Tidewater Midstream and Infrastructure Ltd T.TWM

Renewables IPO Timing - August + $585 million to TWM

[TVR]

Went quickly through the preliminary prospectus and completion of the offering is indicated as August 2021, as is the Final Investment Decision for the Renewable Diesel Plant (page 83).

Tidewater Renewables will acquire $585 million of assets from TWM to be paid with $180 million cash + balance in shares at issues price ($405 million).

Looks like a good deal for TWM if the issue price is reasonable - no idea yet what that might be.

If this flies it looks like it gives TWM the financial capacity to pursue something significant in terms of new investments.

It will be interestng to see the analysts take on this spin-off.

[fauxtomato]

>>Looks like a good deal for TWM if the issue price is reasonable - no idea yet what that might be. Yeah, the 'if this flies' is the asterisk next to all of my thoughts about this. Hard to evaluate. But assuming this is their best path and the IPO is likely to happen*, a couple thoughts from the prospectus: Significant projected EBITDA beyond the base $40M from the 'truck

[fauxtomato]

Without numbers you can't reach too many conclusions 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

[TVR]

I am looking at this from a different angle.  If TWM did an equity raise themselves for the Renewable diesel project at the same $180 million level they may get from Tidewater Renewables (TideR) they would need to issue around 138 million shares at the current $1.30 'ish price.  That would result in a 40% increase in number of shares outstanding - enormous dilution and not really a

[fauxtomato]

100% 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

[fauxtomato]

One final though: the EBITDA will be affected by IFRS 16 which allows the right of use assets (the rail car leases) not to be counted as an expense. Something about it feels like a dodgy use of accounting and 'what's trendy right now?' IPO to fund a project still years off, and that the IPO might not fully fund. Should sell, but I'm curious what happens, too.

[fauxtomato]

I sold 20% of my holdings at 1.29 today. I hope I end up regretting it.

[Maxmoe]

Sold 100% at 1.29 same time. No regrets, just profits. GLTA. I'll see where the dust settles after the spin off ipo.  

[fauxtomato]

Over the last several years of my TWM rollercoaster ride I've never wanted to be entirely out, it was always possible that a 'We're going private at a 30% premium' announcement would be around the corner. Now, with this spin off being so entangled in TWM's business that one day pay out seems less likely, but a slow grind higher seems more assured. These footnotes man, I know

[firstworld]

This corp is so corrupt if it was USA the csuite would be in prison for the next 150 years.

[Smokey1958]

While very new to this stock I'm always a little concerned by those who post doomsday scenarios in one sentence. Your posts on the other stocks you follow seem to have the same theme. This is not to suggest you're wrong but a little evidence to back it up would be worthwhile. TWM seems a reasonable mid term to longterm play based on analysts reports. Morningstar, which just recently

[poopoopoo]

Concerned? No, with the institution out of Toronto on the board they are watching management and overall management is focussed on the shareholders. They do have areas they can improve like shareholder communciation or bumping up the dividend but I suspect after the pipeline sale and proceeds from IPO they should be in a position to either do a buyback or div increase or both (which I would like

[fauxtomato]

I wouldn't want them to buy many back shares for a few reasons. New projects are cheaper than their current trading multiple, their portfolio contains some declining, legacy assets that will need to be replaced in new more active regions to maintain current cashflow, and an expanding footprint creates operational synergies for their other assets. I think there is still something here that is

[poopoopoo]

You and I look at things differently... I agree with you that they need to invest in their business. However, if you ignore the share price then issuing stock is not an option (due to dilution) and as a result your growth is very slow as the cash can only come from internally funded cash flow. This is their present situation which they are trying to rectify and if they continue will succeed. 

[fauxtomato]

I don't know that we're too far apart, I just don't think stock buybacks are the best use of discretionary cash outside of extraordinary circumstances. In hindsight, if the acquisition of PGR hadn't been so tragically timed, buying back TWM stock at a 7-10% yield and ridiculous EV/EBITDA multiple last year would have been an ideal use of debt. Even KEY and PPL could have retired

[fauxtomato]

The pop in volume at the end of the day Friday allowed me to sell another 20% of my shares at $1.40. I think that's it for selling until we see $1.75+ which I think is possible with a successful LCFS IPO. If it drops back down to 1.25 I will rebuy, or perversly, if it goes up above $2 on the spin off and talk of additional projects I may rebuy there as it'll be marginable. Carrying the

[firstworld]

This is a welfare funded corp with no real commercial profits so highly speculative 4 the tier run by poorly educated people mostly interested in nepotism .....just like the old Soviet O&G days of 199s and Venezuela today, except Canadians are totally captive living in oppressive police state jacked up on the world's highest debt levels everyone $200 from bankruptcy. Better to speculate on