Hadrian’s Wall provides against biomass loans – Biomass Premium Fuels Limited (“BPFL”) and Biomass Optimum Fuels Limited (“BOFL”) acquired the assets of Arensis Energy Ltd, Entrade Energy Ltd and Arensis Energy One Ltd out of administration on 21 December 2018. Hadrian’s Wall Secured Investments financed these acquisitions and provided additional money for working capital and capex.
BPFL has entered into a Heads of Terms agreement to establish a joint venture with a substantial UK company with extensive experience in the sector for the operation and management of BPFL. The parties have agreed to target completion of the JV by the end of July 2019. The parties are also discussing possible arrangements in connection with BOFL. Hadrian’s Wall’s investment amounts in BPFL and BOFL are GBP10.7 million and GBP6.7 million respectively and it anticipates providing additional funding to BPFL and BOFL prior to completion of the JV of up to GBP0.9 million and GBP0.5 million respectively.
The board (on advice from the investment adviser), considers that the successful completion of the JV should mitigate the risk of loss to the company and that individual case loan loss reserves are not required in respect of either of these investments at this time. Nevertheless, on advice from the investment adviser, and considering the uncertainty associated with the completion of satisfactory JV arrangements, the company has increased its general loss provisions in connection with BPFL from GBP310,000 to GBP1.4 million, and BOFL from GBP199,000 to GBP1.8 million. The aggregate increase in the general loss provision of GBP2.7 million is equivalent to 1.9% of the last published net asset value.
Assuming the JV arrangements are completed in a satisfactory manner, the adviser does not anticipate any impact on the company’s ability to continue to meet its dividend target and would expect to be able to reduce the general loss provisions. If the JV arrangements are not completed in a satisfactory manner, the outcome would be uncertain and the company would be exposed to the risk of a material loss.
HWSL : Hadrian’s Wall provides against biomass loans