I still am not comfortable with the 50% debt profile that this company seems happy to run with, fair enough the assets are capital upfront with long life and low maintenance... but is it just me that feels that 30-40% max gearing would be more appropriate.
The addition of other assets (even when they may be generating a rate of return higher than the cost of debt) rather than reducing the debt from the balance sheet could lead to more pain for investors when generation targets are not met due to unfavourable weather conditions.
I know BNB's impact on this company was many years ago now... but the asset purchases then were all purchased on favourable outlooks too.
At least the gas plant will still generate when the wind doesn't blow. If the additional firming from the gas plant is enough to start seeing some distribution start to trickle out of this business... I may put a toe back in... 6 years on the side lines and the red ink still shows.
IFN Price at posting:
47.0¢ Sentiment: None Disclosure: Not Held
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