 08:54

The Company was suspended at 11p and the market cap then was £3.37m.
With all the creditors paid off with equity at 11p (the indebtedness to creditors being turned into equity is €3.94m), when relisted the company would be valued at £6.18m at 11p. This is speculative, but as all the debt worries would be wiped out, it is also entirely possible.
They still own plenty of permitted or ready to construct sites, 8 wind turbines in Ireland, 5 projects for Green Door (already got £3m finance from Equitix SPV in place), Newry for repowering, possible equity deal on Enfield and Clay Cross planning decision expected soon.

Many projects been written down to bare bones, eg Green Door's £1.5m goodwill written down to £3k, it is worth a lot more than that.....

So with the decks cleared and a bigger strategic investor involved maybe they can do something this time round?
I still expect some to sell out and recover what they can, the creditors are mainly tied in for 12 months, but there are a few PIs on the register.
Obviously warrants and loan note conversions are priced at 11p and 10p so not far away from the share price when last trading.

Trout.

[troutisout] 03/7/2015 08:21

Naïve probably, but they also probably thought that financial close was imminent and therefore the rent attributable to REAC would be short lived (rent was to be paid by financiers after financial close, with REAC getting all development costs back at that time as well).

The guaranteeing of rents by contract is not that unusual.

I was more concerned by the Company's response, their communication with shareholders and ultimately the size of the Company.

It was too small and lacked the clout to fight it's cause, it was spread out too thinly as well with all these projects in development stage and not a lot of income coming in.

The new investor has a lot of clout and will be able to drive projects forward.

We will see if part 1 and 2 of the process happen today (probably RNS after close of business regarding the shareholder and creditor votes). Part 3 is the High Court judgement on Monday.

[timbo] 02/7/2015 01:27

I'm amazed at the naivety shown by the BOD and what must have been a pretty shoddily drawn up legal agreement. Perhaps they should review their present arrangement for legal services!

[troutisout] 01/7/2015 23:47

Newry will be the first biomass project to be worked on, a repowering with new technology will cost £8m, this will be possibly funded by £4m debt (8 year term with 10% coupon) and £4m equity.

They say there has been a lot of interest in financing this repowering from Pension funds, the technology provider and other financial co's that have had a relationship with React previously.

Newry could be up and running within 12 months.

[troutisout] 01/7/2015 23:34

Currently, the Company and Foresight have agreed to cancel legal proceedings against each other, Foresight have agreed to accept shares at 11p for rent up to November 2014 and not hold REAC liable to their rent guarantee of £54k a month since.
In return REAC has agreed to the revoke the lease, in an effort to start non-confrontational talks with Foresight.
The investor believes a deal can be done with Foresight. REAC had spent £2.8m on Enfield and as they have agreements, permissions and the grid connection agreement in place in the name of Enfield Biomass Ltd, they are hoping they can use this IP to work out an equity carry in the new consortium.

It is very clear that Foresight's tardiness caused the financial plight of React Energy and saw a strategic investor pull back from a deal. Not quite sure why or how a fund given money by the Green Investment Bank can work in this way, their remit is to invest in clean energy projects not become landlord and then screw the energy company with massive ongoing rents. The collaboration agreement stated that rent was due until financial close and then the consortium of financiers would pay the rent going forward. Foresight were the landlord and also in charge of getting to financial close, if not a conflict of interest, then no worries about the speed of getting financial close as they were being paid a handsome rent and ultimately then revoking the lease (still React helped them purchase the land from the previous owners so only have themselves to blame, the rent more than doubled once Foresight owned the land???)

[timbo] 01/7/2015 22:55

Well spotted Trout! Still unclear where we are left with Enfield. Do Foresight still get to play silly Bs with us - couldn't find any mention of that moving forwards..

[troutisout] 01/7/2015 22:50

Oh also good to see this,

"From August 2014 React Energy Plc signed Heads of Terms with a strategic investor (EBIOSS Energy AD, a company listed on the MAB market on the Madrid Stock Exchange) for a technology transfer and funding in the sum of €6m over 2 years."


So my witterings from research I had conducted weren't far off, however they are not the new main investor, but they are down as potential technology providers (EQtec) and also a potential source of project funding.

[troutisout] 01/7/2015 21:16

Is there anyone still following this?

Looks like it could be back from suspension soon, need a positive vote from shareholders and creditors at Friday's meetings and then agreement to the scheme of arrangement by the High Court in Dublin on Monday.

Nuts and Bolts of it are creditors would get a debt for equity deal at a price of 11p with orderly market tie in (mainly 12 months).

We have an investor willing to be part of React, they and Altair will receive an equity kicker and related funds will receive a large amount of warrants exercisable at 10p.

The main investor holds varying interests in 17 renewable energy projects with a total value of £155m.

FBD will see their convertible loan converted to equity at 11p.

Dilution in the tune of 55% including FBD's equity (46% for the creditor's debt for equity). It is clear though that the share price was much reduced prior to suspension due to debt worries, these will now be cleared.

CEO to remain in post but other Directors to resign in orderly fashion and will be replaced by representatives from the investor and Altair and an independent director.

This examination has been done rapidly due to the need to try and keep the AIM listing, which they have had extensions to (should have been delisted 6 months after suspension)so if all goes to plan REAC will keep the listing.

The debt problems were mainly due to Enfield rent accruing and yet Foresight kept failing to come up with funding for financial close, meaning they kept collecting more rent as the timeframe was stretched out.

