The highlights from the last months include:
- Initiated discussions and engaged in focused negotiations with one company who will be providing the biogas plant to ZooShare on a Design/Build/Finance/Operate basis, and also be responsible for feedstock over the long term
- Attended nearly 40 events to spread the word about ZooShare and our bonds
- Decided to stop selling bonds when the Offering Statement expires on Sep/30
- Re-initiated discussions with long term debt providers
- Added two new members to our Board – Andrew and Melissa
Design and Construction
We spent the first part of 2016 working with one company on a Design/Build/Finance proposal, and looking forward to beginning construction in May or June. However, we were not able to come to an agreement that worked for ZooShare, and as a result, changed our approach and began working on a Design/Build/Finance/Operate model with a different company. This change meant that we did not begin construction as originally scheduled, but it also means that we will have a well-run, well-fed biogas plant with reduced maintenance costs and higher average uptime from year-to-year. All of this means a 4-6 month delay to the start-up date, but with more stable and sustainable cash flows once we get there.
At this point, we see construction starting in November and the plant reaching its Commercial Operation Date next Summer.
As of August 16th, we have sold $622,600 of the 5% bonds, which are currently sitting in an escrow account awaiting the completion of construction. Our Founders’ Club bonds also matured this month and we are pleased to share that over 70% of Founders Club members decided to roll-over their initial investment into new bonds.
As noted in the newsletter, we have made the decision to stop bond sales once the current Offering Statement expires on September 30. This was not a straightforward decision – without all the feedstock under contract, we have not been able to get sufficient financing from a commercial lender, and selling bonds in small increments like we have has been an expensive way to raise money. Ultimately, the path that we’ve been carving out over the last couple of months made the decision easier – with long term feedstock and operating & maintenance agreements with a reputable firm, we can get the funds we need all at once from a commercial lender at a lower cost compared to selling bonds. Selling bonds also requires a lot of organizational attention, between attendance at the many events and speaking to so many current and potential investors, much of our time, energy and budget goes into this activity. Once they’re closed we can focus exclusively on construction.
We have decided that our best approach is to align with a company that controls decontamination equipment that can meet our needs through their existing contracts and capacity. This will not prevent us from receiving organics from local grocery retailers. ZooShare will still receive market-based rates for the organics it accepts, while also leaving potential for sponsorship revenues to grow over time.
As discussed elsewhere in this update, we are negotiating this agreement in conjunction with the design/construction and operating/maintenance agreements to ensure that all integrate seamlessly and minimize operating risk.
As you know, at this year’s Annual General Meeting, we added a new member to our Board of Directors: Melissa Felder has run her own environmental consultancy since 2001, with a focus on project management, business development, stakeholder engagement, research and technical analysis and environmental compliance. She has specific academic and work experience related to bioenergy, and has a Masters in Biological and Chemical Engineering.
Andrew Tarasiewicz joined the Board more recently after Peter Roles stepped down for personal reasons. Andrew is a Senior Consultant at KPMG’s Infrastructure Advisory practice. Specializing in renewable power generation, Andrew supports clients with M&A, financial advisory, diligence, and strategic advice, he also previously worked at the IESO and had a hand in the designing and launching procurement initiatives, like the FIT program.
Both of their bios can be found here: https://zooshare.ca/team/