React Energy Share Discussion Threads

[troutisout] 06/3/2014 10:09

Cheers ryan, I followed your attempts at getting some communication with the Company and it is indeed not good enough. Did you try calling the company or just email?
I don't know what you asked or what the answers were, but I can see that just before results and at a time where it was obvious they needed to raise more funds and were likely to be looking at an acquisition, that the answers could be, shall we say, obtuse.
I am hoping that Interims will shed a lot more light on the recent progress and that after they are published the Company will be a bit more communicative.

I have built up a decent holding now and had kept some back just in case we had a fundraising that led to a share price fall, I now feel confident that we are in a good state now and the acquisition costs in paper at 38p don't seem onerous and there is potential with the acquisition. They do have projects that are producing and not just a paper pipeline, every little helps here to build the MWs.

Good Luck,

Trout.

[colp54] 06/3/2014 10:08

Good story, shame about the management sums up REAC for me.

Haven't reduced as I still think it'll pick up considerably on Enfield news. My CTP holding is now quite a bit more significant than this - although it didn't start out that way...

[tomboyb] 06/3/2014 10:03

REAC - very surprising. I think someone sold a few at 25p 2x 50ks - so small overhang

[troutisout] 06/3/2014 09:44

Looks like the 2x 50k were sells,

You can buy 100k at 26p with Barclays now, MMs bought them at 24p and 25p, so perhaps a buying limit of 25p might get accepted.

Got to get on with other things now....

Trout.

[troutisout] 06/3/2014 09:31

ryan, have you reduced here to add elsewhere?
If so do you think you would look to invest back here at some point with profits made elsewhere?

Trout.

[troutisout] 06/3/2014 09:29

GGES must also see something to take shares at 38p rather than the current price, by adding more MW of production REAC are slowly building a critical mass, this is what they will be valued on in the future, the amount of producing MWs. GGES seems to be working in an area which is ripe for expansion and one where extra sites can be delivered far quicker than the larger ones.
Interesting that they are looking at more acquisitions to consolidate the smaller Biomass sector. If you believe this will be the future, then a Company that is building up at this time is a very good investment for the future.

Trout.

[ryan83] 06/3/2014 09:24

21p is mad to be fair!

[colp54] 06/3/2014 09:21

troutI suspect it's not too far away now.Previous RNSs suggest REAC have had to get their house in order with suppliers, contractors and users etc. Shoring up the finances could be the final hurdle they had to clamber over before they're able to close the deal.

[troutisout] 06/3/2014 09:09

colp54,
I agree totally, but I fully expect them to get that shortly, I wondered whether REAC needed to bolster their finances before Foresight agreed the financial close. Is the new funding enough to get that signed off?

With interims this month and today's news, it would be great to see Enfield news in the next couple of weeks.

I am going on holiday tomorrow so fully expect interims next week (it always seems to happen with my investments).

I suppose I can understand people waiting for Enfield news to buy in, but to be selling at 21p today????

Trout.

[colp54] 06/3/2014 08:58

It does appear they've ticked all the boxes, but they need to deliver on their Enfield flagship project.Until they do, all the other stuff could just be seen as smoke and mirrors.

[troutisout] 06/3/2014 08:42

I can't believe the lack of interest since the opening, this RNS has helped sort out the financing worries and given us an acquisition using shares valued at 38p.
We have Enfield financial close and Interims to come.
The low share price and lack of interest gives an opportunity to add more at these levels, I think this will be trading back up at the 40p level soon (so obviously, do the owners of GGES as they have accepted 38p).

[troutisout] 06/3/2014 08:08

Well the first thing the PR company need to sort out is the 'GBP0.38p' piece in there, it is not 0.38p it is GBP0.38 (which is 38p). They have just bought a company with shares and they worked it out on 38p per share.

"The Acquisition will comprise an initial consideration of GBP2 million for certain of the assets and business of GGES. This consideration is being satisfied through the issue of 5,263,158 ordinary shares of EUR0.10 each in the capital of REACT, to be issued at an effective price of GBP0.38p per share."

£2m/5,262,158=37.99p

SP at the moment is 26p and people are selling, LOL.

Trout.

[troutisout] 06/3/2014 07:57

ryan, cheer, up this looks very good and also solves the fundraising problem.

Holders that have been patient will be well rewarded.

Trout.

[ryan83] 06/3/2014 07:49

Yeah noticed that, fancy that PR!

[colp54] 06/3/2014 07:31

The notional .38p with a lock in sounds ok and they seem to have sorted out their working capital issue.

Also a new PR company on board - I wonder how busy they'll be!

[stockonomist] 06/3/2014 07:26

Price indicated of a notional 38p looks fine. Let's see what the market makes of it.

