Replies to post #78439 on 3Power Energy Group Inc (PSPW)

[stark12]

Repost from yesterday--From the last 10Q:

Shala, through its operating office in Tirana, Albania, has developed concession opportunities of approximately 300 MW hydroelectric and 50 MW of Solar PV plants. Of these concessions approximately 100 MW are construction (shovel) ready but no construction has yet commenced. We estimate but cannot guarantee that construction will commence by late 2017. A further 100 MW are awaiting final construction permits and the remaining capacity is currently in the planning and permission application phase.

Shala is in on-going negotiations with international EPC and O&M providers on the basis of a “design, finance, build and operate” model.


So, today's announcement references roughly 170 MW. This quote from the 10Q suggests there are a total of 300 MW of hydro, 50 MW of solar, and another 100 MW (not delineated) that have already been referenced.

[Gatsby]

I am not sure how you can conclude that the revenue is too small and the impact on the pps..
1) project.
110m initial investment versus 17M yearly revenu before.
question: what is your IRR expectation or Net present value of such project?
Obviously numbers will depend on different aspect of the financing:
- how much from the capital
- how much form lenders - and % of remuneration for the lender.
Without this information, it is difficult to tell what is the profitability of such investment.
Only information: 6.5 year of revenue to recoup initial investment.

But then. what discounted value do you apply for future stream of revenue, for how many years...
What is the normal life cycle of such project ? 15-20-25y ? 50y
How much to spend to maintain the infrastructure per year ?
You see.. many variables....

So if you get a 100M loan at Libor + x% + 10M in capital increase, spend 110M in 3 years to complete construction, receive 17M per year... with interest rate around 1% for no-risk investment.
What is good, what is not ?

2) share price
What should be the effect on pps of such project:
a) from a dormant shell to an active project... I guess it derisks your investment.
b) This validates the Company itself... This is the first project....
c) what multiple of future earnings should we apply (what P/E) ?

Eager to read your analysis and how you have calculated that this project itself should not translate in a 0.15 cente per shares value.

[enthalpy]

I wanted to say thank you for cheap shares back in September. Hope u have a position still so when the announcement is made we all make a boat load of money.