MPC Caribbean Clean Energy Limited (MPCCEL) shareholders are still awaiting the completion of the company’s reorganisation, which will grant MPCCEL direct ownership of the renewable energy assets currently held by MPC Caribbean Clean Energy Fund LLC in the Cayman Islands.

According to MPC, the transfer of the Class A share, which represents the management share in the listed entity, has been executed in escrow pending confirmation of the registration of the additional Class B shares by the regulator.

“Upon the regulator’s confirmation of the registration of the shares, the transaction documents will be released from escrow, and the transaction will close. This is expected to take place within the next four weeks, followed by the relevant material change and other post-closing filings, and the listing of the additional Class B shares on the JSE and the Trinidad and Tobago Stock Exchange,” said MPC’s capital representative Marie Claussen during the recent annual general meeting.

She added that the next step will be the deregistration and liquidation of the Cayman structure, which is targeted to be completed by the end of this year or Q1 2025. MPCCEL added that the reorganisation process has been complex and daunting, involving multiple countries, companies, and regulators. However, the company has announced that all necessary documents have been signed and are being held in escrow.

“As soon as we receive approval for the issue of the additional Class B shares from the Securities and Exchange Commission in Trinidad, we will be in a position to confirm a closing date. At that point, the documents will be released from escrow, the shares will be issued, and the assets will be transferred,” said Glenn Hamel-Smith, partner at Trinidadian Hamel-Smith law firm.

Class B shareholders and promissory note holders will not receive dividends in 2024 due to a shortfall in the company’s budgeted electricity generation forecast and the ongoing construction of Manta Plata 2 in the Dominican Republic. Gözde Kurusoy, director of project finance at MPC, explained to the shareholders that MPC Caribbean Clean Energy’s projects generated 217 GWh of energy in 2023, resulting in $23 million in revenue and $17 million in EBITDA (earnings before interest, tax, depreciation, and amortisation). Although energy generation was 11.5 per cent higher than the previous year, each project fell short of its budgeted electricity generation forecast due to various reasons. Additionally, the company is relying on the fund’s distributions, which are currently being negotiated with the senior lenders of its investees regarding the 2024 electricity generation distributions that will enable 2025 distributions. Approval is expected, but it remains pending. Shareholders, however, pressed for updates on the timeline and minimum threshold for liquidity reserves, seeking clarity on the company’s financial preparedness for the future.

“The fund entity, the Cayman Island entity, will be dissolved, which means that we will save approximately US$350,000 per year. The normal running expenses of the company are approximately US$300,000 per year, and that is its scheduled liquidity reserve for the coming year,” said Juste Kubiliute, head of asset management, renewable energy, in response to questions.

The current value of the reserve in the fund is approximately $700,000, which will cover fund expenses and any reorganisation costs approved by shareholders. The company’s investment value stands at US$30.4 million as of 2023. According to Fernando Zúñiga, chairman of the board of directors and executive director of MPC Caribbean Clean Energy, the investment value increased due to improved macroeconomic conditions in Jamaica, resulting in a lower discount rate and a significant impact from the utilisation of remaining capital for Monte Plata’s Project Phase II. The company reported a net comprehensive income of US$1.5 million, translating to earnings of US$0.07 per share.