I asked a couple of questions specifically regarding CETO 5
1/ How many CETO 5 units are currently deployed ... Answer as expected was 5
2/ What plans were there to redeploy units 2 and 3 .... Answer was a bit of a surprise. There are no current plans to redeploy them as they have met all the contractual requirements re an array deployment and also proved the capability to be able to hot swap. The point was made that all available resources are focussed on CETO 6
With regard to CETO 6 and desalination. The answer here was a bit vague here. There is no current plans to produce desalinated water on the CETO 6 Buoys. One option would be to put a desalination plant inside the buoy and pump the desalinated water ashore. Other option is to pump the salt water ashore and produce the desalinated water in the off peak night time when the electricity load is low.
With the integration of solar and wind for CETO 6, wind turbines could also supplement the electricity generation at night for desalinated water production.
Clearly the desalination aspect for CETO 6 has as yet not been well thought through.
After the meeting I took time to chat with the Chairman regarding the SPP and the resultant decline in the SP immediately following the announcement of the SPP.
I made the following points that I thought should be look at seriously in there is another Capital Raising required.
1/ The announcement should be in the form of renounceable rights that can be traded on the ASX if shareholder wish or take up as they see fit. I gave recent examples of the major banks where ANZ's SPP was simply at a discounted price and the result was the SP dropped almost to the SPP price. This compared to the CBA and Westpac SPP which were renounceable and the rights traded on the ASX. The result was almost no drop in the SP as the rights had an intrinsic value.
2/ A future CR should also offer options exercisable at a future date and price. For example, exercisable say at 8c in 18 months time. This would make the offer more attractive.
The comment by the chairman even though he held both CBA and Westpac was they hadn't even considered it.
My parting comment on hearing this was that maybe they should look at using a more creative broker.
From my perspective, the briefing was the most disappointing that I have been to and I have been to all of them over the past 4 years
CWE Price at posting:
4.3¢ Sentiment: Buy Disclosure: Held
