@Ziggy124 Your first post is a good one! I have been searching the internet for a date this month when the NZ plant opens. Tomorrow... Wow. Thanks for the information.
I've been writing for a while that I thought a finance deal of some description would be achieved. Although I was starting to get a bit worried DEL would end up like Project Sea Dragon (SFG) where big dreams met a costly end for shareholders.
Palisade wants their pound of flesh. No problem. They are putting up capex and opex an order of magnitude bigger than our market cap. They are taking their hefty 12% interest in the form of shares -- which won't covert until the share price is higher. A $200 million no-questions-asked loan was never going to happen. We give up 50% interest in the plants. However, they are getting built, we have money to run the business in the short and medium term, and presumably shareholders have the quiet confidence that a serious, cashed-up investor has looked at the sums and concluded these projects are viable. SA1 and VIC1 should be going ahead rapidly. Presumably QU1 and the Brickworks / NSW1 plant get the go-ahead too. I expect to see some FID announcements before Christmas now this massive funding road block has been cleared. These plants seem to take a full twelve months to build, so I'd expect SA1 and VIC1 to be getting towards completion this time next year. Importantly, we have a supportive, clean energy-focused finance partner which is accumulating renewable energy assets.
After the four plants are built and we have regular, recurring income, who knows...maybe we are a take-over, or we have the market cap / NTA to take on future builds on better terms. To be honest, with interest rates rising and inflation out of control, a lot of micro cap companies would be struggling to obtain finance in this market. Hamish and Joe have done extremely well. I am keen to add to my holding with the knowledge that Delorean is building a solid business here. The situation looks far less perilous than it did yesterday. The pipe dream becomes a serious pipeline again.
50% of something is significantly better than 100% of nothing.
I was waiting for the analysis from Dabozza, EmptyTrolley and LongCleanEnergy to help me put the financial details into perspective. I am in the debt of such contributors.
It surprises me a little that we are only up a third today. Imagine if this announcement had been made on a green market day in October 2021, rather than October 2022? 33.9% is hardly insignificant, although I expected a little more. I feel for BestShares999 (I think is his username) who sold at around six cents although I certainly understand his frustration.
I reckon at 8.7 cents this company is better value and cheaper today than it was yesterday at 6.5 cents before the announcement. My initial buy- in price was 21 cents, and I bought almost the same amount again at 9.1 cents a few weeks ago. Although a lot of execution still needs to go right, this announcement means we've got a couple of years ahead of us whereby we end up with at least a 50% stake in 4 plants, and a decent track record behind us to attract other EPC builds. It will give DEL a solid enterprise value and tangible assets -- well above and beyond a couple of random EPC builds, and a map with coloured icons representing future unrealised plans. We certainly have multiple income streams with gate fees, gas/electricity sold to the grid, digestate fertiliser, and possible carbon credits. The investment horizon is looking clearer.
I'd say we are well and truly in business. A big milestone and great day for Delorean.
It was interesting to hear Joe in his Aus.biz interview (https://lnkd.in/gJnYjfeY) focus on selling digestate as fertiliser. I haven't heard this be a specific focus of the company before. I raised this question at the online AGM 12 months ago. Lots of possibilities for DEL now that projects are definitely going ahead.
An excellent day.
DEL Price at posting:
8.7¢ Sentiment: Buy Disclosure: Held
(20min delay)