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

Recommended

Broker safety – your questions answered
Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
How demographics affects stock valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Do you own shares in Sirius Minerals? Here’s what you need to do now
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020
Why investors should be “cautiously bullish” for 2020
Stockmarkets

Why investors should be “cautiously bullish” for 2020

Analysts have been out in force making rosy predictions for stockmarkets in 2020, but while there is certainly a case for optimism, investors should r…
17 Jan 2020

Most Popular

Oil producers are back at their Covid-19 lows – is it time to buy?
Oil

Oil producers are back at their Covid-19 lows – is it time to buy?

With demand for oil hammered by Covid-19 and talk of “peak oil demand”, there are lots of good reasons to be bearish on oil producers. So, asks John S…
22 Sep 2020
Why you should stuff your end-of-pandemic portfolio with Chinese stocks
China stockmarkets

Why you should stuff your end-of-pandemic portfolio with Chinese stocks

For an end-of-pandemic portfolio, you need assets that can cope with today’s volatility. And that, says Merryn Somerset Webb, means Chinese stocks.
14 Sep 2020
IAG's share price is ready for take-off - here's how to play it
Trading

IAG's share price is ready for take-off - here's how to play it

The owner of British Airways has had a turbulent year, but is now worth a punt. Matthew Partridge explains the best way to play it.
8 Sep 2020