TIDMLCA
RNS Number : 7732R
Low Carbon Accelerator Limited
09 November 2011
Low Carbon Accelerator: 31 August 2011 NAV
Net Asset Value ("NAV")
The unaudited NAV in accordance with International Private
Equity and Venture Capital valuation guidelines of Low Carbon
Accelerator Limited ("the Company" or "LCA") as at 31 August 2011
was GBP24.80m, equivalent to 28.8 pence per Ordinary Share.
Investment Manager's commentary and portfolio update
The 31 August 2011 NAV of 28.8 pence per Ordinary share
represents a decrease of 48.7% on the NAV of 56.1 pence per
Ordinary share at the end of the prior quarter.
This fall in NAV is predominantly due to the decision to take a
full provision against the carrying value of LCA's investment in
Proven Energy Limited ("Proven Energy"). On 14 September 2011 LCA
reported that, as a result of an acute technical defect and the
suspension of sales of Proven Energy's P35-2 model, Proven Energy
was now incurring losses that it could not sustain without a
further injection of capital. The Board of LCA also stated at the
time of this announcement that it anticipated having to make a
substantial or total write-down of its investment in Proven
Energy.
LCA subsequently announced that Proven Energy had been placed in
receivership on 16 September 2011. Whilst the final outcome of the
receivership is as yet unknown, the Board of LCA and the Investment
Manager believe it prudent to take a full provision against the
carrying value of this investment, being GBP19.9m for the equity
holding in Proven Energy and against the GBP1.75 in outstanding
loans made to the company.
The LCA portfolio is now highly concentrated, with 3 investments
together accounting for 82% of LCA's NAV.
The Investment Manager was pleased to realise some of the value
creation in the portfolio. On 6 June 2011, LCA announced that it
had sold its Preference B shares held in ResponsiveLoad Limited
("RLtec") to Ombu Limited ("Ombu") at a 70% increase in value by
reference to LCA's adjusted book cost of investment in RLtec.
RLtec,which represents 18% of NAV, has continued its positive
momentum in its work to deliver load balancing services under its
contract with National Grid including its 10-year agreement with
Sainsbury's to fit dynamic demand technology to the supermarket's
heating and ventilation systems, which went live in the prior
quarter.
Sterling Planet Inc. ("Sterling Planet"), which is LCA's largest
investment by carrying value representing 53% of NAV, has continued
its discussions with a number of parties regarding potential
additional investment, which would be used to strengthen the
company's balance sheet further and to consolidate its position as
the market leader in its space in the US. The Investment Manager is
playing an active role in progressing and structuring this
transaction to enable it to provide a path to liquidity for
LCA.
Sterling Planet's order book for the delivery of Renewable
Energy Certificates ("RECs") has recently been given a significant
boost, with the company winning a material contract with a major
utility company in California. This will add to its existing
customer base of blue-chip companies such as Pepsi-Co, Detroit
Edison and Intel Corporation.
On 7 July 2011 LCA announced that QuantaSol Limited
("QuantaSol") had completed an agreement to sell its core assets,
including intellectual property rights, to JDS Uniphase (JDSU) in a
cash transaction. JDSU are a Nasdaq-listed world-leading supplier
of optical, communication and Concentrating PV (CPV) components.
LCA subsequently received an initial payment of GBP400,000 from the
proceeds of this asset sale, with further balancing payments
expected in due course.
LUMEnergi Inc. ("LUMEnergi") is currently operating behind plan
and the Investment Manager and other members of the investor
syndicate in LUMEnergi are working closely with the company to
bring it back on track through a revised strategy for execution of
its business plan. However, given the difficult market conditions
and the time taken to implement the revised strategy, a provision
of 25% has also been made against the carrying value of LCA's
investment in LUMEnergi.
Furthermore, the challenges faced by both Eco-Solids
International Limited ("Eco-Solids") and Vykson Limited ("Vykson")
have meant they are also operating behind plan and, due to the
delays in commercial progress at both companies, a provision of 50%
is being taken against the carrying value of LCA's equity holding
in both cases.
On 3 August 2011 LCA announced that it had purchased the 20%
equity stake in Vigor Wind Limited that was owned by Proven Energy
for GBP150,000. Vigor Wind Limited is an 80% owned subsidiary of
Vigor Renewables Limited ("Vigor"). Furthermore, on 28 October 2011
LCA announced that it had invested a further GBP200,000 in Vigor in
the form of a secure loan to provide the company with essential
working capital for the development of its existing asset pool.
Excluding the share purchase in Vigor Wind Limited from Proven
Energy, LCA has invested an aggregate GBP900,000 in Vigor being
GBP500,000 in equity and GBP400,000 in loans.
The UK Government recently announced its proposal (subject to
consultation) to dramatically reduce the Feed-in Tariffs applicable
to new solar PV installations; however,no proposals were announced
that would reduce the attractiveness of the tariffs for wind. We
therefore expect Vigor to benefit from its pipeline of wind
projects, as originally envisaged.
Whilst the write-down in carrying value of Proven Energy is
extremely disappointing, the Investment Manager is continuing to
drive towards realisations from elsewhere in the existing
portfolio.
About Low Carbon Accelerator: www.lowcarbon.gg
Low Carbon Accelerator Limited is a closed ended investment
company created to invest in a portfolio of fast-growing low carbon
businesses. The Company listed on the AIM Market of the London
Stock Exchange on 11 October 2006, raising GBP44.5 million. On 26
June 2009, the Company announced that it had raised a further GBP10
million, net of expenses, following the successful placing of a
further 41.6 million shares.
The Company invests principally in companies which provide low
carbon products and services across the following sectors:
-- Energy efficiency (reductions in energy inputs at source,
improved conversion and reductions at point of use)
-- Energy generation (sustainable and clean energy, micro and distributed generation)
The Company's investment strategy is to target trading
businesses with patentable technologies and products with a clear
commercial application and the opportunity to gain a large market
share of a new or expanding market. The Company focuses on
businesses with experienced management teams who have developed
commercially viable products providing easily adoptable solutions
which deliver immediate reductions in carbon dioxide emissions.
Enquiries:
Low Carbon Investors Limited Steve Mahon, CIO Tel: +44 (0)20 7631
Andrew Affleck, 2630
CEO
Grant Thornton Corporate Colin Aaronson, Tel: +44 (0) 20 7383
Finance Melanie Frean 5100
This information is provided by RNS
The company news service from the London Stock Exchange
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