Home » Posts tagged 'James Parsons'
Tag Archives: James Parsons
Echo Energy #ECHO – Result of Bondholder Meeting and Directorate Change
Echo Energy #ECHO, the Latin American focused energy company, is pleased to announce that at the meeting of the holders of the Company’s Luxembourg listed EUR 20.0m 8.0% secured notes (the “Notes”) held earlier today (the “Noteholder Meeting”), the proposals to restructure the Notes as announced on 5 September 2022 (the “Proposals”) were duly passed by the requisite majority with voting instructions representing EUR 10.5m of the Notes lodged by holders of the Notes, with 66.67 per cent. of votes cast in favour.
The Proposals remain conditional upon the approval by the Company’s shareholders at a General Meeting to be held at 2:00 p.m. on 24 October 2022 at the offices of Fieldfisher LLP, 2 Swan Lane, London, EC4R 3TT (the “GM”) and should approval be given, €15.0 million of existing debt principal, together with accrued interest thereon, will be converted into new ordinary shares in the Company (“Ordinary Shares”) at a 76.4 per cent. premium to the closing mid-market price per Ordinary Share on 12 October 2022:
- 50% of the outstanding principal amount of the Notes (an amount of €10.0 million), together with accrued interest thereon, will be converted into new Ordinary Shares at a price of 0.45 pence per Ordinary Share;
- Interest on remaining Notes reduced to 2% per annum on any interest accruing from 30 September 2022;
- Note maturity will be extended to 15 May 2032; and
- €5.0 million 8.0% secured convertible debt facility and remaining accrued interest will be converted in full into new Ordinary Shares at a price of 0.45 pence per Ordinary Share on the terms announced by the Company on 12 August 2022.
Directorate Change
Following the successful outcome at today’s Noteholder Meeting, Marco Fumagalli, Non-Executive Director, has informed the Company of his intention to step down from the Board on 13 January 2023.
Martin Hull, Echo’s Chief Executive Officer, commented:
“This is a very significant moment for Echo Energy. It marks the successful culmination of efforts over recent years to restructure the balance sheet and overcome the financial constraints that have been holding the company back. We are delighted to have progressed the process and are very grateful for the support of our noteholders, and of course shareholders.
The restructuring combined with our strategy to grow production in Santa Cruz and the ongoing delivery against these goals demonstrates the tangible progress Echo is making. We will continue to focus on delivering on our operational and commercial goals and unlock Echo’s full potential.’”
James Parsons, Chairman, commented:
“Today is a red-letter day for the Company. We are delighted that the lenders have agreed to pass the proposals to restructure the bonds.
Marco has been instrumental to Echo’s progress for many years and has also played a key role recently in mustering noteholder support to the changes announced today. We thank him for his contribution and wish him well as he moves onto other future endeavours.”
For further information please contact:
| Echo Energy plc
Martin Hull, Chief Executive Officer |
Via Vigo Communications Ltd
|
| Cenkos Securities plc (Nominated Adviser)
Ben Jeynes Katy Birkin
|
Tel: 44 (0)20 7397 8900 |
| Vigo Consulting Ltd (IR/PR Advisor)
Patrick d’Ancona Chris McMahon
|
Tel: 44 (0)20 7390 0230 |
| Arden Partners plc (Corporate Broker)
Simon Johnson (Corporate Broking) John Llewellyn-Lloyd (Corporate Finance)
|
Tel: 44 (0)20 7614 5900 |
Certain of the information contained within this announcement is deemed by the Company to constitute inside information as stipulated under The Market Abuse Regulation (EU 596/2014) pursuant to the Market Abuse (Amendment) (EU Exit) Regulations 2018. Upon the publication of this announcement via a Regulatory Information Service (“RIS”), this inside information is now considered to be in the public domain.
MAST IPO valuation disconnect reveals hidden value in Corcel (LON: CRCL)
MAST IPO valuation disconnect reveals hidden value in Corcel
The way the UK generates its power is changing rapidly at present. The shift from fossil fuel plants to a lower carbon generation model is creating huge opportunities for the supply of continuous uninterrupted supply of base load electricity as well as trading electricity and capturing attractive spreads, all of which is being addressed by a number of UK companies.
