Where are this lot getting the NAV from. Out of a hat? |
Hmmm...
Net cash proceeds of $34.5m from asset sale.
RCF balance outstanding is $32.5m, with $12.7m cash on the balance sheet.
So... RCF is paid off and company has $14.7m of cash. That's about 10 cents per share of cash.
Maybe there are more advisory fees, etc. to be paid out of that cash. But that little detail might be lost within the overall NAV reduction.
Anyhow, a 53c NAV = $73m. Take out $15m cash and you're left with $58m of gross asset value from the Texas windfarm and the California solar farm. Previously I'd said that those two assets cost $75m and I thought that $50-60m would be a conservative outcome from a sale.
50 cents per share looks more than achievable to me. Whether the risks and other transaction costs make it worth buying this at 37 cents is another question... DYOR. |
I might be interested if it hits the autumn lows, but would need to spend time on something I have not thus far examined at all. |
Lots to spend my Friday digging through. Not sure where the ECHO tax credit money has ended up.
The headline does indeed look terrible - a NAV reduction from 65c to 53c. But the RCF is repaid, so no more interest payments. And the "investment manager wants out" isn't great for running a patient sales process to maximise value.
But I'd always had a better handle on the remaining windfarm and solar farm assets, but didn't have a clue what the "distributed solar" was worth. (I think that includes the solar assets where rats ate the cables. lol) Obviously we are indeed getting confirmation that they were rubbish.
With that now known, my 50-100% upside now looks capped at 20-30%. DYOR. |
Solar farm disposal; but NAV reduces from 65c to 53c!
I had the good fortune to sell at 31p & 32p....so will look to re-join should they fall back to previous lows c25p. |
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. |
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. |
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. |
Nearly at break-even, having averaged down a couple of times.
Now all we need is some good news on asset sales... |
Indeed. Makes a nice change. There's been a few trusts buying in here recently |
Nice to have some blue in my portfolio! |
something is up here. I'm being offered a decent price inside the spread to sell in size. |
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... |
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... |
A few large trades went through yesterday afternoon. I wonder who did the buying and who's crystalising their large losses... |
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..." |
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". |
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..." |
 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... |
Many thanks - I've picked up a few |
Indeed; and made a small top-up on that AVI news. |
Looks interesting; have you bought any Skyship? |
Yesterday skyship. Check the RNEW news. |
craigso - when did AVI declare a stake? |
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