371 replies to this topic

[Pop2mollys]

Last analyst... "you got a good deal"

Next analyst... "looks like you got a good deal"

[explo]

Out of 265M CSIQ paid Sharp, the skeleton cost $130M and 135M was projects construction Sharp already put out for.

Thanks. Got it. And the book value of that skeleton that CSIQ pay $130 for is the remaining question.

[odyd]

The enterprise value is around $500M.  This means they paid $0.50 per ~ $1 value. However the enterprise has borrowing lines which are not drawn etc.

[explo]

Half of the 1GW is contracted for modules with third party.

Not a biggie. CSIQ has no utilization problems.

[odyd]

Pretty far advanced in yieldco, Potter states.

[odyd]

Where is Frank He?

[Pop2mollys]

Pretty far advanced in yieldco, Potter states.

They are talking a lot about Yieldco, everything they are saying says its pretty much a done deal. Qu even said it's will create tremendous value for shareholders... And guess what qu is largest shareholder and he hasn't sold a single share.

[explo]

The enterprise value is around $500M.  This means they paid $0.50 per ~ $1 value. However the enterprise has borrowing lines which are not drawn etc.

Thanks. Finally we got the price tag. This was what I was looking for. So using the 265m it would mean Recurrent has 235m net debt. Looks good to me.

[explo]

They are talking a lot about Yieldco, everything they are saying says its pretty much a done deal. Qu even said it's will create tremendous value for shareholders... And guess what qu is largest shareholder and he hasn't sold a single share.

Any thing on target scale to launch it and the timeframe? 2017?

[Pop2mollys]

Any thing on target scale to launch it and the timeframe? 2017?

Potter said they are far advanced on Yieldco plans. I'm guessing official announcement in 4 weeks.

[odyd]

I think what they are saying is $130M is premium, $135M is invested.  The enterprise would consist of $135M, leaving around $365M of value. So that value could be cash, other assets, offices etc. I assume that $135M is not leveraged so is the equity supported. If all would be drawn on credit lines I would imagine $365M could be of debt. As I understand it.

[Pop2mollys]

Man I'm loving Qu's confidence.... He is a monster


Probably 7-8 congratulations from analysts... Even Goldman Sachs

[odyd]

No Frank what a douche.

[Pop2mollys]

No Frank what a douche.

Where's Gordo also? He might be in ICU...

[odyd]

I wished they had a pro-forma balance sheet presentation, but I think this will be known at one point, anyways.

[explo]

I think what they are saying is $130M is premium, $135M is invested.  The enterprise would consist of $135M, leaving around $365M of value. So that value could be cash, other assets, offices etc. I assume that $135M is not leveraged so is the equity supported. If all would be drawn on credit lines I would imagine $365M could be of debt. As I understand it.

Ah thanks. So on transaction date there is 135m equity in Recurrent, thus a 130m premium over book value. Makes sense to give a premium for those 1 GW PPA and the 3 GW long-term pipeline value. So 135m equity (net assets) and 235m net debt at transaction date is my assumption now.

[explo]

Potter said they are far advanced on Yieldco plans. I'm guessing official announcement in 4 weeks.

Ok. Maybe they'll launch it with unfinished projects, but with PPA and EPC contract (with Recurrent) in place.

[odyd]

Explo, it is hard to tell EV is generally a debt plus mcap no cash. No idea what Potter covers in EV. They paid $265M to get $500M in his words.

Qu called 130M as premium and $135M as projects. While $135M could be borrowed, I doubt it was if it was described in this fashion. So my best bet is 500-135M equals to be 365M in debt. Since EV does not have cash, that $130M of premium paid to Sharp could be for $50M in cash, lowering that debt threshold to $315.00, This is how I see it. $200M will be paid in Q1 and $65M in Q2, I imagine we will hardly notice it on balance sheet.

[Pop2mollys]

Ok. Maybe they'll launch it with unfinished projects, but with PPA and EPC contract (with Recurrent) in place.

Qu also said this new US pipeline could be cornerstone for Yieldco. They aren't lining up and buyers for projects but said if they want to sell it would be easy. No buyers lined and all of this 1GW under construction in 2015 makes me think this will be the heart of Yieldco.

Not only did they buy 1GW late stage they bought 1GW that's already under construction. What a perfect deal for CSIQ to cement a Yieldco. Where else could they pick up 1GW of projects on short notice what would all be done in less than 2 years?

[explo]

Explo, it is hard to tell EV is generally a debt plus mcap no cash. No idea what Potter covers in EV. They paid $265M to get $500M in his words.
Qu called 130M as premium and $135M as projects. While $135M could be borrowed, I doubt it was if it was described in this fashion. So my best bet is 500-135M equals to be 365M in debt. Since EV does not have cash, that $130M of premium paid to Sharp could be for $50M in cash, lowering that debt threshold to $315.00, This is how I see it. $200M will be paid in Q1 and $65M in Q2, I imagine we will hardly notice it on balance sheet.

EV = mcap (or transaction price) + debt - cash

I think we can read this as:

Equity = Asset - Liabilities = 135m
Net debt = debt - cash = EV - mcap = 500 - 265 = 235m

I'm happy with that structure.