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Investors Lose £24 Million In Wind Scam

September 27, 2021

By Paul Homewood

h/t Lez

 

Beware green investments!

 

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Holders of "mini-bonds" issued by Future Renewables Eco, a wind farm investment company, are braced to lose more than half their investments after it collapsed into administration on Sept 17.

It owned 10 wind turbines across Britain and was funded by 750 bondholders who ploughed £24m into the company between 2015 and 2017. 

They were due to vote on Sept 18 on whether the company should be wound up or placed in administration, but the company’s bosses said early voting suggested an administration was inevitable. The company stopped paying interest in May of this year.

One investor invested more than £150,000 of his inheritance in the bonds, which paid up to 9.5pc per year.

He said: “I was a fool. I searched for an ethical investment. I have grandchildren and I wanted it to build up the capital and support the wind industry.”

He thinks Future Renewables was too optimistic about how much money could be made from selling the electricity to the grid, a key part of its business plan.

https://www.telegraph.co.uk/money/consumer-affairs/invested-150000-inheritance-wind-farms-fear-gone-good/

 

I really cannot understand people who invest so much money in any single company, no matter how attractive it may look. I suspect they were duped by the high rates of interest on offer, which really should have set alarm bells ringing.

But I have no sympathy whatsoever with anybody who prioritises “ethical investment” over financial commonsense.

A quick look at the Annual Accounts of this company shows its whole business model was doomed to fail. The first thing to notice is that the latest set of accounts are for June 2018, filed in February 2019. Clearly the company has been in trouble for a long time.

Those Accounts show how much they have relied on subsidies for their income:

 

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Feed in Tariffs and ROCs account for 72% of turnover, working out at £91.60.MWh. In contrast, electricity sales only earned £35.02/MWh

As you will see, they chalked up a loss of £1986K, before revaluation gains taken on the purchase of another wind farm during the year.

A glance at the P&L shows that the company was effectively bankrupt three years ago:

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With turnover of £593K and operating costs of £982K, the company clearly was not viable. And that is before interest payable to bondholders of £2457K. Bondholders, by the way, were owed £15 million at the time.

The company only managed to stay afloat in 2018 by borrowing £4 million from bondholders that year.

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Unfortunately investors like this guy have been fooled by the lies put about by the wind industry and renewable lobby, who have deceived the public into thinking that wind power is cheap and efficient.

As the Future Renewables Eco’s bondholders are now finding out to their cost, it is nothing of the sort.

42 Comments
  1. September 27, 2021 10:37 am

    9.5 percent??? In today’s market? If it sounds too good to be true…..
    Fxxxing idiot

    • Andrew Mark Harding permalink
      September 27, 2021 12:16 pm

      UK Base Rate is currently 0.1% a 95x return???

      A fool and his money are soon parted!

  2. PaulM permalink
    September 27, 2021 10:39 am

    Gone with the wind I suppose.

    • JohnM permalink
      September 27, 2021 4:11 pm

      I really did laugh out loud at that comment. Thank you.

  3. Eddy Barrows permalink
    September 27, 2021 10:44 am

    Perhaps you could make a film about it; how about calling it “Gone with the wind”

  4. September 27, 2021 10:52 am

    “collapsed into administration”! I guess that’s the renewables lobby’s definition of “getting cheaper”.

  5. Gerry, England permalink
    September 27, 2021 10:58 am

    A fool and his money are soon parted. As indeed they were.

    Liquidity of an asset is also something to consider as in how easy is it to sell it should you want to. With market traded stocks and shares, including some bonds, it is very easy but with something like this, not so sure. Especially if there is a crash coming.

    Yes, 9.5% is high but there are some things such as fine wines, vintage whiskies that can make a good return and you do own an asset that is not propped up by subsidies. At least you could drown your sorrows if it all goes wrong.

    • Phoenix44 permalink
      September 27, 2021 12:42 pm

      That’s capital gain, not interest. Frankly there’s no way Ofgem should allow an after tax return on assets, sufficient to pay 9% interest on a bond. I see from the accounts that they sold debt to High New Worth Individuals, so bypassing some FCA requirements.

