PVCS – interesting special situation

Monday, Dec 24 2012 by

OK, so I’m a bit late to the party on this one, but PVCS looks like it presents an interesting special situation. Let’s throw it out there, and see how it does 6 months down the line.

PV Crystalox Solar (LON:PVCS) is in the alternative energy sector. As you know, I am dead set against this sector. So is everybody else. Now read on.

What do PVCS do?

The principal activity of the Company and its subsidiaries is engaged in the production and supply of multicrystalline silicon wafers to the worldwide photovoltaic market.

… and so on. Basically, the idea here is that governments provided lots of subsidies so that solar energy could be developed. Money and investment poured into the sector. Then the governments pulled the plug on funding, and competition from China built up.

Needless to say, the whole sector got turned upside down.

So what’s the investment case here?

Well, the investment case here is that PVCS has a NCAV of £79.3m – that’s total current assets less all liabilities. Its market cap is £45.9m. Moreover, on 17 Dec 2012, PVCS announced a “radical” restructuring, in which it will eliminate employees and production in areas where there are “vast” over-capacities 9which is presumably most areas). What’s more: “The Group expects to return cash to shareholders during Q2 2013 in a manner that will provide shareholders with an element of choice as to the form in which they receive the cash,”

Not sure what they mean by “choice”, though. Surely a cheque is a cheque?

Interesting, n’est pas?


I hold no position

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PV Crystalox Solar PLC is a United Kingdom-based supplier to the global photovoltaic industry. The Company produces multicrystalline silicon ingots and wafers for use in solar electricity generation systems. The Company's three-stage production process includes ingot production, whereby multicrystalline silicon ingots are directionally solidified; block production, and wafer production. The block production process or sectioning of ingots into blocks is carried out at the Company's facilities in the United Kingdom and by its partners in Japan. Wafering of the blocks is done using wire saws at the Company's facility in Erfurt, Germany and in Japan by its wafering subcontractor. The Company markets its products in the United States, the United Kingdom, China and Japan. more »

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About Mark Carter

Mark Carter

I am a private investor living in Scotland. I am a computer programmer by trade.


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