Nevada Geothermal Power is at risk of going out of business, according to its own auditors. A federal loan guarantee of $98.5M was for naught. The company will hold an emergency shareholder meeting on July 24 to discuss recapitalization and de-listing from the OTC exchange. That is a sign of a drowning company. Exchange listing costs are minimal for a firm with healthy cash flow, so de-listing is a desperate move to buy a month or two. Recapitalization will probably require a debt-for-equity swap large enough to dilute shareholders into nothing. The share price is already under a nickel, so a restructure will make the revalued share price not worth measuring on an exchange anyway.
There is good news for any vulture-oriented regional utility (hey, PG&E or Sempra) that wants to add some plant capacity at a bargain price. NGP has about $124M worth of PPE on its balance sheet that could at least partially satisfy creditors' repayment in the event of bankruptcy. On second thought, PG&E recently cancelled a geothermal power purchase agreement that would have cost more than 11.25 cents/kWh, so NGP's plants had better operate at less than that to be worth a look.
Geothermal is an awesome technology when dome right but even the biggest players have a hard time giving shareholders a decent return on their capital. Thanks for trying, NGP. Maybe they can still pull off a resurrection.
Full disclosure: No position in NGP (NGLPF), ever. No position in other companies mentioned at this time.