Ecofin U.s. Renewables I... Share Discussion Threads

[craigso] 28/11/2024 11:01

Yes, the project has reached completion, qualifying the project for the tax credits from the IRA. Those tax credits have been sold to Monarch Private Capital for an unspecified amount.

At the same time, the project reached financial close on a $15m non-recourse project financing of these assets. So that money will flow up to the holding company and pay off part of the RCF and provide some more working capital.

The new RCF might not specifically say that dividends / capital returns are prohibited, but that could have been a handshake deal for the extension. I'm not sure what RNEW needs to distribute to shareholders to maintain its investment trust status, however - so a blanket ban on distributions might not have been written down.

Hopefully with the first asset sale the RCF will be repaid anyhow. So I suspect that all parties are relaxed about it.

[cc2014] 28/11/2024 09:02

I cannot say I fully understand the RNS but my interpretation is that the project has reached completion, they've now received the cash which is probably around 25-30% of the project value for the tax equity (inflation reduction Act)

All this meant they could get a fixed term loan against the asset at a lower rate than the RCF.

Which I'm guessing means the RCF has been reduced from about $30m to say $15m which gets the RCF lender off their back and they now have a bit more cash in the bank for working capital

I assume the RCF lender wants all their money back and it won't be until that is done that dividends or capital returns can start.

[craigso] 28/11/2024 08:33

A bit of good news today.

Tax equity for the Echo portfolio has been received - although it doesn't say how much - plus $15m of non-recourse project financing essentially allowing for a substantial repayment of the RCF.

[craigso] 15/11/2024 10:32

Nearly at break-even, having averaged down a couple of times.

Now all we need is some good news on asset sales...

[hugepants] 12/11/2024 17:33

Indeed. Makes a nice change. There's been a few trusts buying in here recently

[skyship] 12/11/2024 16:33

Nice to have some blue in my portfolio!

[cc2014] 12/11/2024 15:50

something is up here. I'm being offered a decent price inside the spread to sell in size.

[craigso] 08/11/2024 14:41

AVI has taken their stake above 10%. I suppose with RNEW on a $50m market cap, these funds do need to buy substantial stakes for the investment to be relevant to their own portfolios.

I still don't know where they're getting their shares from though...

[craigso] 25/10/2024 07:57

Looks like it was MIGO taking their stake above 5% as well.

It is certainly comforting that all of Altimas, AVI and MIGO want to add to their positions at these share prices...

[craigso] 23/10/2024 10:47

A few large trades went through yesterday afternoon. I wonder who did the buying and who's crystalising their large losses...

[craigso] 21/10/2024 12:31

RNS confirming the rollover of the RCF - seemingly without any painful modifications. Now on to the "first sale of assets under the Managed Wind Down..."

[craigso] 14/10/2024 08:00

Another RNS for Altimas increasing its stake. I wonder which large shareholder is selling at the bottom??? A 7-8% stake has found its way to AVI and Altimas without moving the share price much...

Anyhow, just waiting for news this week of the RCF being rolled over. And I'd be willing to bet that Beacon will be "the first sale of assets under the Managed Wind Down".

[hugepants] 11/10/2024 09:06

50% from here looks distinctly possible but the timeline is guesswork. I suppose they have spent the last year trying to sell stuff so there's a good chance they have buyers lined up for some of the assets which they imply in the results;

"...The first sale of assets under the Managed Wind Down is progressing and assuming a transaction is agreed will be announced in due course and will be subject to shareholder approval of the Managed Wind Down..."

[craigso] 10/10/2024 11:07

Bought more shares today, based on a morning of going through the financial statements and company history.

RNEW has $30m of holdco debt - the rest is non-recourse project finance and is of no concern. (that used to be my day job) The RCF does need to be rolled over this month, but I wouldn't expect that to be a problem - the bank will of course take advantage of the situation to bump up the margin but there would be no point taking them to bankrupcty court just to do the exact same thing (sell assets and repay RCF first).

The Texas windfarm originally cost $50m in 2021 (debt free) - it could surely be flogged for $30-40m once back to full production. The Beacon solar farms in the Mojave desert cost $25m, and the other half-partner is a Softbank-backed entity with deep pockets who wants to build BESS on the site. Easy to see $20m+ coming out of there.

Just from those two assets, RNEW could end up with $20-30m cash after repaying the RCF vs. a current market cap of $50m.

For the rest of the portfolio, the advisors have spent a year talking to other players about these assets. They surely have a very good idea of who is interested in what assets - maybe somebody wants the whole package of 100%-owned solar, especially with it all operational now. And the new 65-cent NAV must surely have been signed off by the Board and the advisors as achievable.

Anyhow, DYOR but I think this is a straightforward 50-100% return in 2025. Easy to see why AVI bought in...

[boystown] 09/10/2024 14:29

Many thanks - I've picked up a few

[skyship] 09/10/2024 13:47

Indeed; and made a small top-up on that AVI news.

[boystown] 08/10/2024 15:01

Looks interesting; have you bought any Skyship?

[hugepants] 08/10/2024 11:39

Yesterday skyship. Check the RNEW news.

[skyship] 08/10/2024 11:02

craigso - when did AVI declare a stake?

[craigso] 08/10/2024 08:42

Decided to top up my shareholding in order to average down. I wasn't planning to risk more money, but the announcement AVI taking a 5% stake gave me a lot of comfort. MIGO already has a stake, plus the US hedge fund with a big stake...

This trust has had terrible luck. But there's no reason to think they can't get a decent price for the assets when sold individually. Especially the Texas windfarm once the substation is back in service...

[2wild] 29/9/2024 18:12

May take 12 to 80 months to repay all debt, however with RNEW trading on around 50% discount to NAV. POtential 100% plus upside for the patient. By the time all Debt has been repaid, discount could be down to say 25%. All things being equal would give a 50% return by then. Of course, the discount could widen, although giving how much they've written down assets, just as likely to rise going forward. I am planning to start gradually averaging in, maybe £300 a month for 9 to 15 months. Could easily double my money in 3 years with little downside risk.

[hugepants] 10/9/2024 10:29

They had "leverage" at 38.6% at end of last year. It must be well over 40% now with the nav write down announced yesterday

[gregatimb] 10/9/2024 10:26

You and a few others today based on volumes. I'm sitting on rather large loss on these so think I will wait it out and hopefully recoup some of it eventually.

[hugepants] 10/9/2024 10:08

I sold my pretty small holding yesterday at a loss. Managed windup is not attractive when the gearing is 35%-40% as it is here.