Babcock energised by JackGreen's blueprint Email Print Normal font Large font By Rod Myer, Energy Reporter December 5, 2005
Advertisement WATCHERS of Babcock & Brown's high-profile deals since listing on the stock exchange last year could have the false impression that the investment bank isn't interested in anything worth less than a few hundred million dollars.
That impression is misleading, however. Babcock has lent its support to minnow green energy retailer JackGreen by taking part in a $2.09 million placement and boosting its relative position as second-largest shareholder.
As a result of the 22¢ a share placement, and a decision to take fees for providing JackGreen with bank guarantees in shares at a rate of 6¢ each, its shareholding has increased by 2.28 million shares to 11.14 million.
Babcock now accounts for 11.26 per cent of the company's register.
Babcock's total investment was only $428,000, a minuscule amount compared to its investments elsewhere. But JackGreen managing director and 15 per cent owner Andrew Randall said the fundraising, completed last month, would play a big part in supporting JackGreen's expansion of its green energy offer into Victoria.
It will also help JackGreen commercialise the concept of community-based power generation.
"We're looking at smaller community-based wind generation projects," Mr Randall said. "It's a concept that works well in Europe. In Denmark they're moving from 10 per cent to 20 per cent of power coming from wind, and people love it because the community has ownership in them."
JackGreen aims to develop small wind farms of 3-20 megawatts, in which community interest would range between 10 and 50 per cent.
The size of the community stake would depend on the size of the wind farm and the level of support the community was able to give, Mr Randall said.
JackGreen was exploring a range of funding options including providing power to local communities at discount prices instead of putting in cash equity. Given the fact that federal renewable energy incentives have almost been fully utilised, such deals would depend on planned new support initiatives such as that being planned by the Victorian Government, he said.
JackGreen has a market capitalisation of $26 million.
After floating last November at 20¢ a share, the price slumped to 7¢ this June. It has since rebounded to 27.5¢.
Mr Randall said the company was on track for profitability in the first quarter of next year.
JGL Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
