Eco Investor Update
A Weekly News Update for Environmental Investors
March 2013 - No 120
Qube Holdings deputy chairman Sam Kaplan has indirectly sold 2,201,972 shares at $1.725 each in an off market transfer worth $3.8 million. He retains extensive direct and indirect shareholdings. (ASX: QUB)
Tox Free Solutions
Shares in Tox Free Solutions spiked to a new all time high of $3.57 on 6 March. Volume was moderately above normal. The move appears to be related to the stocks strong climb since last June when they were $2.21, the half results announced on 1 March, and recent share market gains. (ASX: TOX)
Evergreen Capital Partners has increased its interest in Energy Action from 7.1 to 9.3 per cent.
Citigroup Global Markets Australia has been dipping in and out of become a substantial shareholder, which may be related to short selling. (ASX: EAX)
ERM Power said it set new records for customer satisfaction in the 17th annual Utility Market Intelligence (UMI) survey. ERM Power scored a record 93 per cent for overall customer satisfaction among business customers, compared with an average of 52 per cent for the five other major retailers.
The survey also covered satisfaction with billing accuracy, satisfaction with energy market change information, satisfaction with value for money, value in relationship with retailer, and satisfaction with ease of contacting retailer. (ASX: EPW)
Tassal Groups shares reached a new three year high of $2.05 on 6 March. Volume was above normal, but there was no specific news. The shares have climbed strongly since last September when they were $1.12. (ASX: TGR)
Interest Rate Securities
Transpacific SPS Trust
Securities in Transpacific SPS Trust reached $93.90 on 7 March, their highest for over five years. They have been climbing strongly since October 2011. (ASX: TPA)
Unlisted Share Funds
Australian Ethical Smaller
At, $1.79, the unit price for Australian Ethical Smaller Companies Trust has reached its highest level since April 2011 when they touched $1.81.
Transpacific Industries Group
Transpacific Industries shares spiked to a 22 month high of 97.5 cents on 7 March. Volume was above normal. The shares were at 66 cents in November. (ASX: TPI)
Infigen Energy has responded to an Australian Financial Review article about the potential sale of its Australian wind farms, saying it is looking at a range of options to improve its financial flexibility.
The AFR article said Infigen is considering sales to ease its $1 billion debt burden, but would remain the operator of any farms it sold.
It quoted managing director, Miles George, as saying Infigen has fielded inquiries from parties interested in its six local wind farms but has no timetable for making any decisions.
We know that we need to do something other than just operate the assets efficiently in order to escape from the problems of having a high level of leverage, quoted The Australian Financial Review.
Mr George said Infigen wanted to reduce its leverage so that the ratio between debt and earnings before interest, tax, depreciation and amortization fell to about four times, down from seven times. That would see gearing the ratio between debt and debt plus equity fall from about 70 to about 50 per cent. It would involve a debt reduction of roughly $500 million.
The book value of Infigens assets is currently more than double its stock price, at about 67 cents a share.
The model would involve Infigen selling wind farms to a super fund or Japanese trading house that has a much lower cost of capital, but retain the role of operator. (ASX: IFN)
Carbon Conscious raised $339,500 under its share purchase plan. 6,790,000 shares were subscribed for, leaving a shortfall of 17,210,000 shares.
Directors have three months to place the shortfall at the same price of 5 cents, said executive director, Andrew McBain. (ASX: CCF)
CO2 Group is to acquire the independently operated Ecofund Queensland Pty Ltd from the Queensland Government.
Established in 2009, Ecofund is Queenslands leading provider of transaction and advisory services across carbon, environmental offsets and renewable energy markets. It has protected over 100,000 hectares as national parks and environmental offsets for blue chip clients.
Ecofund is one of Australias largest traders of voluntary carbon offsets and will complement our well established offerings in project management, environmental trading and carbon advisory services, said Andrew Grant, chief executive of CO2 Group.
The acquisition underscores our commitment to deliver a full range of environmental services, said Mr Grant.
