Powerhouse weighing up returns from three investments

Powerhouse Ventures is weighing up an offer for a stake in one of its investments and says two other firms it backs may return cash to the ASX-listed Kiwi incubator in the near term.

The Christchurch-based company has been grappling with the deteriorating outlook for one of its investments - HydroWorks – in recent weeks, ultimately securing a court order to appoint an interim liquidator to the hydroelectric turbine maker and writing down the value of its stake. That triggered the ASX to question whether Powerhouse has enough cash to keep funding its operations, something the Christchurch company "fully expects" to be able to do.

Although Powerhouse doesn't have any plans to raise money, executive director Paul Viney told the Australian securities exchange it is "reviewing an unsolicited offer made for a proportion of shares in one investee company" which if it goes ahead will see "a substantial immediate cash inflow."

The incubator also noted two other companies it is invested in "are actively working upon potential sale of business transactions that may result in a liquidity event with the potential to return cash to PVL in the short to medium term."

Powerhouse didn't name the three companies but its investee company CropLogic will list on the ASX this month, having raised $A8 million in a fully subscribed initial public offering, while the National Business Review this week reported the incubator had received an offer from the Australian branch of PhillipCapital for its HydroWorks stake.

"It remains possible that PVL may retrieve some value from a restructuring, partial or full sale, of HydroWorks," Powerhouse told the ASX.

The company's shares last traded at 33.5Ac, having slumped 58% so far this year. The stock was sold in an initial public offering last year at $A1.07 a share.

(BusinessDesk)