CALGARY,
AB, April 13, 2023 /CNW/ - Tidewater
Renewables Ltd. ("Tidewater Renewables" or the
"Corporation") (TSX: LCFS) announces initial unit
commissioning at its Renewable Diesel (HDRD) Complex and its
financing solution to support the completion and start-up of the
HDRD facility. Following the previously announced capital
cost increase, the Corporation has significantly enhanced its
funding capacity. Tidewater Renewables is in discussion with
its lenders to seek consents for increases to its lending
facilities. It has also received additional government
support, in the form of an issuance of credits that will result in
cash proceeds of $43 million.
The HDRD Complex continues to progress on schedule and with no
change to the previously announced gross capital cost estimate of
$342 million. Construction is
currently estimated to be 93% complete with the last major piece of
equipment now on site. Construction operations commissioning
has begun on several units with final completion and start-up
expected to begin within two months. The HDRD project
continues to be a leader in safety performance with zero loss time
injuries throughout the life of the project to date.
To support the HDRD project, Tidewater Renewables has recently
entered into firm credit sales agreements that will result in
$43 million of proceeds net to the
Corporation. Proceeds from the credit sales and the
anticipated expansion of its lending facilities will primarily be
employed to offset the previously disclosed capital cost increases
at the Corporation's HDRD Complex. Tidewater Renewables
believes its enhanced liquidity will sufficiently fund the HDRD
project through start-up while providing significant additional
flexibility.
"The support from government and our current capital providers
has been fundamental to the ongoing advancement and success of our
HDRD Complex, which will become Canada's first Renewable Diesel
facility. This project will provide significant value
to our stakeholders while reducing the carbon intensity of fuels
used in British Columbia and
Canada" said Rob Colcleugh, Chairman and Interim CEO.
HDRD Complex Update
- HDRD Complex construction is progressing as forecast and is 93%
complete.
- All major equipment for the HDRD Complex is now on site and
set.
- The majority of the dry commissioning of the utility packages
is complete.
- The tank farm and rail systems are now ready for
operation.
- Target start-up is expected within two months.
- Operating at its design capacity, the HDRD Complex is expected
to generate annualized run rate EBITDA of between $90 – 115 million(1).
(1) Run rate EBITDA used
throughout this news release is a non-GAAP financial measure. See
the "Non-GAAP and Other Financial Measures" in this news release
and the Corporation's MD&A for information on each non-GAAP
financial measure or ratio.
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About Tidewater
Renewables
Tidewater Renewables is traded on the TSX under the symbol
"LCFS". Tidewater Renewables is a multi-faceted, energy transition
company. The Corporation is focused on the production of low carbon
fuels, including renewable diesel, renewable hydrogen, and
renewable natural gas, as well as carbon capture through future
initiatives. The Corporation was created in response to the growing
demand for renewable fuels in North
America and to capitalize on its potential to efficiently
turn a wide variety of renewable feedstocks (such as tallow, used
cooking oil, distillers corn oil, soybean oil, canola oil and other
biomasses) into low carbon fuels. Tidewater Renewables' objective
is to become one of the leading Canadian renewable fuel producers.
The Corporation is pursuing this objective through the ownership,
development, and operation of clean fuels projects and related
infrastructure, that utilize existing proven technologies.
Organically, Tidewater Renewables seeks to leverage the existing
infrastructure and engineering expertise of Tidewater Midstream and
Infrastructure Ltd., regarding the development of the Corporation's
portfolio of greenfield and brownfield capital projects as well as
the expansion of the Corporation's product offerings. Additional
information relating to Tidewater Renewables is available on SEDAR
at www.sedar.com and at www.tidewater-renewables.com.
Non-GAAP and Other Financial
Measures
Throughout this news release and in other materials disclosed by
the Corporation, Tidewater Renewables uses a number of financial
measures when assessing its results and measuring overall
performance. The intent of non-GAAP measures and ratios is to
provide additional useful information to investors and analysts.
Certain of these financial measures do not have a standardized
meaning prescribed by GAAP and are therefore unlikely to be
comparable to similar measures presented by other entities. As
such, these measures should not be considered in isolation or used
as a substitute for measures of performance prepared in accordance
with GAAP. For more information with respect to financial measures
which have not been defined by GAAP, including reconciliations to
the closest comparable GAAP measure, see the "Non-GAAP and Other
Financial Measures" section of Tidewater Renewables' most recent
MD&A which is available on SEDAR.
Run rate EBITDA guidance related to the HDRD Complex contains
various assumptions including a renewable refinery margin of
$90/bbl. The renewable refinery
margin is derived from vegetable oil strip pricing for the
Corporation's feedstocks, which are 50% and 40% hedged through 2023
and 2024, respectively, current diesel strip pricing, the
Corporation's previously announced Canadian Clean Fuel Regulation
credit sales and average BC LCFS credits sale prices over the past
12-months.
Advisory Regarding Forward-Looking
Statements
Certain statements contained in this news release constitute
forward-looking statements and forward-looking information
(collectively referred to herein as, "forward-looking statements")
within the meaning of applicable Canadian securities laws. Such
forward-looking statements relate to future events, conditions or
future financial performance of Tidewater Renewables based on
future economic conditions and courses of action. All statements
other than statements of historical fact may be forward-looking
statements. Such forward-looking statements are often, but not
always, identified by the use of any words such as "seek",
"anticipate", "budget", "plan" and similar expressions. These
statements involve known and unknown risks, assumptions,
uncertainties and other factors that may cause actual results or
events to differ materially from those anticipated in such
forward-looking statements. The Corporation believes the
expectations reflected in those forward-looking statements are
reasonable, but no assurance can be given that these expectations
will prove to be correct and such forward-looking statements
included in this news release should not be unduly relied
upon.
