This has been an underperforming asset. Constructed at a cost of...

This has been an underperforming asset. Constructed at a cost of $42.5 million, it was the world's first utility-scale solar + battery storage project but faced many technical challenges especially in the commissioning phase and first year of operations. That's not to say that MPR has necessarily picked up a dud.

Buying the asset for an EV of $8 million means exactly that - the total cost is $8m. The equity check of $340k is funded from cash at bank (what little there is). The $7.66m of debt carried by the asset is non-recourse project finance debt, so the lender only has recourse to the project itself and not MPR.

An EV of $8m and run rate EBITDA of $800k pa suggests an unlevered IRR of 6.5% assuming a conservative remaining asset life of 15 years. That's pretty good for a contracted (PPA) asset in the Australian market (generally 5-6% unlevered IRR). Interest costs ought to be in the order of $500k per annum on the existing facility so the cash flow from the project (EBITDA of $800k) would suffice to service debt.

So MPR appear to have bought an asset at an attractive price based on what it is today, with the opportunity to use their claimed technical and engineering expertise to improve the asset's performance, increase cash flows/EBITDA and potentially re-lever the asset. More importantly, success could open up a huge field of similar opportunities for the company.

Those are my ramblings for the day. Interested to hear everyone's thoughts.