The Qld minster for Environment and Heritage Protection, Andrew Powell, said Ecofund is a well established company providing specific carbon trading services that are best provided by the private sector. Ownership by the state and the policy constraints are limiting opportunities for the companys growth, he said. (ASX: COZ)
Shares in Greencap fell to a one year low of 4.8 cents on 4 March. There was no news but volume was higher than normal. (ASX: GCG)
Deutsche Bank has become a substantial shareholder in Galaxy Resources with a 7.6 per cent interest. M&G Investment Funds has reduced its interest from 18.6 to 17.8 per cent. Vanguard Precious Metals and Mining Fund has reduced its stake from 13.7 to 12.6 per cent. (ASX: GXY)
Micro Cap Companies
Australian Renewable Fuels
Ceramic Fuel Cells
Shares in Ceramic Fuel Cells (CFCL) fell to a low of 4.5 cents on 6 March, a day after it announced it was temporarily suspending its distribution agreement with German company Sanevo.
This was due to Sanevo being placed in insolvency administration. CFCL said it fully provided for any expected loss that may arise in its half year report. Talks on continuing with a potential legal successor company are pending.
The insolvency will have no impact on CFCLs strategy or operations, and it remains focused on expanding its sales network in Europe, said CFCL. Thanks to the increasing number of distribution partners in Europe, and recent efforts to establish its own sales force, the company is confident of its ability to deliver on its ambitious sales and growth targets. (ASX: CFU)
Clean Seas Tuna
With a new focus on the propagation and harvesting of Hiramasa Kingfish, Clean Seas says it is increasing production from 500 to 3,000 tonnes per annum over five years, and that it expects to be profitable from around 1,100 tpa.
Clean Seas has farmed Kingfish for over eight years. It says it is the only reliable producer of Kingfish fingerlings globally, and maintains a pool of genetically improved and genetically diverse broodstock for spawning.
Its existing infrastructure will support the planned expansion. Funding for the expansion of production is expected to come from a combination of cash, further asset sales, joint venture arrangements under consideration, and new equity.
Clean Seas has established markets for premium grade sashimi Kingfish in Australia, Asia, America and Europe.
Kingfish demand exceeds supply and the fish has strong and stable pricing. Market demand is over 4,000 tonnes at premium pricing, currently around $12.50 per kilogram whole weight at farmgate. (ASX: CSS)
Orbital Corporations sale of 12 per cent of Synerject to partner, Continental Corporation, for $5.8 million was not an easy one, said chief executive, Terry Stinson. It was driven by the liquidity issues facing the Group, as highlighted by the auditors emphasis of matter note in our 30 June 2012 annual report which explained the uncertainty of the Group continuing as a going concern.
The board considered selling other assets. But the other assets at our disposal our alternative fuel assets are not liquid in the short term, and are a part of our overall strategy. We also considered a capital raising, however were concerned about the dilutive effect that a (probably highly) discounted share issue would have on shareholders both in Australia and overseas.
The Synerject investment was never really controlled by Orbital, and it could not easily be sold to any party other than Continental. Ultimately Continental may itself want to be the 100 per cent owner, he said.
Orbitals preference is to retain our stake; our objective is to continue receiving the benefits of owning a portion of Synerject through recognized profits and received dividends so long as we can, and if ever the time comes to sell, to ensure the best possible value for our share.
Deutsche Bank has reduced its holding in Orbital Corporation from 6.9 to 5.8 per cent. (ASX: OEC)
Shares in Pacific Environment jumped 2 cents or 62 per cent to 5.2 cents in the eight trading days to 4 March. During the period the company released its half year report with a return to profit. (ASX: PEH)
The long discussions over taking over WestSide Corporation may soon end, with the board saying it has decided to bring the process to a conclusion in the near term. It again added that it is uncertain whether a suitable proposal will eventuate. (ASX: WCL)
Lynas Corporation is to replace its chief executive, Nicholas Curtis. From 31 March, Eric Noyrez will join the board and become the new chief executive officer.
Mr Curtis will remain as non executive chairman and focus on strategy development and the development and implementation of Lynas Shared Value program.
Liam Forde will be deputy chairman. He has been a director since December 2007 and also the lead independent director.
Mr Noyrez has a detailed knowledge of the international rare earths and chemical industries, and led the operational implementation of the Lynas Rare Earths project. Before Lynas, he spent nine years with Rhodia, a French chemical group, and was president of Rhodia Silcea, and a global supplier of products that use rare earths and rare earths technologies.
