Recently several new projects or tiers with larger amounts were published in Envestio lending platform.
I came across information about one of these projects which rose my attention. Therefore I wrote a letter to Envestio to have couple of questions out of the way.
I am writing in relation to available investment opportunity: https://envestio.com/en/projects/power-plant-factoringdevelopment-phase-1/
In July 2018 there has been started an investigation in relation to misusing funds of MPC (obligātā iepirkumu komponente – in Latvian).
1) Are you aware of this fact?
2) How do you evaluate the risk for getting back the investment in case they lose the licence for above mentioned subsidies?
Considering the great track record so far, I am a bit concerned maybe due to high workload this has slipped by.
Please be kindly noted that your response could be published in my personal investment blog.
To which I got the following reply:
Thank you for raising this question. Actually, we received a few similar questions from investors, to which we’ve already answered. Sure, you may spread our comments in your blog, to clarify the situation for your readers.
1) There is a misunderstanding, as no investigation is conducted in relation to the company. The former Ministry of Economy, who according to the article has turned a request to the police to check a company was not re-elected. There was no official investigation, only some unsupported statements, published by Latvian media. All claims towards the company were discontinued.
2) We have commercial assets of the company under pledge and personal guarantees of the beneficial owner for the amount of the loan.
“Tukums DH” SIA business ethics
Envestio came back with the response quickly and it all seems to be alright from investor’s perspective.
I would like to cast some criticism on how “Tukums DH” is doing their business.
- As per the media, it is selling the energy with 5x higher price to local council compared to the neighboring enterprise called “Rietumu Energija” SIA (in which, by the way, you could also invest through Envestio).
- In the video published one can see how the energy is used to dry wood chips while the outside temperature is +30°C.
I am not an expert in wood chip drying, but after quick googling looks like there are more effective ways for drying wood chips. Efficiency was the main reason for allegations.
The second part of the answer from investor’s point of view says it all. Investor’s money is safe due to collateral they arranged. Life span of the project is 11 months.
Even if there are business ethics doubts for me, loan term is rather short and collateral coverage makes my investment secure.
I also must emphasize that so far they have flawless track record and therefore wanted to rise their attention so it continues and benefits for all of us here.