The proposed Aim flotation of renewable energy projects consultancy Rame Energy should provide investment company Pires Investments with a profit on its recent investment.
In February, Pires invested £410,000 in a three-year convertible loan note issued by Rame. No interest is payable for the first nine months and then, if the flotation has not already happened it is payable at an annual rate of 10%, accruing from the date of the initial investment. As long as the valuation of Rame is more than $33.33m before any new money is raised then the conversion would be equivalent to a discounted valuation of $25m.No valuation has been published for Rame.
Plymouth-based Rame (www.rame-energy.com) is a consultancy focused on renewable energy projects in Chile. Revenues rose 10 per cent to $6.6 million in 2012, although pre-tax profit fell from $1.3 million to $1 million.
The expected admission date for Rame is 4 April. The flotation will provide funding for projects, which Rame intends to operate, providing power to industrial customers. Santander Investment Chile is co-financing 15 MW of wind farms on two project sites in Chile. Rame has 28 onshore wind sites which have a potential total installed capacity of 1.4GW.
Rame is also negotiating to acquire the rights to acquire a 20MW waste-to-energy project in the UK which will use rubber crumb as feedstock.
At 0.06p a share, Pires is valued at £1.4m and the Rame stake could underpin much of this valuation.
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