* Estimates NAV per share at year-end will be at least 116P
* May have insufficient reserves available for future
* To seek approval to re-register in the Isle of Man
* Shares fall 4.1 percent
By Adveith Nair
LONDON, Oct 10 British clean-energy projects
developer Trading Emissions said on Monday it will
scrap its dividend given the continued drop in carbon prices,
which had also forced it to abandon sale talks earlier this
Trading Emissions trades carbon offsets in a market in which
rich countries pay developing nations to cut emissions on their
behalf under the U.N.-backed Kyoto Protocol.
Its strategy was to exploit higher prices in the main demand
market for offsets in the European Union's emissions trading
scheme (EU ETS) compared with developing country projects.
However, EU carbon prices have gradually neared levels seen
in the 2009 recession and are down 30 percent from the beginning
of the year. Certified Emission Reductions (CER) are currently
trading at about 7.8 euros .
"The carbon market requires that counterparties provide cash
collateral against forward contracts up until delivery," the
company said. "Accordingly, cash proceeds must be retained to
ensure the company can meet working capital requirements."
The fall in prevailing carbon prices and, in turn, the value
of its portfolio of carbon-related securities, could leave it
with insufficient reserves to pay future dividends, Trading
Emissions said on Monday.
The company declared a final dividend of 3.85 pence last
year, for a total dividend of 5.5 pence per share.
Monday's news comes barely three months after the company
halted talks to sell its carbon portfolio.
"The continuing weakness in the carbon price, dividend
suspension and the absence of realisation progress means we cut
our target price to 55 pence," Peel Hunt analyst Andrew
Shares in the company were down 4.1 percent at 52.5 pence on
Monday. The stock has fallen more than 35 percent in the past
The company also said it would seek approval from
shareholders at its Annual General Meeting in December to
re-register under the Isle of Man Companies Act 2006.