News blog
Indian Energy Ltd
- BY: Andrew Hore |
- POSTED: 14/01/2011 |
Indian Energy Ltd says that it has signed an exclusivity letter with a company that is interested in providing new investment.
The exclusivity will enable the potential investor to carry out due diligence. This could lead to a significant investment or even a bid for the India-focused wind power company.
Before Christmas Indian Energy said that it was talking to a number of strategic investors in order to gain funding to expand its business.
Indian Energy is trying to conserve its cash by cutting overheads so that it can reach profitability more quickly. The company has secured an option over the Tejuva project but it still needs to secure the finance to take up the option. Indian Energy’s main shareholder Utilico Emerging Markets loaned £2m to the company and this has been increased to £2.5m.
There was still £2.9m in the bank at the end of September 2010 but that is less than the cash outflow from operations in the first half.
The Gadag project did not generate as much power as expected because a bad monsoon in Karnataka led to a lower wind resource. The Theni project in Tamil Nadu started generating power more than two months later than expected because of problems connecting to the grid. That means that it contributed for just over one month in the six months to September 2010.
Interim revenues rose from £1.42m to £2.31m. Indian Energy made an operating profit in the first half but this was not enough to cover interest charges and adviser costs. The loss fell from £2.13m to £795,000.
At 23.25p, up 2.25p, the shares are trading at a large discount to net asset value of 53p a share.
Indian Energy is capitalised at £5.93m.
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