[ryan83] 06/3/2014 07:26

Well the acquisition is probably best for the additional expert management team lol

[timbo] 06/3/2014 07:23

React Energy PLC Acquisition and Issue of Loan NotesTIDMREACRNS Number : 6319BReact Energy PLC06 March 2014 6 March 2014 REACT Energy plc("REACT")Acquisition of the business of GG Eco Solutions LimitedProposed issue of secured loan notesREACT Energy plc (AIM:REAC), the energy infrastructure developer and operator which focuses on the production of clean energy in the UK and Ireland, is pleased to announce the acquisition, through a newly incorporated wholly owned UK subsidiary Grass Door Limited, of certain assets and business of GG Eco Solutions Limited ("GGES"), a developer and operator of biomass heat generation projects in the UK (the "Acquisition").Key Points:-- Today's news marks a key milestone in REACTs' group (the "Group") strategy to act as a consolidator of the fragmented UK biomass energy infrastructure market, andincreases the depth and experience of the management team;-- The Directors believe that GGES' strong pipeline and relationships in the biomass sector, combined with its already operational plants, positions REACT as a leader in the mid-market biomass power generation sector in the UK;-- Proposal to raise up to GBP1.5 million (before expenses) through the issue of secured loan notes to fund the ongoing development of the Group through organic and acquisitive growth; and-- The Board is currently considering a select number of further strategic bolt-on acquisitions in the mid-market biomass sector that includes biomass conversion plants from 500kW to 20 MW in capacity.Background on GGESGGES was formed through a Swedish and UK partnership, and has been operating in the UK market since 2009. It is the project developer, part-owner and operator of two existing biomass power generating plants in the UK and has five projects in development which are expected to be built over the next 12 months.The projects include:-- the Culford School heating plant in Suffolk, which has a 15 year Heat Supply Agreement ("HSA"), in operation for almost two years;-- the Kimbolton School Heating plant in Cambridgeshire, which also has a 15 year HSA, and was recently brought into operation; and-- GGES in November 2013, signed a 20-year HSA with Old Buckenham Hall School in Suffolk, with the heating plant expected to be commissioned in Q2 2014.GGES's projects typically range from 150KW to 1MW thermal capacity, use wood as a sustainable fuel source, and utilise proven, mature technology. The addressable market for the GGES solution includes over 600 schools and universities, over 10,000 private hospitals and care homes, and over 5,000 country house hotels in the UK. The Directors believe that long term HSAs and qualification for the Renewable Heat Incentive ("RHI") add significant value to GGES.In July 2013, GGES signed an agreement with Equitix ESI Finance Limited ("Equitix") providing GGES with access of up to GBP5 million of committed project finance from the Green Investment Bank and a number of institutional investors. Drawdown of this facility has already commenced in order to fund existing projects and it is intended to draw down the remaining facility over the next 12 months.Terms of AcquisitionThe Acquisition will comprise an initial consideration of GBP2 million for certain of the assets and business of GGES. This consideration is being satisfied through the issue of 5,263,158 ordinary shares of EUR0.10 each in the capital of REACT, to be issued at an effective price of GBP0.38p per share. An additional maximum deferred consideration of GBP1.7 million (also to be satisfied through the issue of ordinary shares in REACT), may become payable subject to certain performance criteria being achieved, namely construction and installation of additional biomass heat projects with an approximate Internal Rate of Return of 15%. The deferred consideration amount is linked to projects funded under the Equitix funding line, which GGES already has in place.As part of the transaction REACT will also issue 789,474 new ordinary shares of EUR0.10 each to Pinfold Investments Limited ('Pinfold") a company controlled by Lyndon Dodd a shareholder in GGES, which is converting a loan note amounting to GBP225,000 issued by GGES to Pinfold in relation to the Kimbolton School Heating Plant.The total initial transaction cost for the Acquisition, including the conversion of the Pinfold loan, is GBP2.3 million.GGES and Pinfold will be subject to a Lock-In agreement in relation to the ordinary shares that it will receive in consideration for the Acquisition or will acquire for a period of twelve months from the date of issue.The assets being acquired include the Kimbolton School Heating Plant, the Old Buckenham Hall School Heating Plant that is in commissioning and GGES's investment in GG Eco Energy Limited ("GG Eco") a company that is 30% owned by GGES and 70% owned by Equitix. The book value of assets acquired totals approximately GBP855,000. As at 31 March 2013 turnover in relation to the acquired assets was c.GBP290,000. Although the assets acquired are currently loss making, the Directors expect the acquired business to breakeven in the next 12 months.Key members of the senior management of GGES will remain with the business post completion of the Acquisition increasing the depth and experience of the overall team.Pursuant to the Acquisition, application has been made for the admission of new 6,052,630 ordinary shares of EUR0.10 each in REACT to trading on AIM. The new ordinary shares, which will be issued, fully paid, will rank pari passu in all respects with the existing ordinary shares of REACT. Admission of the new ordinary shares to trading on AIM is expected to occur on Tuesday 11 March 2014.Following the Acquisition, REACT's total issued and voting share capital will comprise 28,422,674 ordinary shares. Shareholders should use this figure as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in REACT, under the FCA's Disclosure and Transparency Rules.Following the Acquisition, GGES will hold 5,263,158 shares in REACT amounting to 18.52% of the issued share capital.Loan NotesThe Board of REACT also announces that it is proposing to raise up to GBP1.5 million (before expenses) through the issue of secured loan notes ("SLNs"). The SLNs are intended to fund the ongoing development of the enlarged Group through organic and acquisitive growth, which includes GGES. It is the intention that the issue of the SLNs will be by way of subscription for an initial tranche of GBP600,000 (the "Initial Tranche") followed by subscription for a further tranche of GBP900,000 (the "Additional Tranche").The Group has received commitments for the Initial Tranche from Farmer Business Developments plc ("Farmers"), REACT's largest shareholder, for the total sum of GBP300,000 and certain shareholders of GGES, including Mr. Goran Nylin and Mr. Lyndon Dodd for the total sum of GBP300,000.Following subscription for the Initial Tranche by Farmers and GGES shareholders, the Group intends to market the Additional Tranche to independent qualified investors.The SLNs will be issued at a fixed rate of 10% per annum, the interest on which will be rolled up quarterly in arrears and included as principal to be repaid.The SLN's will be for a fixed three-year term and together with rolled up interest will be repayable at the end of the term.The SLNs will be secured by a first charge over the shares held by REACT in its project operating and development companies.Farmers is a substantial shareholder of REACT and as such the subscription for the SLNs 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 SLNs are fair and reasonable insofar as shareholders of REACT are concerned.Gerry Madden, CEO of REACT, commented: "The Board of REACT is delighted to be acquiring the assets of a company with a strong pipeline in the mid market biomass sector, its already operational plants and its strong relationships with funders such as Equitix."This Acquisition is a key part of the Group's strategy to act as a consolidator of the fragmented UK biomass energy infrastructure market. This Acquisition also increases the depth and experience of the management team, with senior management coming across with the GGES business. We believe that this now positions the Group as the leader in the mid-market biomass power generation sector in the UK."The proposed issue of loan notes is a proactive, financially prudent step by the Group to ensure that we are able to continue moving ahead with electricity and heat projects."The Board is currently considering a select number of further strategic bolt-on acquisitions given the significant opportunity that it has identified in the mid-market biomass sector."Goran Nylin, Chairman and Founder of GGES, commented: "The Acquisition of the business by REACT creates a positive and exciting new chapter to build heat energy infrastructure throughout the UK. This provides us with great opportunities to expand our platform and expertise. We are excited about joining forces with REACT. GGES and REACT's focus on power generation from biomass make the two organizations a natural fit. Furthermore, our combined experience, expertise and employees will benefit significantly from the increased scale and delivery capabilities that this combination will be able to offer enabling a further acceleration in the growth rate of both REACT and GGES."- Ends -For further information: [phone] REACT Energy plc 9104 Gerry Madden, CEO [phone] Shore Capital - Nomad & Broker 4090 Pascal Keane / Anita Ghanekar [phone] Yellow Jersey PR Limited - Public Relations 739 Dominic Barretto / Anne Legge About GGESGG Eco Solutions Limited is an innovative UK renewable energy specialist that designs, owns, installs and operates wood fuelled biomass energy systems for customers within the healthcare, education, hospitality, commercial, industrial and facilities management sectors. The company's systems are operated through heat supply agreements under long-term contracts via on-site biomass energy installations. Headquartered in Cambridge, the company is run by an expert UK and Swedish management team, collectively instrumental in the development of more than 100 successful bioenergy projects, representing an installed capacity of over 50 megawatts. For further information please visit:

