I too am feeling a lot happier and more comfortable with the DEL investment this weekend vs last weekend.
With effectively 5 projects now underwritten from a finance perspective things are looking a lot brighter right now. We should be thankful Palisade Impact closed the first fund when they did and selected DEL to partner on the pipeline of bioenergy projects.
Palisade Impact reached a first close on their $400m first fund in only August this year. In my view DEL has very limited options prior to this - a limited number of investors who can and are able to take early stage development risk and underwrite a pipeline. There are not many investors in the Australian infrastructure market who can take greenfield merchant waste, construction and power risk. Banks - no go clearly and too risky. Banks will come though, its inevitable once the projects are de-risked.
So what was DEL doing between August 2021 (when the finance workstream was first announced) and August 2022 when Palisade Impact fired up? A lot of circle work in my view. We don't yet know what Planum are going to rip out of the deal, we'll soon find out once CPs are closed out.
5 projects - average say $25m per project (+/-) = ~$125m of project capex effectively underwritten and DEL will own half of this, less some ownership at TopCo level, less a 12% fixed return. Then add in your EPC contract margins, O&M contract margins (over 25 years).
If this is not undervalued at $23-$24m market cap then I don't know what it.
Few other additions thoughts
- We are still ~50% down, but that gap can close so quickly - we have seen it close quickly last week.
- You know - the Morgan's analyst dropped covered as well. What a short sited boffin.
- Mislead - possibly, inexperience in listed markets most definitely. They'll get better at comms and we are starting to see evidence of this.
- The state and to a lesser extent federal governments are really setting a massive tailwind - no doubt DEL will benefit from this.
- If brickworks, AGIG or otherwise offer a ridiculous premium for a small amount of equity (a lot of reasons why they would do this) - I'd be interest to hear Joe and Hamish's thoughts. Everything is for sale at a price. Palisade (certainly with a pending board seat) can influence some of these more strategic investments/divestments at the Delorean Corporation (TopCo) level.
Exciting times ahead, looking forward to the news flow on Monday.
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0.020(23.5%) |
Mkt cap ! $22.65M |
Open | High | Low | Value | Volume |
9.5¢ | 11.5¢ | 9.5¢ | $261.7K | 2.502M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
4 | 422217 | 10.5¢ |
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Price($) | Vol. | No. |
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11.5¢ | 235623 | 4 |
View Market Depth
No. | Vol. | Price($) |
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4 | 422217 | 0.105 |
3 | 145000 | 0.100 |
1 | 50000 | 0.097 |
2 | 56455 | 0.094 |
2 | 70000 | 0.090 |
Price($) | Vol. | No. |
---|---|---|
0.115 | 235623 | 4 |
0.120 | 297416 | 5 |
0.125 | 107200 | 3 |
0.135 | 60000 | 2 |
0.145 | 3000 | 1 |
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