Brenmiller Energy (TASE: BNRG), which designs, constructs and operates energy and energy storage installations, sustained a blow in the past few days with the expiry of the non-binding memorandum of understanding for obtaining a NIS 20 million bridging loan from a private investment fund. Brenmiller Energy, controlled by its chairman and CEO Avi Brenmiller, stated that it and the lender "continue their efforts to reach commercial and legal understandings agreements between in order to enable them to sign a financing agreement for the purposes of granting a loan within a short time, but there is no certainty that the financing agreement will be signed and what will be its final terms."
Brenmiller Energy reported the MOU on the loan last month. The company planned to repay the loan in a little over a year, in March 2020, with the possibility of deferment of all or part of the repayment by a further year "in return for additional interest and subject to abiding by financial ratios." The MOU also included the allocation of non-marketable options on Brenmiller stock to the lender fund.
Following notification of the expiry of the MOU with the fund, Avi Brenmiller transferred NIS 400,000 to the company, intended to support its cash flow, as part of a NIS 2.5 million loan agreed last September.
Brenmiller Energy does not currently generate revenue, and is accumulating losses. In its latest financial statements, released in late August 2018, its auditors state that the company's management estimates that it has "sufficient resources to keep financing its activity for at least 15 months from the date of the report,", that is, until the end of November 2019.
The auditors draw attention to a loss of over NIS 7 million and a negative cash flow of NIS 12.5 million accumulated in the first half of 2018, and state that continued financing of its activity "is conditional on positive revenue flow and raising funds from external sources."
The main project that Brenmiller Energy is working on completing its installation and commercial operation is the Rotem 1 project, a plant planned to sell power to Israel Electric Corporation (IEC).
At the end of 2018, shortly after the signing of the loan MOU that has now expired, Brenmiller Energy said that it had asked IEC to postpone the date of the milestone in the conditional license for operating the production unit at Rotem 1 in the south of Israel by eight months, to February 2020, because of changes in the power plant's engineering plans and configuration, and because of deviation from the original timetable for drawing down a loan from Bank Leumi. In October last year, Brenmiller Energy drew down NIS 21 million, representing the majority of the loan it was granted by Bank Leumi for constructing the project. Also in October, Brenmiller Energy raised NIS 7 million on the stock exchange.
Brenmiller Energy is one of the worst performing stocks among the IPOs in 2017-2018. Since it started being traded in August 2017, its share price has fallen by more than 70%, giving the company a current market cap of NIS 60 million.
Published by Globes, Israel business news - en.globes.co.il - on January 17, 2019
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