  6. Jack Broughton permalink
    September 27, 2021 10:58 am

    I’ve just watched Mel Brooks’ film “The Producers” again. This looks very like the scam that they produced except that in the film the scheme was an unintended success: wonder where all the “administrative” costs went?

  7. Ian Magness permalink
    September 27, 2021 11:03 am

    A brilliant case study Paul – thank you.
    In addition to the points you make I was most intrigued by the important line “Gains on financial assets at fair value through profit & loss”, which is of a similar order to the entire turnover and amounted to 2 1/2 times turnover in the previous year. The – clearly non-cash (indeed the auditors added it back in to the cash flow statement) – “gain” resulted in the “Total comprehensive income” line being positive and thus, no doubt, facilitating director and/or stakeholder payments.
    Just what is a “gain on a financial asset”? NB There is no accounting note on this indicated. If it was a hedging derivative it should surely not have been in the P&L unless – in part or full – it was realised as cash, which it wasn’t.
    You suspect dodgy accounting even in these car-crash statements.

    • September 27, 2021 12:25 pm

      I think its a wind farm they bought out, and have “revalued” it. All very subjective of course!

      If it really had been worth much more than they paid (around £800K) the company selling it would surely not have sold at that price

      • Phoenix44 permalink
        September 27, 2021 12:33 pm

        You have to be peculiarly compliant as an auditor to believe that somehow these guys bought an asset for much less than it was “worth'”.

  8. tom0mason permalink
    September 27, 2021 11:22 am

    If anyone wishes to have an investment tip, I should look to coal for a long term sustainable future. That and fossil fuel refiners and engine makers.

    • Phoenix44 permalink
      September 27, 2021 12:38 pm

      As we are seeing with gas, when demand exceeds supply, prices rise. A few fossil fuel firm that hangs on to its assets might well find its value rising as other more foolish businesses give in to the Green fascists.

    • roger permalink
      September 27, 2021 1:54 pm

      The old adage “never sell shell” is paying off very well this month I am very pleased to report.
      That was a no brainer to buy all the way up from under £9 a share and still has a way to go.

  9. Mack permalink
    September 27, 2021 11:30 am

    ‘Investors lose £24 million in Wind Scam’. That’s peanuts. The great British taxpayer has been taken to the cleaners for billions by similar bird chopping shysters, corporate troughers, NGOs, corrupt or gullible politicos and the useful idiots in the media etc who encourage them.

  10. September 27, 2021 11:42 am

    I wonder how much the directors of the company paid themselves to run the scam?

  11. Coeur De Lion permalink
    September 27, 2021 11:49 am

    My advisors recommended Octopus as a good investment. They are doing well on the back of taxpayer subsidies. But I didn’t take their advice.

    • September 27, 2021 2:36 pm

      Numerous companies are doing very well on the back of irrational government regulations. The question is whether that situation will change. And if so, whether investors will be bleating about their losses, after years of gains.

      Not only that, but some of the money flows are going from our helpless bill payers to ultimate owners those bill payers would not want their money going to.

      Dudgeon wind farm’s dividend last year of about £110 million was split three ways, between a Chinese state-owned company, a state-owned Abu Dhabi company, and Equinor, formerly Statoil, the Norwegian state-owned energy company.

      • September 27, 2021 2:50 pm

        Addendum: I wish somebody would quiz the ludicrous Ed Davey over the value for money he managed to obtain for the taxpayers with that particular CfD contract.

  12. Phoenix44 permalink
    September 27, 2021 12:30 pm

    I am amazed that the auditors signed of the accounts as a going concern. The claims made by the directors as to financing the losses are (as has been shown) simply not credible. The statements in the accounts regarding risks, the law suit and strategy, as well as funding are amateurish. If I was a bondholders I would be suing the auditors. But quite how anybody thought they could receive 9-13% interest is beyond me. If it’s too good to be true…

    Or to put it another way, if they have your offer 9% to get you to invest, don’t.

    • bluecat57 permalink
      September 27, 2021 2:01 pm

      Auditirs are corruptible.

  13. September 27, 2021 12:42 pm

    A great deal of State and Private and Pension Funds have bought into “ethical investing” which includes wind Farms and Solar. It would be interesting to see the hidden risks to our pension viability. Next thing we will see is demands on governments to make good any losses. It seems the Management of the Renewable companies were over rewarded for their criminal incompetence.

