guff
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Post by guff on May 12, 2016 14:52:35 GMT
And if we assume that the equipment is worth nothing, what does that do to the ltv? Increases it?
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on May 12, 2016 15:14:44 GMT
Didn't this appear in Saving Stream's pipeline a few months ago? I'm sure there was a pipeline loan for a waste management plant in Newcastle but it got pulled.Correct pulled 8/12 Wonder who got it Industrial Waste Facility, Newcastle – Legals instructed. £6m loan. p2pindependentforum.com/post/77012/thread
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registerme
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Post by registerme on May 12, 2016 15:45:56 GMT
It would be interesting to know why they dropped it.
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stevio
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Post by stevio on May 12, 2016 15:57:55 GMT
And if we assume that the equipment is worth nothing, what does that do to the ltv? 6.5 million to nothing is a big jump Even if worth half the valuation, it still covers the loan, albeit it might take a long time to recover this
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stevio
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Post by stevio on May 12, 2016 16:04:06 GMT
And if we assume that the equipment is worth nothing, what does that do to the ltv? That depends whether the land valuation of £7.5m is realistic, leaving £3m headroom over the 1st-charge bridge of £4.5m. Combined LTV on the land alone would be close to 90%, but there are cross-company guarantees and a PG too. Do you feel lucky? Presuming the loan defaults because the business fails, the cross-company guarantees and PG are not worth much. Presumably the other companies would have also failed by then and the owner used up his assets to rescue the business. However this seems to be a profitable business for now and the owner substantial assets.
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SteveT
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Post by SteveT on May 12, 2016 16:15:25 GMT
I'd be less concerned if we had some better projections of the near-term profitability of the reduced-scope business being operated now from the plant, but the figures provided only cover a handful of months and show such huge variances from Budget as to raise more doubts than they quell. ablrate / ablrateandy , have you seen projections beyond March 16 that give you confidence that the business will be profitable (after covering financing costs) and, if so, can you share them or give us a commentary?
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Post by ablrate on May 12, 2016 16:30:55 GMT
I was attracted by the headline return of 14%. I have read of this plant elsewhere and have had a look at the valuation document for the equipment , which, IIRIC, is the first line of security for the loan. Ignoring the borrowers current use of the building as a Waste Segregation unit, IMO we need to understand if we can recover our loans through a sale of the equipment should things go wrong. These are the point I have picked up from the valuation document and I apologise if I have interpreted anything incorrectly. This is the largest installation of Rotoclaves in the world. The use of Rotoclaves has till now been restricted to the disposal of small batch medical waste. Further investment is needed (£8m to £14m) to transform the plant into an Energy from Waste facility. The product produced, cellular fibre, has no market value. There is no market place in the UK for cellular fibre. The reception bay is undersized meaning the planned full annual throughput can not be achieved. The valuation of the plant and equipment assumes that at some point a successful Waste to Energy plant can be built to meet the specification and produce power to obtain Government feed in tariffs. The plant and Equipment has some value. Any future buyer could consider using the autoclaves but issues are; location of a suitable RDF plant to take the output volumes, transport costs of the fibre to the end user, drying out costs for the fibre. There is no market evidence that can be used to assist in reaching the valuation figure. I think I'll give this a miss. IMHO this is a gamble too far. We have a valuation on a plant that has not been demonstrated to work, the valuation is based on the original cost using depreciation principles and it will only be of interest to a specialist. Thanks for your comments. I would disagree on that it has not been demonstrated to work, as it is in use and generating revenue and the loan is also covered by he second charge on the land and property equity, along with the cross guarantees etc. Having said that each lender has to assess the risks for their portfolio and we respect your choice not to invest, of course. Regards Ablrate
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Post by ablrate on May 12, 2016 16:31:49 GMT
I'd be less concerned if we had some better projections of the near-term profitability of the reduced-scope business being operated now from the plant, but the figures provided only cover a handful of months and show such huge variances from Budget as to raise more doubts than they quell. ablrate / ablrateandy , have you seen projections beyond March 16 that give you confidence that the business will be profitable (after covering financing costs) and, if so, can you share them or give us a commentary? Hi Sevet We have seen the projections, I will seek the permission to post them on the documents section. Regards Ablrate
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Post by ablrate on May 13, 2016 8:38:49 GMT
Thanks for your comments. I would disagree on that it has not been demonstrated to work, as it is in use and generating revenue and the loan is also covered by he second charge on the land and property equity, along with the cross guarantees etc. Having said that each lender has to assess the risks for their portfolio and we respect your choice not to invest, of course. Regards Ablate Have I missed something whilst reading the valuation document? IMHO it is clearly stated that the plant is not in use. It was mothballed in 2012. Part of the equipment is being used for waste segregation (picking), but the main items are not being used for the production of cellular fibre from waste. Indeed your extract from the valuation document points out that an advanced pyrolysis system is required to make use of the cellular fibre. This system, developed in the US is a waste to power unit. I have opted to put my money in the Secured Property Loan. Hi The valuation was done in October 2015. We also included the current revenue in the Actual vs Budget documents which shows the revenues being generated and we will look to add the projections in today. Regards Ablrate
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stevio
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Post by stevio on May 13, 2016 18:11:07 GMT
Thanks, so has the business only been running since Oct 2015?
What have the profits been since then?
How does this financing cost compare to any previous financing costs?
How will this financing cost effect future profits (ie will the business still be profitable/ be able to afford the finance)?
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baldpate
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Post by baldpate on May 13, 2016 18:37:28 GMT
It would also be helpful if it were possible to actually read the Property Valuation document - which is illegible because the PDF is upside down!!
I posted a Comment to the loan yesterday asking that this be corrected, and received an automated email saying my comment was "awaiting approval". Checking again this evening, and I see that the document is still illegible and that my comment has not been made visible. I take this to mean that nobody from Ablerate has been bothered to read my submission.
Seriously underimpressed both by the lack of quality control and your failure to respond.
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Steerpike
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Post by Steerpike on May 13, 2016 19:57:56 GMT
It would also be helpful if it were possible to actually read the Property Valuation document - which is illegible because the PDF is upside down!! I posted a Comment to the loan yesterday asking that this be corrected, and received an automated email saying my comment was "awaiting approval". Checking again this evening, and I see that the document is still illegible and that my comment has not been made visible. I take this to mean that nobody from Ablerate has been bothered to read my submission. Seriously underimpressed both by the lack of quality control and your failure to respond. Not the first bit of scanning to be distributed upside down. Your PDF viewer should allow you to rotate the page, I just use ctrl-shift-num+
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baldpate
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Post by baldpate on May 13, 2016 20:28:54 GMT
Thanks for the tip, Steerpike - that keystroke combination does the trick
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unmadem
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Post by unmadem on May 16, 2016 15:18:45 GMT
ablrate maybe I'm just not seeing it but 1) what is the exit strategy ? 2) how affordable is the monthly interest rate payments compared to existing loan repayments ?
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stevio
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Post by stevio on May 17, 2016 20:47:18 GMT
ablrateandy ablrate , ATR 532 is due to finish on 29MAY16. Do you anticipate extending ATR 532 or it having any problems with repaying then? Do you anticipate D********** Eco**** Refinance still being open (provided not filled beforehand) by then? Personally, I would like to reinvest the funds in Ablrate and would like this opportunity to do so
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