A BIG SUN BUY-IN CHANCE
BrightSource Files for $250M IPO: A Closer Look; Another greentech IPO aspirant with massive VC and DOE loan funding, negligible sales, big losses, and uncertain costs. And beware the desert tortoise, my son, the jaws that bite, the claws that catch.
Eric Wesoff, April 25, 2011 (Greentech Media)
"BrightSource Energy just filed for a $250 million initial public offering…The big question is: Do public markets and institutional investors have the stomach for a low-revenue, non-profitable, capital intensive energy firm with a technology unproven at scale -- plus, a tortoise problem?
"…BrightSource (BSE) is a utility-scale solar thermal player with massive funding from private equity sources and U.S. DOE loan guarantees…[It uses] an air-cooled 'power tower' architecture in which vast arrays of mirrors or 'heliostats' focus sunlight at a central elevated boiler, producing steam and powering a turbine."
(click to enlarge)
"Late last month Alstom, the French power plant firm, invested $201 million into BrightSource -- bringing the firm's total VC funding to $530 million…Separately, BrightSource has secured substantial sums for their flagship Ivanpah project…With a total project cost of $2,180 million, the US DOE Loan Guarantee program is to provide loans worth $1.6 billion, NRG has committed up to $300 million in equity, and earlier this month Google committed $168 million…The balance will be contributed by BSE and Bechtel.
"BrightSource has signed 14 power purchase agreements (PPAs) to deliver approximately 2.6 gigawatts of installed capacity to two of the largest electric utilities in the U.S., PG&E, and Southern California Edison…[estimated] as $4 billion of revenue opportunity…Ivanpah is the first project…[It] will have a gross installed capacity of 392 megawatts and a net output of 370 megawatts…"
A 12 megawatt market is projected for the next decade. (from Greentech Media Research - click to enlarge
"According to the S-1 [IPO filing], BSE has a development site portfolio of approximately 110,000 acres under their control in California and the U.S. Southwest, with the potential to accommodate approximately 11 gigawatts of installed capacity…BrightSource has lost a cumulative $177.3 million since its inception with debt and financial obligations totaling $1.8 billion…Total revenue for the firm over the last three years was $32.2 million…[primarily] from Enhanced Oil Recovery (EOR) applications…
"According to the S-1, VantagePoint Venture Partners is the majority controlling interest in Brightsource. VantagePoint holds 24.9 percent of BrightSource’s stock, Alstom has a 17.8 percent share, Morgan Stanley has a 10.5 percent share, and Draper Fisher Jurvetson owns 6.7 percent of the company. The company has had five funding rounds…[It also has environmental challenges]…[unspecified PPA pricing]…[and a protential transmission access obstacle]… So, should you invest your nest egg in BrightSource shares?"