The fund is set up for the transition to a carbon tax. The way this is done is through grants of cash or carbon credits. Depending on how the granst work I believe that the board has gone fr the cash with the view that they will invest this cash to reduce carbon.
The biggest issue with the power plant is its instability. If these funds are used to fix some of the issues they are currently experiencing then the EBITDA number jumps as productivity and profitability increases.
From that perspective we are looking at fair bit of upside.
During the restructure the view was that a long term value of the business was $24.5m that values the shares at just over $31.00. The diretors of the old Alinta then said due to the maintenance issues the best option was to sell.
If the maintenance is fixed and the lenders continue to support then we may see the share price close in on teh $30.00. Lets hope monday tells us this.
AEJ Price at posting:
$4.24 Sentiment: Hold Disclosure: Held