Mr Forde said Nick has been the inspirational force driving Lynas for the past 12 years. It was his experience in China that provided the pioneering vision to see the potential of the rich Mount Weld deposit, and it was his foresight and resilience that has ensured Lynas is now well capitalized and entering a new era as the first significant non Chinese supplier of rare earths to original equipment manufacturers.
Mr Curtis said Lynas has built the worlds biggest and most advanced rare earths plant, and is beginning to deliver on its vision of being the global leader in rare earths for a sustainable future.
The company said new board and management changes reflect the companys transition from developer to new producer. (ASX: LYC)
Micro Cap Companies
Carnegie Wave Energy
The project will be Australia's first commercial wave energy project connected to the electricity grid, and the associated wave powered desalination plant will be a world first. The project will provide up to 2 megawatts of power, enough for the equivalent of 1,000 houses, and reduce carbon dioxide emissions by up to 3,500 tonnes per annum.
Chief executive, Dr Michael Ottaviano, said "The beginning of construction of the Perth Wave Energy Project is a significant moment in the Australian energy industry. The green project will encourage Australian investment and jobs in manufacturing, engineering and infrastructure. Australia is at the cutting edge of the global marine energy sector, which the UK Carbon Trust forecasts will be worth $760 billion by 2050."
Carnegie's new subsidiary, CETO Wave Energy UK Ltd (CWE UK), will be based in Edinburgh, Scotland and will run all Carnegie's UK activities. Allan MacAskill will join its board, along with UK-based John Leggate, Dublin based Kieran O'Brien, and Carnegie directors Grant Mooney and Michael Ottaviano..
Carnegie said the UK is considered to be the hub of global wave activities and has cordinated commercialization support including feed-in tariffs, capital grant support, offshore testing infrastructure, legislative and regulatory support and offshore wave project leasing rounds. This support has led to significant industrial activity from power utilities, equipment suppliers and players in the supply chain.
Mr MacAskill has over 20 years of energy industry experience in offshore oil and gas and offshore wind in the UK and North America. He conceived and developed the Beatrice offshore wind demonstrator project in Scotland which pioneered large-scale windfarms in the deeper waters in the UK and was the coordinator of Europe's largest renewable energy R&D program. He founded SeaEnergy Renewables which built an offshore wind pipeline portfolio of 3325 MW in the UK, and is currently a director of Scottish Renewables, Scotland's main renewables industry body.
Mr MacAskill said there is an enormous opportunity to capitalize on the excellence resource, local skills and Government support for wave energy in the UK. (ASX: CWE)
Dyesol chairman Richard Caldwell has indirectly acquired 200,000 shares at 14.5 cents each. (DYE)
Enerji has received an order from an ASX top 200 mining company for installation preparation of a waste heat to power system at one of its gold mines in the Asia Pacific.
For an agreed initial fee, Enerji will undertake the first stages of design and planning and prepare a construction contract.
The mining company understands the advantages of the Enerji system and wants to reduce its diesel consumption and CO2 emissions, said Enerji chief executive, Greg Pennefather. It will be the first mining company in the world to have a waste heat to power system (WHPS) of this nature. It is estimated the WHPS will save over a million litres of diesel and thousands of tonnes of CO2 every year.
The contract comes after a site visit and assessment last year by Enerjis personnel, including Mr Pennefather, and subsequent proposal and commercial negotiations.
The mining company said it intends to enter into further agreements for WHPS at other mine sites it operates. Enerji expects to conduct site visits and commence assessment of their power houses in coming months. The potential is to install another three Opcon Powerboxes. (ASX: ERJ)
Liquefied Natural Gas
Liquefied Natural Gas has signed an exclusive Site Lease Option Agreement with the Lake Charles Harbour and Terminal District Authority for its proposed Magnolia LNG Project at Louisiana in the US.
The binding Agreement gives LNG exclusive rights to the project site and time to obtain all necessary approvals prior to committing to the full terms of the Site Ground Lease.
Managing director, Maurice Brand, said The project site has many valuable features, including being located on an established LNG shipping channel and close to substantial gas resources and major existing pipeline networks. (ASX: LNG)
Metgascos share price continues to slide and touched a new all time low of 8 cents on 4 March. (ASX: MEL)
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