Small Talk: Renewables group eyes higher profile with London listing

Click to follow
The Independent Online

Another week, another listing – and this time investors can look forward to something different from the usual crop of oil & gas prospectors and mining plays. Australia's Wasabi Energy is already traded down under and this week, it will make its debut on AIM with a secondary listing as it seeks to raise its profile and broaden its investor base.

It invests in alternative energy projects and its biggest interest is in Global Geothermal Limited, which owns the Kalina Cycle process, a way of cutting down the cost of generating thermal power.

Typically, thermal power plants work by heating water in a boiler, and then blasting the steam though a turbine to generate electricity. The Kalina Cycle is making that process efficient. In very simple terms, it works by introducing ammonia, which brings down the boiling point of water. That in turn makes it cheaper to heat it up.

Advantages include a 10 to 50 per cent hike in power generation from the same amount of heat, according to broker and nomina-ted adviser Cenkos Securities, whose analysts also point out that, as the underlying principles remain the same, the technology is already well understood by the power generation industry.

"The Kalina Cycle is now gaining acceptance globally as the most efficient process to convert low grade heat into electricity," Cenkos said. "It can deliver up to a 50 per cent improvement in power generating efficiency over traditional or organic processes. This makes the Kalina Cycle ideal for utilising heat generated from industrial proces-ses such as steel or cement making to supplement the otherwise purchased power requirements of the manufacturing facilities."

We are certainly intrigued. The method was applied at the recent Shanghai World Expo in China, where the Kalina Cycle was used to power up the spectacular lights at the corporate pavilion – the so-called "Magic Cube" or "Dream Cube" – and looks set to become more common in coming years.

Two final points. First, it is worth taking note of Wasabi's management team, particularly chairman John Byrne, who used to head Cambrian Mining and Coal International. Both were sold and Mr Byrne went on to chair the buyer, Western Coal Corporation, which recently became the subject of a $3.2bn (£2bn) bid from US group Walter Energy.

Second, Global Geothermal and the Kalina Cycle are only part of the story. Wasabi also has a 23.3 per cent stake in Australian Renewable Fuels and owns half of unlisted Aqua Guardian Group.



PIM turns plastic into plywood



From renewables to recycling. AIM-listed Environment Recycling Technologies holds the rights to a neat process that turns mixed waste plastics into commercially viable products. ERT calls this Powder Impression Moulding – or PIM for short.

The interesting thing about this method is that it enables the recycling of unsorted and mixed plastic waste, meaning less leg work and lower costs. This morning ERT is expected to announce that 2K Manufacturing, which makes industrial products using the PIM process, has begun large scale production of EcoSheet, an environmentally friendly alternative to plywood, at its Luton plant

This could be big business for ERT, which could supplement its licence fees with royalties as 2K ramps up production of EcoSheet.

The UK alone uses over 20 million sheets of standard plywood every year. EcoSheet is fully recyclable at the end of its lifespan and 2K is looking to manufacture up to 4 million sheets next year.

We would keep an eye on this one, not least because of the potential for applications beyond plywood. Possibilities include roof tiles and pallets and, further out, PIM could even be applied to making body armour for the defence sector.



John Laing fund set for dealings



Back to listings now, and besides Wasabi on AIM, this week will also see the main market admission of John Laing Infrastructure Fund (JLIF). The investment fund announced its intention to float in October and, the other week, hit its target of raising £270m by offering shares at 100p apiece to both retail and institutional punters. The money will go towards acquiring a seed portfolio of 19 investments from the infrastructure developer John Laing Group, which is owned by the asset manager Henderson.

It is quite a collection and includes the Ministry of Defence Headquarters in Whitehall, a section of the M40 motorway and the Metropolitan Police firearms and public order training centre in Gravesend. The portfolio is independently valued at £260m, giving the fund a net asset value on admission of 98.1p per share. John Laing Investments, a part of the John Laing Group, has subscribed to around 23.1 per cent of the shares issued at launch.

On the management front, JLIF is chaired by Paul Lester, the chief executive of the privately owned road fuel supplier Greenergy and the former chief executive of VT Group, which he led from July 2002 until it was taken over by Babcock International. The stock, which will trade under the ticker "JLIF", will be admitted to unconditional dealings on the London Stock Exchange's main market this morning.

If you like keeping track of these things, JLIF will be the second infrastructure fund to list in London this year. The first was GCP Infrastructure Investments, which floated over the summer.

Comments