Interim Update of Cindrigo Analysis

Cindrigo Energy Limited (“the Company” or “Cindrigo”) is a renewable energy company, built on long historic Swedish renewable energy expertise and experience in Waste to Energy (“WTE”) and Biomass Energy projects. Originated out of a long tradition of providing clients with high quality and good life-time value energy facilities while being in the forefront regarding performance, availability, and emission levels.

The Interim Company Update

This Update is made as an interim complement to the report published 2019-11-20. Analyst Group intend to publish a full updated equity research report in conjunction with when Cindrigo conducts their planed IPO. Some significant development impacting the Company is reflected on a high level in this interim update, as a complement to the previously published report. The assumed impact shall be viewed as an indicative high level “Top Down” adjustment reflecting primarily the impact on the Company from the

  • Corona / Covid 19 Situation, and
  • The Reverse Take Over (RTO) offer to the Company from Challenger Acquisitions LTD

This report shall be read as a complement in conjunction with the previously published Analysis


The Corona / Covid 19-Situation and its impact

Cindrigo Energy Ltd has been impacted with significant delays due to the situation with COVID-19. The Engineering Procurement and Construction contractors China Energy team have been (and still is) faced with quarantine and travel restrictions. Ukraine has also been closed down for travel to and from the country for a long time, therefore planned meetings and site visits and joint development activities have been postponed during this period. Cindrigo’s local team in Ukraine has continued its work with the contractual, construction and operational preparation, but of course with significant delays due to the lack of access to people and travel. Impact from this “Lock Down”-situation is a delay of approximately one and a half year for the first WTE project in Kiev. It will obviously also slow down the development on the following projects, at least in the earlier part of the planning period. We assume that the Company will be able to gradually catch up some of the lost momentum over time.

New Special Investment Law

There has been some positive development in Ukraine to support larger important projects like Cindrigo’s WTE-projects, which are meeting the needs both for household waste handling, reducing landfills, producing clean energy and creating jobs. On 21 July 2020, Ukraine’s parliament, the Verkhovna Rada of Ukraine, passed at the first reading a Draft Law No. 3760 “On State Support for Investment Projects with Significant Investments” (“Draft Law“). Second reading was done in November and it is expected that the final vote and decision by the Parliament will be in December/January. The Draft Law was proposed by the President of Ukraine as part of his investment promotion agenda and is aimed at enabling state support for major investments in Ukraine.

The Draft law will provide benefits in connection with Cindrigo’s WTE-projects, which will qualify for assistance. In particular, the provisions relating to access to state-owned land at favourable rates with an option to buy after 15 years, will provide savings to the project.

Among the most notable provisions, the Draft Law sets out:

  • possible forms (instruments) of state support for investment projects, maximum for 15 years
  • legal guarantees for participating investors
  • tax benefits, such as exemption from corporate income tax or duties on import of new equipment
  • granting preferential rights and special land use fees for using state and municipality-owned land plots for the implementation of an investment project
  • providing related infrastructure facilities (roads, communication lines, heat, gas, water and electricity, utilities, etc.) necessary for the implementation of the investment project, including through the (re)construction of such facilities at the expense of the state or municipality The project implementation period should not exceed five years.
  • the undertaking by the Government of Ukraine and the municipality (i) to guarantee stable conditions for the implementation of the investment project and (ii) to provide the state support in the form and on the terms set out in the Special investment contract

Cindrigo will benefit from this new law, why we have not reduced the roll out plan as much as we would without this new supportive plan and expect that the Company will try to get as many projects as possible covered whith this support.

We estimate that the Company will simplify the installation at least on the first plants and exclude the district heating and only produce electricity (impacting some 14-15% on Cash Flow). Also some impact on the increase of cost of production with the delays faced (assumed 2% on annual costs), benefiting approximately 10% from the tax exemption, and also on land lease etc.

In our high-level adjustment, we have assumed a delay for the first project of approx. 1.5-2 years, and there after reduced the “roll out plan”, and assumed a ”blended” impact on the Business Model, as below table.


On 31 August 2020, Challenger Acquisitions LTD (LSE:CHAL) a Guernsey company listed on London Stock Exchange (LSE) made an offer for Cindrigo.

Challengers shares were admitted to the LSE standard segment of the Official List and to trading on the Main Market. As the transaction constitutes a Reverse Take Over under the Listing Rules the Company requested the FCA (Financial Conduct Authority) in UK to suspend the Company’s listing on the standard segment of the Official List. Trading on the Main Market of the London Stock Exchange has also been suspended pending the publication of a prospectus, to be approved by the FCA.

Challenger received acceptances of the Offer from Cindrigo shareholders representing 74% of the shares of Cindrigo. The companies are in process of finalizing the outstanding conditions, which are expected to be done shortly. Under the plan, Challenger will make an all-share offer on a one for one basis for the capital of Cindrigo. Challenger Acquisitions will then be renamed to Cindrigo Holdings LTD. Following the successful completion of the transaction, the new Cindrigo Holding will have a total of 151 million shares in issue, whereof Cindrigo shareholders will hold approximately 96,5%.

Following the acceptance of the offer, Challenger has appointed several Cindrigo directors to its board: Jörgen Andersson as Chairman, Lars Guldstrand as CEO, and Dag Andresen and Mustaq Patel as Directors.


Based on above key issues impacting Cindrigo we have made a high-level interim adjustment/update of the valuation, where the impact of COVID-19 is a major driving factor. As a result, we expect the Company to have a slower development in the earlier years but will be able to ramp up and within approximately 5 years almost be back on previously indicated levels.

Long Term we still see the potential for the Company to reach a 5-10 BUSD valuation given successful development in Ukraine, and new other jurisdictions, and potentially in other renewable energy sectors.

An updated equity research report is intended to be published in conjunction with and when Cindrigo is re assuming trading, expected to be in H1, 2021.