ReGen III Corp. V.GIII

Definitive agreement reached

[TManiac]

Not too many pieces of the puzzle left to put together with this deal being reached. Hopefully this firm leads to many more project announcements in short order.

[lscfa]

The share of project given up is better than the 50% I expected....       US refinery US refinery Bpd 5600 5600 Revenue $ mil 396.4 396.4 50% ebitda margin 198.2

[Marphine]

MUCH better than what the market was expecting! Congrats to all longs. Exciting months ahead!

[SmilingDog]

I think your math might be off. They're not giving up 28% of the equity in the project. They're paying a 14% preferential dividend + giving 14% of the project. The 14% dividend on $75M of capital is equavalent to ~4% of the project if we use the company provided $250M EBITDA estimate. So they're effectively giving up 18% of the project for the $75M of capital. An amazing deal for ReGen

[lscfa]

28.5% ownership or 14% royalty + 14.5% ownership means the same thing. 28.5% of cash flow goes to partner. I still think the partner will issue $40 million for this 28.5%. The $75 million is the top end of a commitment so partner may participate in next project too.     $US million EDC loan 108

[SmilingDog]

That's not correct.  Scenario one (the incorrect one): 28.5% equity ownership = 28.5% x $250M of EBITDA = $71M of EBITDA allocated to PE partner Scenario two (the correct one): 14% equity x $250M of EBITDA = $35M of EBITDA + $10.8M dividend payment (14.4% x $75M investment) = $46M allocated to PE partner There's a very big difference between $71M and $46M. At a 10x valuation

[lscfa]

Yeah after reading the NR again I see the 14.4% is on funds advanced, not project revenues. NR does not say if this 14.4% is in perpetuity.       US refinery Bpd 5600 Revenue $ mil 396.4 50% ebitda margin 198.2

[lscfa]

$75 mil equity financing for a $175 mil project means smaller loan amounts required from EDC and others and possibly better terms as project is not as leveraged.