RE:Renewables IPO Timing - August + $585 million to TWMWithout numbers you can't reach too many conclusions
If the aggregate gross proceeds of the Offering are greater than $125 million then, depending on the amount of such proceeds, the Company will evaluate and prioritize its other growth projects (the RNG Anaerobic Digestor Project and Gasifier Project) using the surplus sources of funds described in this paragraph.
But I guess this sentence gives a clue as to what the hurdle is to get the renewable diesel project to FID. That'd still require $55M in debt for the $180M cash, and TWM would own ~80% of the shares, and they'd be at d/ebitda of 1.25 before they've even built anything.
I know they get portions of the BC LCFS credits at different milestones, so they don't have to fund the whole thing to ISD then get paid out, but there is still a lot of money that has to churn to to build out $245M worth of projects (Canola, FCC, renewable diesel). ~15% of the LCFS credits aren't awarded until after a full year of operations.
Just roughly mapping it out the growth capital with the remaining $125M (assuming $55M of debt used to pay TWM) of credit capacity and when they get the BC credits, it's...not like they've got a ton of breathing room. Maybe they'll work at a higher DCF/EBITDA ratio due to a lower debt level and retain more cash flow. Or maybe they'll sell $200M of public shares.
This crowd sourced funding option has a lot of capital leakage (transaction costs from all the usual places, plus new salaries and options for the c-suite doing the exact job they would have been doing had this project stay warehoused in TWM). Would have far preferred an asset level JV for cash, and maybe the absence of that solution says something about the project.