Been watching this from the sidelines for only a short while. Really want this company to work to solve the plastic problem in this world. But the maths doesn't work very well. The delays don't help. While shareholders wait, the share price drops, while management also waits, but gets a huge raise and exorbitant salary for doing so.
Main concerns - not sure if the $90m facility is the best way to go. Say Amsterdam works. $9.45 EBITDA (90% share). Corp cost of $7.5m and interest of $7.65m (8.5%). So even if Amsterdam works as planned on their claimed margins, we still running at a loss. Like previously mentioned, sorting through the plastic in large scale, disposal of unusable plastics, efficiency issues of a new plant - all these I don't know if management were conservative for their margin estimate.
So shortfall of around $5.5m even if Amsterdam goes according to plan, which could be paid back from their borrowings of the $90m to keep the company running.
So those who say once Amsterdam works, it's all blue skies.. - It's only just the beginning. Once it works and if at the stated margins, then great, from there, how long until company is cash flow positive? The longer the delays, the more the borrowings are used to pay for corporate costs instead of capex. If Amsterdam is not working even remotely close to the margins, then it could open a whole lot of other problems.
Am I missing something here that the optimists see that I don't?
For my risk appetite, I'm definitely waiting to see how Amsterdam goes before deciding any action.
IGE Price at posting:
10.3¢ Sentiment: None Disclosure: Not Held