[troutisout] 05/3/2014 12:11

Well they obviously want to shift them, offering 25k at 23.63p now or up to 60k at 24p.

DYOR,

Trout.

[troutisout] 05/3/2014 10:16

Morning all,

Just bought another 10k.

I have been buying since the New Year in smallish amounts due to the illiquidity of the share, however today they are offering in decent size, Barclays offering 60k at 25p at the moment, with the offer for much smaller amounts being 24.25p.

Having read the HEGY results, it is clear that financial close for Enfield is a very big thing for the Company and with their financial partner buying the site to have a direct financial interest in the project seems to suggest it will go ahead. My worry has been whether the Company needs more funding, however reading the HEGY results they state that their planning and development costs are recovered on financial close, so is that the same here or do REAC hang on with a larger equity stake in the project.

Anyway what is usually an illiquid share where the online offer has not gone above 25k in 2014, today is offering a nice chunk of shares to whoever wants to take a stake. With interims due out this month and the financial close on Enfield due, it is an interesting time. What you can be sure of, with the illiquid nature and the MMs, if there is positive news the chances of getting any size on the offer is slim. So time to weigh up the balances positive updates vs possible fundraising, both in the long term will be positive and I do wonder how much negativity has been exerted on this share already. With FBD having a large stake and interest through their loan notes, I am hoping they will make sure that any fundraising is done on terms that will be fair to shareholders, Enfield is the one though, if on financial close they could recover some of their outlay then the funding situation would be solved, however for the longterm a bigger equity stake in Enfield will be far better than taking short term funds.

DYOR,

Trout.

[ryan83] 28/2/2014 15:59

well atleast Ive got a few other holdings to keep me occupied in the mean time!

CTP - add it to your list trouty

[troutisout] 28/2/2014 15:57

Well the Interims need to be out in the next month, so I am sure we will hear then what has kept them.

Trout.

[ryan83] 28/2/2014 15:05

So they can make their own paper for the RNS lol?