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$33 million grant is overdue.RZ did not announce the $33 million grant in today's news. It should have been in their hands by today. I don't think the extension in completion of thermo 1 had anything to do with it but the financing deals they are making with their financial partners does affect it.
This post by Roosting_Vulture on the Yahoo board seems to indicate this.
As part of the restructuring necessary for the Sec 1603 grant, Raser executed a promissary note to ML. The note is payable at 15% until August, and then 18% to Feb 2011 when it becomes defaulted. The 1603 grant might pay down about $2.5 million of this note (which explains the discount).
The ML note has a very aggressive escalator clause. amount Due $24.5 M No grant by 2/16, not otherwise paid by 2/23 $22.5 M Grant <$30M by 2/16 $20.0 M Grant >$30M by 2/16 $17.5 M Grant >$30M and Convertible debt reduced by 50% Unless the grant comes in today, Raser has incurred substantial additional indebtedness at 15-18%. (The note also has an escalator term in its principal amount -- $100,000 every 30 days). It still has 7 days to pay up some way. The ML note held against Thermo expires on 2/16 and is replaced by the new one against Raser itself. Confusingly the Raser collateral is also held by Prudential, according to the note, so Raser assets are double hypothecated as of today. The grant is expected at 33M, with a rake-off of 3.8M to Raser (for "completion items"). The 29.1M residual will pre-pay the Prudential debt (on the books at 27.8M in Sept). The balance (1.3M?) will go to ML first and then (ha!) to UTC to pay its bill. Fletcher filed a 13G/A today, its is acknowledging 7.9M shares (not including the preferred and additional unexercised warrants). This is a bump of about 2M shares since its last reporting, and indicates that it may be exercising it 2008 warrants. These have a value of about 0.60 share. So Raser may have raised about $1.2M in warrants (on a cash basis). It looks to me like RZ is working to get the $33 million in order to complete some work on thermo 1. If their finances are not all above board though, the grant could be delayed further or in the worst case they may be disqualified. I thought this thing was in the bag, but it looks like that was not quite so. |
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