Cielo Waste Solutions
Ticker: CMC.CN / CWSFF
Listings: Canadian Securitites Exchange / US OTC
Market Cap: 340 MCAD at time of posting
Share price: 0.99 CAD at time of posting
Our biggest portfolio holding Cielo Waste Solutions today (3/3 2021) announced that they have acquired an interest FREE loan of 10 million CAD which will be used to buy a site near Edmonton Alberta for Cielo’s planned 100 % owned waste to high grade renewable fuel facility (“Edmonton Facility”). The factory will be able to generate annual revenues of 55 million CAD once completed. Cielo writes the following in the press release:
“This marks the beginning of Cielo’s expansion plans which is ahead of its previous schedule. Cielo will have the discretion to use the balance of the funds as needed, for working capital purposes, and to repay in whole or in part Cielo’s largest secured lender, which is currently owed approximately CDN$3.8 Million. “
The terms for the 12 month loan are impressive for a company of Cielos size, no interest is payed and the loan may only be converted into shares at a price per share of 1.02 CAD . Also Cielo has the right to repay the loan at any time during the 12 month agreement. The only drawback is that Cielo is required to pay a transaction fee of 700 000 CAD and also commission to a third party amounting to 800 000 CAD.
Cielo comments on this transaction in the press release: “Cielo believes these fees and commissions are well in line with industry standards and eliminate high interest payments and saves Cielo millions in debt payments without significant dilution of the company shares with an exceptional conversion strike price.”
CEO of Cielo Don Allan Comments on the transaction:
“To be able to purchase this land for cash and no mortgage allows Cielo the ability to choose numerous options to raise the $50 million for the construction of this facility and the extra money required to prepare the land. The plant will initially be engineered to produce annually approximately 33 million liters of high-grade renewable diesel which at todays prices is approximately CDN$55 million in annual revenues. The land is large enough to allow for multiple expansions. Cielo is having an amazing start to 2021 and is poised to continue strong growth on all fronts.”
I certainly agree with the statement from CEO Don Allan And Cielo confidently remains our largest portfolio position by a far. Cielo is one step closer to becoming a multi million dollar business.
If you missed it check out Robert Mc Whirters discussion on Cielo from BNN on 26/2 2021 where he puts an insight that the company’s share price could be worth 8 CAD .
Link to press release from 3/3 2021 :
As always do your own research and this is not to be considered financial advice.
Robert McWhirter which gave Cielo a price target of 8 USD when we visited BNN (link to interview: http://www.bnnbloomberg.ca/market-call/robert-mcwhirter-discusses-cielo-waste-solutions~2149646).