One such company is MAST Energy Developments, a subsidiary of Kibo Energy, which is set to IPO on Wednesday 14th April with a £23m market cap. MAST has a portfolio of small-scale ‘Reserve Power’ generation assets that use low carbon sustainable gas, with their initial focus on the Bordesley site, near Birmingham. Once listed, MAST plans to develop at scale and pace, rather than on a project-by-project basis, and implies a larger portfolio is being prepared.
Currently MAST has a c.5 MW immediate production capacity, with plans to move to c.20 MW in production capacity within the first six months of listing followed by another c.20 MW in production capacity over the subsequent six months.
Surprisingly the considerable interest in the MAST IPO hasn’t, as of yet, definitively spread across to other companies in the sector. London-listed Corcel Plc (LON: CRCL) is already a key player in providing flexible grid solutions (FGS) to the UK grid as it transitions from coal/nuclear generated power to renewables backed by energy storage and gas peaking assets. The company’s initial 100MW energy storage at Burwell near Cambridge is already fairly advanced, and is strongly backed by a pipeline of additional projects in the space as well as strategic partnerships.
MAST is raising in excess of £5 million at IPO, more than the recent market cap of Corcel, to fund its expansion in the flexible energy sector. Yet the company is coming to market with what appears to be between just 5MW and 20MW of project capacity, compared to Corcel’s existing 100MW project at Burwell and their publicly stated efforts to assemble a pipeline of additional MWs and subsequent projects.
In addition to Burwell and its associated strategic partnerships, the Company’s foundation is its Mambare nickel laterite project in Papua New Guinea, which it has been developing for a number of years. This asset underpinned a historic valuation of over £40m at once stage, but with nickel having been out of favour, there was little activity. Nonetheless, with global interest in nickel reaching new highs, there is renewed interest in assets such as Mambare, with the project JV now moving aggressively forward towards a mining lease and looking to fill increasing demand for nickel use in batteries. For an asset that has been recently ignored by the markets, the upside here is significant and the timing appears very good.
Corcel also has exposure to a second nickel/cobalt interest at Wowo Gap, located 250km from Mambare and owned by Resource Mining Corporation (RMI). Corcel owns a A$4.76m senior debt position in RMI which is repayable within the next 12 months. The strategy here has been to take the initial debt position and then negotiate a transaction for the WoWo asset itself, doubling Corcel’s nickel/cobalt exposure at a very attractive entry price. Signfiicantly, RMI has also announced the acquisition of a second nickel project in Africa, which appears to provide a compelling backdrop for RMI to settle its Corcel debt via a project for debt swap. At a stroke, this move will make Corcel a major regional nickel player in Australasia.
Valuations per MW for MAST range from £3.6 million (5MW) to £0.9 million (20MW). Even taking the lowest figure and discounting it by 50%, to remain conservative, the Burwell project alone looks to be worth well over £40m to Corcel’s valuation.
Corcel raised £300k in February and at the same time put in place a debt facility, so appears to have no imminent cash requirement. With 321,381,614 shares in issue, if Corcel were valued in the same way as MAST, based on the most conservative estimate for MAST having control of 20MW of flexible assets, Corcel would immediately be valued at 18p. The math for a comparative valuation assuming MAST has only really secured its initial 5MW, Bordesley project, (and with the rest considered ‘pipeline projects’) isn’t hard to do, and would push Corcel’s valuation into the triple digits and the share price north of 60p.
And to remind again, this valuation analysis for Corcel does not take into account any allocation for the Mambare or Wowo Gap nickel / cobalt assets. Valuation disconnect perhaps? Likely not for long!
Managing the Transition to Clean Energy – Q&A with James Parsons
Managing the Transition to Clean Energy – Q&A with James Parsons
Q So much seems to be happening globally around the energy transition at the moment, from big companies such as the oil majors to the micro cap space. How do you see the transition at the moment?
It has been an exciting time to be involved in the industry! I think we shall look back at this period at some point in the future and realise we were living through a rather unique part of our history, especially in terms of the energy space.
There is undoubtedly growing momentum in the transition/clean tech/renewable arena this year already, and increasing investor interest, too. Just as two examples which I am close to… we raised £4.5m last week in Coro Energy as we deepened our renewables footprint through a second SE Asia-focused clean tech developer acquisition. At Corcel we also recently raised funds to help progress our Burwell Energy Storage project in the UK, one of our key battery storage assets supporting the UK’s push for electrification.
