RE:RE:Ok It's Not U.S. GeothermalI think Ram could do it.. but 1. it would take shares and cash and 2. don't think it will happen.
Yes, use shares for Ram Stock purchase. Easy enough, US Geo has shelf registration with plenty of shares to .. (well I suggested this when US Geo was .70 to .80 .. and Ram was .03 or .05 or so).. but guess still works now.. so offer Ram .05 a share, times 400m shares is $20M in stock, $20 mil at .50 is 40 mil shares.... so now 40mil shares of Geo to issue.
Then, US Geo has $20m in bank and from memory about 15 to 20M in cash flow a year. Use 15M to put in 2 more wells at Ram.. then Ram is at 70 MW and cash flowing $15M a year.
Then US Geo is now cash flowing $30M a year which is enough to fund their pipeline of projects. At $15M (where they are now) they just don't have enough to really fund a whole project .. so yes they are getting reservoirs for cheap, but don't have the cash or cash flow to really fund a $150M project.
Ram does have corp debt, $50M, right, outside of Nic debt.. not due for 3 more years.. and if SJE is at 70MW and cash flowing.. like we all would like to see.. then it should not be an issue to refi that debt. Heck, if US Geo/Ram could get SJE to 70MW.. then probably refi the Corp level debt sooner and at better than the 8% or was it 10% that Ram is paying now. Think it was 8%..
Separate but other ideas was for Ram to Pay in Kind the Corp level debt. Explanation.. Issue more of same bonds to bondholders of corp level debt.. thus freeing up need to transfer from SJE to Ram corp a payment of $5M a year at SJE level. I think even as we are now.. RAM/SJE without corp level debt problem could use its cash flow to allow for a few new wells to be drilled.. thus relieving all problems for Ram.. (Note Ram Corp has interest payment of $2M in Dec, that they have cash for, if PIK used then that could be put toward dilling. If my plan had been started in May, then the June $2M interest payment could have been used for drilling. That is $4m for drilling) This is what I hope is going on wtih all the negotiations with Nic and power buyers and etc down there. Note, the bondholders are mainly the major shareholders of Ram, they stepped forward to get us out of the higher interest rate loans that (I think) Rule and his gang had around our neck. So, corp level debtholder take PIK bonds for 3 years, SJE does have cash flow to drill two new wells, SJE is at 70MW.. and current shareholders get a great turnaround story and stock recovers. That is my long odds..but i think realistic dream.
Reality is.. US Geo won't do it.. PIK idea most likely won't happen.. so we are left with how good of a JV can Ram get?