Ram Power - Problems Likely To End With Sale Of Jacinto Project
- Ram Power share price has dropped 50% due to lower than expected electricity production levels and dilution of shareholders to cover interest payments.
- Currently company is selling its main and only operating asset, geothermal power plant in Nicaragua, and has already received interest from a number of potential buyers. Sale expected during 2014.
- Sale is likely to result in cash windfall at a holding company, which should be sufficient to fully repay existing debt even with conservative estimates.
- Due to leveraged structure upside for shareholders is very sensitive to takeout EBITDA multiple, and could potentially result in a multi-bagger.