- ReNu Energy (RNE) has signed a deal with Resonance Water Finance UK to sell its 30 per cent interest in the Goulburn and Beaudesert bioenergy projects for $500,000
- The projects have underperformed over the last 12 months, due in part to the effect of the bushfires and COVID-19
- This has led to reduced revenue, which the company says is expected to continue for the foreseeable future
- As of June 30, 2020, the company had $2.45 million in cash reserves
- The balance will be bolstered by roughly $780,000 from the sale of the projects and payments for a second generator project at the Beaudesert facility
- ReNu Energy shares are steady at market open, trading for two cents
ReNu Energy (RNE) has signed a deal with Resonance Water Finance UK to sell its 30 per cent interest in the Goulburn and Beaudesert bioenergy projects for $500,000.
The Goulburn Project, located in New South Wales, achieved practical completion and began operations in February 2018. Likewise, the Beaudesert Project, located in Queensland, was built and commissioned in 2011 and acquired by ReNu Energy in 2015.
ReNu Energy says the projects have underperformed over the last six months, resulting in reduced operating and processing hours, which in turn has led to a decrease in revenue. The company cited the combined effects of recent droughts, bushfires and COVID-19 as the primary factors behind reduced demand for electricity.
The company and its management are expecting these conditions to continue for the foreseeable future, and that a capital injection would be required to meet ongoing operational requirements.
Boyd White, Chairman of ReNu Energy, noted that the company had explored a variety of options prior to its decision to sell its interest in the project to Resonance Water Finance UK.
“Having assessed these alternatives and taking into account ReNu Energy’s available cash, our focus on closing out the Cooper Basin remediation activities and actively seeking out new project opportunities, the Board and I believe that this transaction represents the best option to advance the interests of our shareholders,” he said.
As of June 30, 2020, ReNu Energy had $2.45 million in cash reserves, which is expected to be bolstered by the sale of the projects, as well as a further $283,000 from the sale of related services.
Greg Watson, CEO of ReNu Energy, said the company has been successfully able to reset its cost base following a strategic review in February this year.
“Taking into account the increase in available cash from the agreement with Resonance, ReNu Energy is well-positioned to complete the works to allow the surrender of GRL3 in the Cooper Basin and actively seek new merger or acquisition opportunities,” Greg added.
ReNu Energy shares are steady at market open, trading for two cents at 10:25 am AEST.