RE:RE:RE:Renewables IPO Timing - August + $585 million to TWM100% agree: if it works it is incredible for TWM. If they sell 30% of Renewables to the public they're selling $12M in current EBITDA for $180 in cash (though you'd have to adjust that for how much goes in equity to the public and how much comes out of Renewables' credit line).
Issuing TWM equity would be the worst option. At that point just don't do it.
But I don't think Renewables is a particularly attractive investment, even the ticker (LCFS) shows the company is depending on government support to support the economics. I don't like the renewable diesel project, it has large political and operational risks and would have preferred to share the risk on that project with a non-affliated entity. That the best buyer they could find was the public is troubling.
I get that they're trying to retain control while capturing the full upside in uplift from 'energy company' to 'green energy company' but man Renewables looks like a tough sell to me.
It will take a very successful IPO to fully cover the diesel project capital costs as most of the BC LCFS credits are granted towards the end of construction. Or they could hope to issue more LCFS shares as the project progresses. They can't afford a dividend during the capital process so I guess TWM would help to sell some of it's shares after they appreciate in value? Seems like a lot of optimism and not a lot of pragmatism.