The bond makes no sense until the stock is requoted and we can see how the supposed deal works. Very odd to announce to bond before the requotation. This could be anything from disaster to bonanza. Fingers crossed.
Looks like the only way to get a return on your investment in Atlantis might be to subscribe in one of these bond launches!! If they are paying out 8% on this and the last bond, they are never going to have free cash to give me a return on my shares, and increasing debt is unlikely to lead to strong share price growth. I have to admit that I am losing faith in the management.
In view of your Ripley handle, let me rephrase the analogy used in my last message .
I find increasingly difficult to know whether Atlantis are currently gestating inside their stock market host, only waiting for their share price to burst out in spectacular fashion like the all-consuming monster from Kane (John Hurt). By contrast, Atlantis may equally be standing at the receiving end of the monsters jaws, waiting unknowingly for the killer strike. ;-)
This is my own opinion of course, so should be taken with a pinch of salt. I increasingly find it difficult to guess whether Atlantis is preparing a sound basis for meteoric growth, or if perhaps they have instead ventured too far too fast, and are now metaphorically standing in the crocodiles mouth.
I cant call it, and would love to see some evidence for either case. I know this doesnt really answer your query but, welcome to the club.
Much as I like the technology that Atlantis has developed, and the area of business that they are in, I really dislike the apparent disregard that the management have for their shareholders. Updates and reports that are not posted when they are supposed to be, dilution of holdings by partnerships with much larger companies etc. etc.
I am concerned about cash flow here, and would like to see management concentrate on what they have rather than this constant chopping and changing. Some focus would be good.
"Atlantis, a global leader in the tidal power sector, is pleased to announce that it has agreed to sell its stake in its Canadian joint venture to its partner DP Energy, a leading renewable energy developer, at the FORCE facility in the Bay of Fundy, Nova Scotia, Canada."
They still appear to be burning cash at a fair rate. June cash position was £6.9 million where they had £10.2 the previous December, and that includes £4.1 million raised in May! The bond gives them another £5 million since then too. It is just as well that MeyGen is producing cash now to cover the cost of all this.
Brexit, and the doubts that must now surround future EU grant funding must be a part of the recent change in attitude towards this share. Any thoughts?
Posted on the Atlantis web site on 20th Sept. Excerpt below:
Tim Cornelius, Chief Executive of Atlantis, commented:
The first half of 2017 has been a very positive step forward for Atlantis and its portfolio of projects. The installation of the four turbines at MeyGen earlier this year, was achieved safely and in record time. We are extremely excited to see the final turbine, our AR1500, be reinstalled at MeyGen in the coming weeks and seeing the project complete its transition into full operations. MeyGen Phase 1A has already set a number of records, with over 2GWh of generation having been dispatched to grid, generating predictable revenue from ROCs and wholesale power sales from the PPA. This now allows us to consider a re-finance of the project to improve returns and liberate capital for new investment opportunities.
In addition, the first half of 2017 also saw us formally launch Atlantis Energy and the announcement as preferred developer of the 160MW tidal barrage and flood protection infrastructure project in the Wyre Estuary, England. We believe that this is the best pathfinder project in the UK to help demonstrate the benefits of predictable low-cost generation from a fleet of commercial scale tidal barrages across the UK. We are very excited to develop this project alongside the rest of our tidal stream portfolio throughout the UK, Europe, North America and Asia. There are number of very exciting projects being developed in South East Asia at present and we are well positioned to convert these opportunities into equipment sales and project development contracts.
Not reading anything ominous into that. He's staying till the end of the month so not being ghosted out due to any misdemeanour.
Tidal must be the way forward. Even if the sun ain't shinin' and the wind ain't blowin' the tide still ebbs and flows all day, every day, 365 days a year.
Bring it on, (as they used to say!)
At 8%, my only surprise is that the bond took so long to sell out. It is certainly a lot more than we the owners are likely to see for a long time to come!! Perhaps the month long bond buying period is a sign of caution by those investing?
Decided to take the hit and completely sell up today, a really poor outcome. Should have sold back in January but convinced myself this was a longer term prospect worth holding for a dividend stream.
I do not intend to become a bond holder and I cannot see a propsect of a yield nor an improvement in the share price anytime soon. When the bond is offering 8% over the next 5 years why would anyone buy the shares?
There is exciting value potental opening up in other stocks and I now have cash to invest.
As another poster said recently, sometimes you get sick of staring at your mistakes.
I share your worries. Cash is king and all that. Cash flow, or a lack thereof, must rank highly in the list of reasons why new products fail. I too would like to see a bit more caution on the part of ARL management with proof of concept, and at least some degree of organic, self funded growth.
Nice technology ARL, now make it work reliably, and make some money from it. Otherwise, what's the point?
Well I am more and more doubtful about this, ARL has a curious approach to its financial management. And I am not persuaded by the Abundance pr. This was a £5M 5-yr 8% bond launch because the company need to refinance, not a £2-5M let's suck-and-see offering which would be nice to have the cash so we can exploit the capital
To have only attracted £1M of investors on day 1 is awful, compare that with the WASPS 6.5% bond which sold around £25M last year. Fancy not being able to sell an ISA-wrapper approved bond at 8% !!!! No wonder they are having to run a 2-month sales campaign.
ARL will need massive investment in order to fund the many projects it has announced itself to be involved in, tens or hundreds of millions in the next few years, so this bond is almost a distraction. And it has failed, as I thought it was intending, to deliver organic self-financed growth using an accumulating income stream from power generation starting with Meygen, about which outtage we still have not been updated.
Unless a major investor with serious resources and proper management steps in I am beginning to worry about the future of ARL, and intend to sell out at the first sensible opportunity.
They say 8% is lower than their current debt, in fact it's the primary reason for issuing the bonds.
I've decided not to take part as "Abundance" are not abundant with information about the bond issue unless you make a deposit into your account.
If a company's in trouble its usually the bond holders that have to take a hair cut first.
It would be interesting to know the logic behind issuing bonds at 8% when borrowing is generally available at much lower rates. High interest rates are generally associated with a high risk of default, so what does that say about ARL?
I've started the process because 8% is not to be sniffed at. But it is quite time consuming and you've got to deposit your cash before you get to chose how you invest it. Still thinking about whether I'll go ahead.
On enquiry, unfortunately the bond will only be available to subscribe, hold and trade through the platform of the fund raiser Abundance (I nearly typed Ambulance there) where you would need to open a new account etc. There is enough risk in this already ...
So ARL are thinking of issuing £5M of bonds at 8%, to raise even more capital and to refinance some loans at harsh rates ... so that explains the bad news in the annual report that last year they blew £1M on interest payments on debts of around £10M.
Not sure this all makes me happy, firstly selling off a chunk of shares to Hyundai on the cheap which sliced the value of my holding, and now planning to pay a whopping 8% to new bond holders, presumably as an alternative to rewarding existing shareholders with a dividend anytime in the next 5 years.
I still like the idea of this technology and its potential, but I am not sure I like the way they are managing their finances nor the way they are treating shareholders.
Worth a punt, R ??
Wind doesn't blow all the time and solar isn't much good in the dark ! But the tide will ebb and flow roughly twice a day for as long as the human race will need it !!
The future's bright, the future's tidal :-))))
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