[BUY] AEG: Funding In Place (March 27, 2017)

[BUY] AEG: Funding In Place (March 27, 2017)

Active Energy Group (AEG LN), the London quoted renewable energy, forestry management and timber processing business, on March 15th announced a successful issuance of USD 14.2 mn in convertible loan notes, which fully secures company’s needs for the construction of its first industrial-scale CoalSwitch plant, enabling the next vital step of the technology’s commercialization. The technology utilises low value wood, timber, forestry and pulp mill/ saw mill by-products to produce the world’s first ‘drop-in’ biomass fuel that can be mixed at any ratio with coal or completely replace coal in existing unmodified coal powered fire stations globally. The funding will be provided as a 5-year instrument, having a positive impact on company’s capital structure.
We note a STRONGLY POSITIVE impact of the funding on the company and basing on our DCF valuation approach, we reiterate our BUY recommendation, with an updated target price of USD 0.12 per share (GBp 9.5),implying an upside of 264% to the current market price.
Please download the pdf version of our report on AEG to find out more.