So whilst you inevitably see rather aggressive “greenwashing” by the bigger players, attempting to cover the fact that they inevitably still have their roots firmly in fossil fuels, the smaller, more nimble players are able to adapt much quicker (and follow the money!).
My sense is this is an irreversible trend with companies looking to future-proof themselves and increase their relevance to increasingly ESG focused investors.
Q You were one of the early adopters in transitioning micro caps over to the clean energy space. It looks like this started with your role at Corcel plc, a Battery Metal explorer and developer, in 2019 and has been further re-inforced with Coro Energy initiating a pivot to renewables last year and Ascent plc recently announcing an ESG Metals strategy. I guess this all reflects your own personal belief in the carbon transition. But do you see any future for Oil and Gas?
There is, to my mind, no doubting the remaining importance of hydrocarbons to the energy mix, and their necessity for some time to come, especially existing developments or producing assets where the hard work to find them has been done, and their deployment provides time for other energy technologies to mature. This is particularly true for gas, which remain an obvious bridging fuel for near term gains in low carbon energy, and as a back up for intermittent solar and wind power.
I am however personally very clear that oil and gas now have a finite place in the forward provision of energy, and we must all engage in the progression of alternatives as practically, economically and quickly as possible if we are to deliver on targets to ameliorate the impact on the climate.
Q How quickly can you build scale with firms like Corcel, which clearly have an interesting platform on which to grow?
Corcel is, in my view, one of the “yet to be recognised” early leaders of the energy transition in the micro cap space. We operate at the intersection of battery metals mining and its end use in energy storage with a portfolio focused on first acquiring battery metal resources prior to the widely expected structural price hike and secondly generating low risk cash flow from energy storage and trading via batteries.
If we were directing a movie of the 2020/21 energy landscape, I would suggest a suitable working title to be “The Rise of Batteries”. Corcel is right in the middle of that space and looking forward to playing its part! Since 2019 we have focused on sorting out the inherited legacy issues, and then turned our attention to building the strategic foundations for the future – this is swan paddling stuff, with lots of work going on unseen but we are really making progress now. The focus at the moment is on achieving shovel ready status at Burwell, the battery storage site in Cambridgeshire, on securing a Mining Lease at Mambare, our first PNG Nickel deposit, and on unlocking Wo Wo Gap in conjunction with RMI (an ASX listed company where Corcel has a significant debt position).
So, scaling up is critical and that will come as we both broaden and deepen the portfolio – however, I really want to see some of the inherent NAV we have already created reflected in our valuation before we make the next big move. I don’t expect that to be too long!
Q Tell us about your views on mining. Following the pivot of Ascent to ESG Metals, it seems to play an increasingly important and strategic part in your work, doesn’t it?
It absolutely does and mining was a relatively new space for me, so it has been hugely interesting to get up to speed on the industry and particularly to dovetail it with my own ESG agenda. At Ascent, we have now formalised our ESG Metals strategy as one of the emerging “special situations”. We see huge opportunities in reclassifying, through highly efficient recovery techniques, stockpiled surface mining waste (previously viewed as a liability for mining companies) as a valuable asset for reprocessing and commercial sale. The larger producers have historically seen tailings as sub-commercial so our opportunity here is to provide strong cash returns without exploration risk and with only a modest upfront capital outlay, all whilst supporting a key ESG objective of materially lowering global waste.
Q It is fascinating to watch both the companies you are involved with – and you personally – plot the course through the energy transition. Do you think investors can still expect to see the “multi bagger” type returns in the ESG energy space?
The beauty of the extractive industries has always been the binary nature of the outcomes and the resulting risk / reward balance (ie if you “strike it big” investors can see immediate significant returns). It is absolutely true that clean energy technology normally has a much lower risk and more modest return profile. However there are still ways to secure the upside exposure, such as being a first mover (eg as Ascent is in ESG Metals) or taking strategic bets on the macro fundamentals and forecast supply crunches (eg Corcel’s positioning with significant Nickel deposits in PNG). I’m very pleased with the ESG portfolio I am involved with and excited about where these micro caps will be a few years from now.