Eastland Group Limited, the New Zealand energy company that made a $1.6 million cash advance to Innovations Development Group mentioned here last week, has elected to convert its loan into an ownership stake in an IDG partnership currently competing for a contract to provide 50 megawatts of geothermal power to Hawaiian Electric Industries’ Big Island subsidiary.
The cash-for-equity swap was noted in a letter received yesterday from Eastland’s CEO, Matt Todd.
Regarding the secured loan from Eastland Group to IDG alluded to in your blog: you are probably not aware that we have formalized our partnership with IDG and that the secured loan has been converted into equity in our geothermal partnership with IDG in Hawaii.
Todd touts the significant role of geothermal in New Zealand’s energy landscape, and expresses confidence in his company’s working relationship with IDG.
Todd also says the company was fully informed of IDG founder Roberta Cabral’s prior convictions on tax and wire fraud charges.
“They do not in any way diminish our confidence in her or in the IDG team,” Todd wrote.
We are in Hawaii working alongside IDG because we believe in geothermal energy, we have skills and capabilities we want to share and because we believe in IDG’s native to native model and their vision for a better more sustainable Hawaii.
The letter, which is unsigned and is not on Eastland’s letterhead, was send from Todd’s corporate email account.
Todd’s letter can be read in full here.
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Converting debt to equity is not a sign of confidence. It is a sign that IDG was not going to repay the loan.
How did you surmise that? The CEO of Eastland said it was a “secured” loan by IDG assets. It appears that IDG seems to be an up and up company for the loan partner to write on behalf of its “risked” loan. Sounds like all is well.
This loan was reported as ‘written off’:
The Gisborne (NZ) Herald July 13, 2013 points out that IDG is already insolvent:
EGL’s option to invest seems to have come at the price of a $1.25 million loan to fund or part-fund IDG’s involvement in the project. There was enough uncertainty over its repayment that it was written off last year.
http://www.hawaiifreepress.com/ArticlesMain/tabid/56/ID/10126/After-Receiving-Campaign-Cash-OHA-Trustees-Give-125M-to-Insolvent-Geothermal-Company.aspx
Dear Mr. Lind,
I would like to point out that when the Eastland Group loaned $1.25 million to IDG’s proposed Hawaii project in 2012, it was a “secured” loan by IDG assets. The parties came to an agreement in 2013 as to the “value” of the conversion of the loan to an equity stake that Eastland would acquire in return for the secured loan. Thus, your readers should understand that the secured loan has been fully converted to ownership in the Hawaii project. Your earlier articles were misleading on this subject and did not provide a full picture of where we are on this journey.
It should also be noted that the Eastland stake represents a small fraction of what the IDG team has invested in laying the ground work for our vision of what Hawaii’s energy future could be –if we tap the resources left to us by Tutu Pele. We are committed to making sure that geothermal, a publicly- owned asset, is used sustainably to end our dangerous dependence on imported fossil fuels. Geothermal is the only firm power option to oil we have available to us and we cannot afford to ignore it.
Sincerely,
Patricia Brandt
CEO, IDG Hawaii
“Geothermal is the only firm power option to oil we have…” Actually Ms. Brandt, there is “clean coal” which is *cheaper* than geothermal whose carbon emissions are feedstock to produce *indigenous* renewable jet fuel (that can insulate Hawaii’s tourist industry from oil price shocks) — where in displacing petrol jet fuel leaves a net zero carbon footprint. For details google “Texas Clean Energy Project” and “LanzaTech Virgin Atlantic.”
There is no such thing as “clean coal.”
I am really proud that there is a native Hawaiian company involved in developing a very “science” driven technology. Kudos to the IDG Team and good luck in your geothermal endeavors in Hawaii. How fantastic!
What “assets”? IDG doesn’t have any “asserts” just a nameplate.
And if the “assets” are so valuable to Eastland, why did Eastland tell its local NZ paper that the loan had been “written off”?
http://www.gisborneherald.co.nz/opinion/editorial/?id=33195
It looks like Eastland is happy with their loan to equity conversion. It sounds like IDG assets were off shore and not in New Zealand.
Are Patricia Brandt and Matt Todd the same person?
I just checked it out and Matt Todd is the CEO of Eastland Group of New Zealand. Patricia Brandt is the CEO of IDG, a former Department head under Governors Ariyoshi and Waihee and Chief of Staff for the OHA BoT.