I don't think the economic model would be broken but it would be critically impacted for the period of time upon which DEL would have the pay for our purchase waste till it could find an organic waste substitute. That is why the idea of a ''catchment area'' is so important. It also depends on the risk profile of the PPAs they are striking with future offtake counterparties - are they paying LDs when levels of electricity (or gas) fall below a certain threshold? This also is very frustrating in the listed space as we just never get this level of detail from management.
You have a revenue stream (gate fees) that would flip to become an expense item. That would impact CFADS, and you'd end up in periodic lockup as it relates to the banks (of course they get paid first in any CFADS waterfall).
Hopefully though the DEL management are navigating this risk. They have certainty underestimated the complexity of all of this and again my gut feel suggests this is why the bank process is taking so long.
DEL Price at posting:
14.0¢ Sentiment: Buy Disclosure: Held