    • roger permalink
      September 27, 2021 2:02 pm

      On the very day that Labour at it’s conference promises to invest £28 billion every year for ten years in renewables and other green industries the savvy investor realises that peak stupidity in the sector has been reached and firmly but quietly should start to divest.

      • ThinkingScientist permalink
        September 27, 2021 3:06 pm

        Every time I think the stupidity and climate hysteria cannot go any higher, it does.

        No longer 11 but 12….13….now 14!

        Which political party will be the first to realise this whole charade is unsustainable and call their bluff, revert to normal service?

        So currently we have government policy forcing up everyone’s bills with renewables levies and costs, whilst simultaneously trying to cap the same bills by legal restrictions on pricing.

  14. Stonyground permalink
    September 27, 2021 1:42 pm

    No sympathy. Anyone who invests in a subsidy farm is taking stolen money. Serves them right.

    • September 27, 2021 2:29 pm

      It is not widely understood, alas, that renewables subsidies are a compulsory tax that falls most heavily on the poor. Investing in schemes such as this indicates that the investor is putting their wealth above the wellbeing of their fellow Brits. I argued with a Labour councillor about this: that owners of solar panels were having their (at the time mad) returns financed by poor bill payers.

  15. bluecat57 permalink
    September 27, 2021 1:58 pm

    Investors lost it. The headline, aka lede, is who GAINED it. Who got rich off the scam?

    • September 28, 2021 11:30 am

      The directors are the most likely culprits

  16. roger permalink
    September 27, 2021 2:03 pm

    On the very day that Labour at it’s conference promises to invest £28 billion every year for ten years in renewables and other green industries the savvy investor realises that peak stupidity in the sector has been reached and firmly but quietly should start to divest.

  17. Tim Worstall permalink
    September 27, 2021 2:21 pm

    “deceived the public into thinking that wind power is cheap”

    Well, sorta. Wind power is definitely cheaper than the cost of producing it…..

    • Ron Arnett permalink
      September 27, 2021 5:59 pm

      True, very true but then that nasty Total Cost of Operation that kills so many attractive schemes kicks in. You know, labour, capital, distribution costs ….. all that reality stuff.

      But the investor got what he said he wanted. He got to virtue signal to the tune of one hundred and fifty thousand pounds. Now that is some real virtue signaling.

  18. Chaswarnertoo permalink
    September 27, 2021 3:10 pm

    🤣😂🤣😂🤣. Greentards.

  19. Mack permalink
    September 27, 2021 3:49 pm

    Read this from Pierre Gosselin for an insight from a guy formerly in the bank business. https://notrickszone.com/2021/09/26/new-documentary-reveals-how-corrupt-and-destructive-green-energies-are-this-is-a-broken-system/

  20. William Birch permalink
    September 28, 2021 12:34 pm

    Mack i’ve just watched the video. it exposure of the big corporations using climate change to hid the fact that they are creating a “money pit” based on tax evasion to provide electricity that Sweden does not need. all this to provide it to Google new development in Finland.How scary is it that in Sweden of all places, the police should grab the guy on the street and brutally bundle him into a van. All the police wearing gas masks to hid their identity. God help us all now that the Global “money industrial complex” has hijacked Climate change agenda.

  21. Emma Richey permalink
    September 28, 2021 5:02 pm

    Ha ha – shouldn’t have invested in something which is so unethical on all fronts

  22. georgele permalink
    September 28, 2021 6:56 pm

    The real scammers are the politicians and so-called scientists who push this fraudulent claim of “fossil fuel CO2 caused climate change”.

  23. September 28, 2021 8:15 pm

    I bet there are quite a lot of green investments that already went financially wrong
    but that investment managers swept under them the carpet and moved on
    rather than admit they screwed up

    • Emma Richey permalink
      September 30, 2021 10:13 am

      Interesting blog, thanks

  24. September 28, 2021 9:06 pm

    Reblogged this on Gds44's Blog.

  25. September 29, 2021 7:43 pm

    Reblogged this on boudica.us and commented:
    H/T gds44

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