In particular, this news release contains forward-looking
statements pertaining to, but not limited to, the following: the
expected financial performance of the Corporation's capital
projects and assets; guidance with respect to forecasted run rate
EBITDA; the success and timing of the HDRD Complex and related
milestones and capital costs; and the Corporation's operational and
financial performance, including expectations regarding generating
revenue, revenues and operating expenses.
Although the forward-looking statements contained in this
news release are based upon assumptions which management of the
Corporation believes to be reasonable, the Corporation cannot
assure investors that actual results will be consistent with these
forward-looking statements. With respect to forward-looking
statements contained in this news release, the Corporation has made
assumptions regarding, but not limited to: Tidewater Renewables'
ability to execute on its business plan; general economic and
industry trends, including the duration and effect of the COVID-19
pandemic; operating assumptions relating to the Corporation's
projects; expectations around the level of output from the
Corporation's projects, including assumptions relating to feedstock
supply levels; timing and cost of completion of the HDRD Complex,
including that the project will remain on budget and on schedule;
the ownership and operation of Tidewater Renewables' business;
regulatory risks, including changes or delay to the BC LCFS credits
or CFR credits; the expansion of production of renewable fuels by
competitors; the future pricing of BC LCFS credits and CFR credits;
the Corporation's ability to monetize BC LCFS and CFR credits at
commercial prices; future commodity and renewable energy prices;
sustained or growing demand for renewable fuels; the ability for
the Corporation to successfully turn a wide variety of renewable
feedstocks into low carbon fuels; changes in the
credit-worthiness of counterparties; the Corporation's
future debt levels and its ability to repay its debt when due; the
Corporation's ability to continue to satisfy the terms and
conditions of its credit facilities; the continued availability of
the Corporation's credit facilities; the Corporation's
ability to obtain seek consents for increases to its lending
facilities on satisfactory terms; that the Corporation's enhanced
liquidity will sufficiently fund the HDRD project through start-up
while providing additional flexibility; foreign currency,
exchange, inflation and interest rate risks; and the other
assumptions set forth in the Corporation's most recent annual
information form available under the Corporation's profile on
SEDAR at www.sedar.com.
The foregoing lists are not exhaustive. Additional
information on these and other factors which could affect the
Corporation's operations or financial results are set forth in the
Corporation's most recent MD&A and annual information form and
in other documents on file with the Canadian Securities regulatory
authorities available under the Corporation's profile on SEDAR at
www.sedar.com.
The Corporation's actual results could differ materially from
those anticipated in the forward-looking statements, as a result of
numerous known and unknown risks and uncertainties and other
factors including, but not limited to: changes in supply and demand
for low carbon products; general economic, political, market and
business conditions, including fluctuations in interest rates,
foreign exchange rates, supply chain pressures, inflation, stock
market volatility and supply/demand trends; risks of health
epidemics, pandemics and similar outbreaks, including COVID-19,
which may have sustained material adverse effects on the
Corporation's business, financial position, results of operations
and/or cash flows; risks and liabilities inherent in the operations
related to renewable energy production and storage infrastructure
assets, including the lack of operating history and risks
associated with forecasting future performance; competition for,
among other things, third-party capital, materials, equipment,
labour, and skilled personnel; risks related to the environment and
changing environmental laws in relation to the operations conducted
with the Corporation's other capital projects; risks related to and
the other risks set forth in the Corporation's most recent MD&A
and annual information form available under the Corporation's
profile on SEDAR at www.sedar.com.
The foregoing lists are not exhaustive. Additional
information on these and other factors which could affect the
Corporation's operations or financial results are included in the
Corporation's most recent Annual Information Form and in other
documents on file with the Canadian Securities regulatory
authorities at www.sedar.com.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which reflect the Corporation's
expectations only as of the date of this news release. The purpose
of the financial outlooks contained in this news release are to
give the reader information about management's current expectations
and plans and readers are cautioned that such information may not
be appropriate for other purposes and is given as of the date of
this news release. Tidewater Renewables disclaims any intention or
obligation to update or revise these forward-looking statements,
whether as a result of new information, future events or otherwise,
except as required by law.
Financial Outlook
This news release contains future-oriented financial
information and financial outlook information (collectively,
"FOFI") about expectations regarding financial results, including
run rate EBITDA and annual run rate EBITDA, which are subject to
the same assumptions, risk factors, limitations and qualifications
as set out under the heading "Forward-Looking Information". The
actual financial results of the Corporation may vary from the
amounts set out herein and such variation may be material. The
Corporation and its management believe that the financial outlook
has been prepared on a reasonable basis, reflecting management's
best estimates and judgments and the FOFI contained in this news
release was approved by management as of the date hereof. However,
because this information is subjective and subject to numerous
risks, it should not be relied on as necessarily indicative of
future results. Except as required by applicable securities laws,
the Corporation undertakes no obligation to update such FOFI.
FOFI contained in this news release was made as of the date
hereof and was provided for the purpose of providing further
information about the Corporation's anticipated future business
operations on an annual basis. Readers are cautioned that the
FOFI contained in this news release should not be used for
purposes other than for which it is disclosed herein.
SOURCE Tidewater Renewables Ltd.