Simec Atlantis Energy Share Discussion Threads

[clabburn] 21/7/2020 11:58

That's right. They have a plant in teeside up and running but will need to build production capacity somewhere else as well. Have previously mentioned needing three facilities across the UK to service Uskmouth. It will add a bit of cost but nothing to worry about. I expect them to announce details when we get to financial close. Environmental permitting should be done this quarter, planning consent hopefully by end of yesr all being well.

[bishfund] 21/7/2020 09:37

S+P no longer going to be based onsite too, unless they are planning still producing somewhere nearby?

[clabburn] 21/7/2020 07:49

This announcement contains all the details of the deal. Things may have changed a bit since then (eg data centre now in the mix).

hxxps://simecatlantis.com/2018/05/21/update-on-proposed-acquisition-of-simec-uskmouth-power-limited/

[clabburn] 21/7/2020 07:20

507048116- the deal structure was outlined at the time the reverse merger was announced when simec acquired 49% of Atlantis in exchange for the uskmouth project. If you search back to that RNS the detail is in there. From memory it goes something like this. S+P agree an expensive power purchase agreement to offtake a small amount of the converted stations output. I'm guessing this will cover much of the stations fixed costs. In exchange S+P get a massive new customer and the chance to dramatically scale their business. S+P make most of their money on the gate fees taking in the waste initially rather than sales of the subcoal so can afford to sell that on cheaply. Meanwhile Atlantis sell the bulk of the output to the simec steel plant based on the same site at a price slightly cheaper than whatever the wholesale price is. They can afford to do this because of how cheap the subcoal is and are expected to still have very healthy nargins. Simec win by getting access to discounted power and have managed to turn a liability (an old power station they didn't particularly want) into an asset. For future deals the structure would likely be similar but I would argue that the developer (ie Atlantis) should get a greater share of the value created for taking on the project risk. S+P hold the key IP here and in theory stands to gain most but they have are too small to take this global in their own hence the joint venture with simec to scale up the production of subcoal to industrial quantities. I suspect there is a close relationship now between the three parties and would expect them to continue developing projects together like this but there is nothing to stop any of breaking ranks and working with other companies on similar conversions.

The one thing I don't yet fully understand is the latest news about adding a data centre to the mix. My hunch is that it's a hedge in case the steel works closes at some point given how challenging that industry is.

[barts] 20/7/2020 14:54

Not many shares available down at this price.....maybe the start of the next leg up?

[jotoha2] 16/7/2020 13:21

Profit taken , back in when it hits 10p , lovely little share .

[iamgreat1] 16/7/2020 11:31

Sp nothint untip next year price will drift down now

[bishfund] 16/7/2020 09:55

Im guessing splitting this into two phases will also minimise the amount SAE have to give away in order to fund the project. Being able to raise finance against the first phase to pat for phase two for themselves instead of having to give away more of a share to an investor to fund it all.

[5070481] 16/7/2020 09:22

HI Clabburn, have you seen any breakdown of how the vairous parties to the Uskouth project will recieve their money in terms of the percentage splits from teh business. Or how SAE can benefit from other coal fired power stations converting as well. Havent been able to get anywhere with research or speaking to SAE IRs as of yet.

[clabburn] 16/7/2020 08:25

Nothing to worry about here in my view. It's not the most bullish news but sounds like a direct consequence of negotiating finance which is progress all the same. The big rerate will probably only come at financial close.

[duwendag] 16/7/2020 08:04

wild overreaction, it might end up blue at the end of the day.

[5070481] 16/7/2020 07:49

Time lines changed. Rerate put back a bit it seems. Had hoped to be up and running in 2022 but suspect that has now deifintely slipped into 2023. The NPV of the project remains relatively unchanged.

[mach100] 16/7/2020 07:24

Market not taking it well due to the change of plan and the delay caused by a phased approach. The disappointment is masking the derisking and the new revenue stream. SAE will recover any fall and be in a better place.

[jone06] 16/7/2020 06:49

A sensible move given covid19 to split into phases and commissioning a new fuel is going to take more effort than first thought. Datacenter angle is a smart move and may even help with funding

[cwa1] 16/7/2020 06:22

Uskmouth update:-

[x54v] 15/7/2020 14:24

Coverage in Proactive today

"Thousands of coal-fired stations still exist and are critical to the energy infrastructure of many countries, especially in the third world."

"Falk Hoffmeister, a vice-president at MHPS, the Mitsubishi and Hitachi venture, said the large-scale testing had underlined the huge market opportunity for similar thermal conversions."

"Broker research published after the burn test suggests that, when operational, Uskmouth might generate underlying profits of as much as £50mln a year."

"Research house Longspur suggests that if Uskmouth progresses on schedule, the business overall is worth 71p but even with some slippage on the timeline it can easily work the numbers to get to 55p per share."

[x54v] 15/7/2020 09:27

Nice delayed buy there. 100k @ 19.7.

Often works out well buying on the pullback when things are quiet.

[clabburn] 13/7/2020 16:39

I caught the second half. Sounded fairly promising. Work could start in next 6 months or so but I think some local planning decisions still need to be made on the island I think. Will keep an eye on the website here hxxp://www.quayfm.gg/interviews/ in case they post it.

[bishfund] 13/7/2020 13:23

Dont suppose anybody recorded this?

[x54v] 13/7/2020 10:57

Tim Cornelius just about to talk on Quay FM. Around mid day.

[clabburn] 13/7/2020 09:06

I have huge admiration for Gupta's strategy. His vision and levels of ambition are on the same sort of scale as Elon Musk in my opinion and the world needs as many of these people as we can find. Im still slightly about the risk they took on too much all at once when they went on the great acquisition spree a couple of years ago but the pieces are starting to fall into place one by one and if they can come through the current crisis in tact the future will start to look very bright as governments around the world begin to pour money into key industries. I think the family-owned nature of the business and maybe also the fact he is Indian-born seems to arouse suspicion for some, and the FT clearly have a grudge against him but personally speaking Im a huge fan and very glad they are in our corner here.

[beagrie] 11/7/2020 09:45

Dont know whether anyone has seen this article, its all beginig to make sense from a GFG perspective.

hxxps://www.business-live.co.uk/manufacturing/steel-magnate-sanjeev-gupta-renews-18547869

[tromso1] 10/7/2020 10:03

Yes, and good to see that the company is keen to fund the project "in a manner that will not be dilutive to existing equity holders".

There will be a lot of interest currently in the company on the back of the recent burn results at the moment I imagine. Exciting times.

15:50 - "So we've actually stopped hosting different groups at our facility in Newport because it's too distracting for management but I can tell you and I've been open in the market before, from China to the US, from Japan to South Korea, from Australia to Indonesia, delegations, power companies have all been coming and observing.

And it's effectively if you like the dry well/wet well moment - once the burn test results are announced, if they're successful from both an efficiency and emissions perspective, then all of a sudden you'll have huge interest from anyone who's trying to shut down a facility and convert it to something profitable as opposed to tackle very expensive decommisioning."