I agree dej, and I think what is pretty clear in regards to how rewarding this project will be for shareholders, at least in the short to medium term, is whether or not naif funding is gained. It is absolutely critical and may allow genex to proceed without a funding partner, depending on how much finance they can get from society generale. Total Concessional loans for all projects through CEFC funding is limited to $300 mill for this year I believe. But since genex is storage, they should be looked upon favorably I would have thought but it would still seem hard to see that they would get anything more than $100m, if even this high. For arguments sake, Let's assume:
$250m from naif
$100m cefc
$50m Arena grant
This means another $350m still required. Hard to know how much debt they could take on from society generale but if they could get another $200m then Genex should avoid a JV partner, and would then require a $100m capital raising. Dilution of course in the short term but a far more prosperous project when online and I would have thought much higher share price. It's fun doing the predictions but it's hard to know of course. A final word on recent political comments on the naif funding, it makes me nervous when labor ministers start urging an LNP government to act in a certain direction. Given recent Australian political culture, this would encourage the opposite to be done, no matter how nonsensical. Id prefer the ministers would say nothing to be honest.
GNX Price at posting:
27.0¢ Sentiment: Buy Disclosure: Held
