Clement:
<<I believe that it is possible that Thermo Tech has received financing, however I highly doubt that it is non recourse financing (that is a very good form of financing usually reserved for low risk
clients) or that it will be beneficial to shareholders.
Because of the risk that Thermo Tech carries (many different kinds including litigation), it would be foolish for lenders to put the cash into Thermo Tech's name, and at the same time lenders will want a more than just a normal rate of return to compensate for the risk (IMO), and this would mean options, participation, warrants, high interest rate, etc... >>
The non-recourse financing, if it comes, would not be in Thermo Tech's name as you put it. It would be arranged by Ontario Thermo Tech, their 50% owned subsidiary, which will own and operate the Oshawa and Niagara TMPs. The 'cash' would go solely to cover the cost of designing, procuring equipment and building of the TMP's. The debt service would be paid out of the profits of the TMPs over the term of the loan(s). It is the guarantees inherent in the revenues from the put-or-pay contracts for the tipping fees and the take-or-pay contracts for sale of the animal feed, or fertilizer additives that back the loans. The creditworthiness of the companies backing these contracts will have a big influence on the interest rates. There won't be any options, participation or warrants involved.
If this financing comes, it will be one huge vote of confidence in the Thermo Master TMP. It will validate the economics and the technology in one fell swoop. It would be a BIG DEAL.
Casey |