The investor is keen to be part of the development of all React's current projects.

Out of what seemed the end, there may rise a phoenix....

Trout.

[troutisout] 05/5/2015 13:04

Here is some more info on Ebioss, click on the plan for 2015-2017, it is a long but good read, particular attention to pages 29 and 38, also note their accounts published the same day and lots of references to wanting to dual list on either Paris alternative market or AIM in UK.

[timbo] 28/4/2015 11:38

So you only have 291 shares?! Think you might mean 100 billion!

[troutisout] 28/4/2015 09:07

According to my Barclays account the REAC bid is now £342,968 per share and I am worth not far short of £100m, with the share suspended will anyone buy my shares off me for that price please??????

LOL!

[timbo] 20/4/2015 09:10

Good work Trout, thanks for sharing it.

[troutisout] 20/4/2015 09:00

Please DYOR, I found the link to EBIOSS when going through the Clay Cross planning documents and saw the gasifier specified was an EQTEC gasifier (not Nexterra as Enfield), remembering they had mentioned a new technology provider that could also be an investor and from there worked it back to EBIOSS.

Trout.

[troutisout] 20/4/2015 08:41

Obviously still some horse trading going on, but we should start to see something shortly.......

[troutisout] 20/4/2015 08:35

Important bits from above,

"In the month of April last EBIOSS Energy has reached an agreement with the
bank Crèdit Andorrà Group for the creation of a vehicle
Luxembourg collective investment that is intended to invest in
Waste gasification plants based technology EBIOSS
EGT EQTEC Gasifier Energy Technology mainly in Italy, Bulgaria,
Germany and the UK, and subsequent development path in other
intercontinental markets."

"Among the projects of others, this business plan incorporates two projects
UK with a high probability of execution for 2015 and 2016. They are in a
very advanced stage of negotiation and the company expects to announce soon
several important facts about it"

Now bear in mind this report was from last September, you can see this has been worked on for a long while now. However the fly in the ointment is that Foresight would be pushed out, fine that is business, but hold on we helped them purchase the land....ooops how do we get out of that one???

[troutisout] 20/4/2015 08:25

Well regarding my post 122, I spent a little time translating some documents and am still convinced the funding and technology provider will be EBIOSS, however something has been holding up the negotiations and I think that is the Enfield site.

The recent loan notes to Farmers shows they are still in the game for the Newry site. It is obviously close as the AGMs were called and then postponed, I think they need the deal before an AGM (maybe even an EGM with other resolutions?).

Anyway have a look at these for further insight, EBIOSS have added far more dots than REAC have to be joined up by those digging hard.

[timbo] 20/3/2015 08:39

20 March 2015REACT Energy plc("REACT" or the "Company")Issue of unsecured loan notes in Newry Biomass LimitedREACT Energy plc (AIM: REAC), the energy infrastructure developer and operator which focuses on the production of clean energy in the UK and Ireland today announces that Newry Biomass Limited ("NBL") the joint venture company equally owned by REACT and its major shareholder Farmer Business Developments plc ("Farmers") has approved the issue of GBP5,702,523 of loan notes ("LNs") to Farmers. The proceeds from the issue of the LNs will be used to repay in full borrowings owed by NBL to Ulster Bank Limited amounting to GBP5,425,000.The issued LNs are interest free and are redeemable on 1 November 2026. As part of the joint venture agreement between REACT and Farmers, while both parties have a 50 per cent equity interest in NBL, the right to share in profits generated by NBL are calculated by reference to how much capital each partner contributes to the project. Following the issue of the LNs, Farmers are now entitled to 51 per cent. (increased from 8 per cent.) of the economic benefits deriving from the project and REACT is now entitled to 49 per cent. (reduced from 92 per cent.) of the economic benefits. NBL owns the 4MW Biomass advanced gasification project located in Newry, Co. Down, Northern Ireland. The project is currently on 'care and maintenance' pending additional funding required to engage a new technology provider. The Directors believe that the repayment of the Ulster Bank borrowings (which included a first charge on NBL's assets) will significantly improve the ability of REACT and Farmers to source the 3(rd) party funding required to re-power the Newry Biomass project.Farmers is a substantial shareholder in REACT (as defined in the AIM Rules) and as such the issue of the LNs is a related party transaction for the purposes of Rule 13 of the AIM Rules. The Independent Directors (being the directors other than Dermot O'Connell), having consulted with Shore Capital and Corporate Limited (the Company's nominated adviser), consider that the terms of the LNs are fair and reasonable insofar as shareholders of REACT are concerned.Funding discussionsFurther to the announcements on 1 December 2014 and 13 January 2015, REACT continues discussions with potential providers of finance to enable the lifting of the suspension of trading in the Company's shares.

[troutisout] 16/3/2015 08:46

Well the first resolution is to accept the accounts, which we haven't seen yet so don't know how anyone can vote in advance to accept something they haven't seen. On the other hand if they have accounts to receive and accept are they now at a stage they can publish them and come out of suspension.

This still stands around Foresight negotiations and the new Investor coming onboard.

[topbanana1973] 16/3/2015 08:04

This Friday is the AGM. What is the expectation good or bad? This is one of the most frustrating parts of this game when months on end you don't get the info

[topbanana1973] 26/2/2015 07:49

AGM announced on the 20th. But no sign of suspension lifting. Fingers crossed. No news is.... NOT