Polaris Infrastructure improves financial structure through this year’s recapitalsation

Polaris Infrastructure improves financial structure through this year’s recapitalsation Plant in San Jacinto Tizate, Nicaragua (source: PowerEngineers)
Alexander Richter 15 Nov 2015

In a recent interview, Shane Downey, CFO of Polaris Infrastructure Inc. provides some insights in the success of the re-capitalisation of the company earlier this year.

In a recent interview with the Shane Downey, Chief Financial Officer (CFO) of  Polaris Infrastructure Inc. (formerly Ram Power Corp.), he discusses the revitalisation of his company’s capital structure.

In the interview, he talks about the value proposition describing Polaris Infrastructure as a “revenue-producing, cash-flow-generating company with very clear line of sight to paying a dividend in 2016.” The company expects a revenue of $50 million annually with a $40 million EBITDA. It expects a true free cash flow figure of $10-11 million per year.

Currently, Polaris has a $195 million in project-debt-level. To serve the debt, the company expects to spend about $22.8 million annually after the cpaital restructuring of May 2015. Up to then the annual debt expenditure was around $37 million.

Asked about its single-asset focus and focus on geothermal energy he comments that: “For the time being, we remain focused in Nicaragua and on geothermal. We own rights to an exploration and development property, the Casita project, and the company has invested, historically, $10 million to date on Casita, and we think that the geophysics from that on a preliminary basis have looked very favourable, and so the company is actively in negotiations, discussions right now, with the World Bank for drilling capital to further explore that resource and get it to a commercial stage. And then after that, we’re allowed to proceed and proceed to our satisfaction. At that point, we could then look to build full power plants and raise project level financing at that point.”

So despite the focus on geothermal, he indicates that the company wants to remain flexible and nimble with a possible wider renewable energy focus but primarily focusing on Latin America.

The interview also provides some great details on the recapitalisation and shareholder basis. For further details see link below.

Source: Midas Letter