Helius Energy secures delayed financing for Avonmouth plant
Helius Energy expects to complete the delayed financing on its 100 megawatt (MW) Avonmouth project by the end of the quarter, the group has confirmed.
Helius Energy expects to complete the delayed financing on its 100 megawatt (MW) Avonmouth project by the end of the quarter, the group has confirmed.
The biomass power company announced a £11.6m operating loss for the year to September 30th, an increase from the £757,000 loss registered in the year before. Due to the financing delay, the group is planning a conditional share issue in an effort to fund its planned development programme.
"We have the expertise and flexibility to deliver the Avonmouth and Southampton projects and to adapt as required to any changes in the market," said Chairman John Seed.
"We have made a lot of progress in 2012 in continuing with our development programme and we now have projects set for commercial handover, financial close and submission of application for planning all in the first half of this year."
The 100MW Southampton plant is currently undergoing its consultation process, and the company expects a full application for a Development Consent Order to be submitted during the first half of the year. Helius's 7.2MW Rothes plant is now almost completed, with commercial handover expected to take place in the second quarter of this year. This plant will generate dividends for Helius as it generates electricity using distillery residues and wood fuel.
Cashflow concernsHelius delivered a muted outlook statement, reiterating its commitment to its strategy of delivering projects to financial close and supplementing income by development fees from third parties in exchange for project equity. The company generated £310,000 in revenues in the past year, up from £148,000 in the period prior.
An £8.8m impairment charge will apply to the current year due to September's notification by RWE Innogy, which means reverting to the original earn-out provisions of the 2008 sale-and-purchase agreement of the Stallingborough project.
This has generated uncertainty around Helius' future cash flow; due to the uncertainty in relation with key assumptions used for the Stallingborough plant, Helius said it can attribute "no present value" to the estimated future cash flows. The management intends to work with RWE Innogy in an effort of securing future value from the project.
Helius intends to develop at least an additional 200MW worth of biomass capacity over the next two years, and is in ongoing discussions with UK site owners. Once the Avonmouth financing is completed and the plant starts generating fees, the company will be able to make cost commitments on future plants.
JF