As far as I understand it they take 12% on the amount they invested. So essentially they will get first grab of any profits up to 12% if the plants don't hit 12% then the excess is deferred and payable the following year. However, it also seems DEL will extract an amount of profit before this 12% comes into effect (assuming I'm following correctly).
"Delorean will undertake Operation and Maintenance of the Immediate Projects on arms-length terms and commercial margins for a term of 25 years. Delorean will also provide day-to-day management services to each project under separate Revenue Management Services agreements."
Remember these projects are setup as special purpose vehicles so they are essentially a subsidiary of DEL, this should limit financial risk to DEL in the case they turn out to be unprofitable. So it seems DEL will extract some revenue from running them on behalf of the subsidiary then pay Palisade its 12% if it can then I believe DEL and Palisade will split (50% each??? I'm unsure of this) any further profit after that. "Palisade will also receive equal ordinary equity interest in the Immediate Projects together with Delorean in excess of the preferred return."
Its pretty hard to determine just how much DEL will get from this first 2 projects without knowing more details. But what we do know is the risk just decreased substantially, the projects are going ahead pending FID, and the company is IMO currently undervalued based on retail sales revenue alone. It would seem he only other thing that will hold back the SP in the sort term is potential risk associated with YarraVally
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)