Thanks baldy.GNX is at a very interesting inflection point. It...

Thanks baldy.

GNX is at a very interesting inflection point. It lacks enough own-capital to get KRH up IMHO, doesn't want to raise more, PPA partner EA won't commit beyond ten years, has an unbelievably generous risk-bearing loan offer from NAIF, the engineering is fully planned, Qld is meeting it on the link to the main grid at Ingham, the project itself is brilliant and is shovel-ready.

But it is stuck. It must find more equity or a better PPA. While GNX market cap is currently $80m, a capital raise at a sufficient discount to get over the line would be heart-breakingly dilutive of existing holders. Alternately, should it try to sell KRH. the net present value of the project is well short of what the market thinks it worth and below what has already been sunk into it.

Ouch.

GNX would be attractive to any major Australian generating company, but at what price? Certainly not $80m.

Ash