PVCS – interesting special situation

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?

11p

I hold no position