REWS (Renewable Energy Waste Solutions UK plc) is offering 2 year and 4 year bonds paying interest as follows:
- 2 year bonds: 8% if income is paid out twice a year, 9% if income is rolled up and paid out at the end, 10% paid out twice a year for investments over £100,000
- 4 year bonds: 10% if income is paid out twice a year, 11% if income is rolled up and paid out at the end, 12% paid out twice a year for investments over £100,000
Who are REWS?
Renewable Energy Waste Solutions UK plc was incorporated in February 2017 and is yet to file accounts. Companies House shows that Matthew Donegan owns 100% of the company as at September 2017.
Despite owning and controlling 100% of the company, Donegan describes himself extremely modestly as merely “Head Engineer” in the literature, responsible for “[overseeing] the project build process”, and is listed third of the directors.
The other directors are described as Dennis Ng, managing director of Hong-Kong based Epic Asset Management Ltd and Ingenious Investments (not to be confused with the similarly-named UK-regulated firm), Bill McClintock, ex Property Ombudsman chairman, and Ben Harris.
How safe is the investment?
These investments are unregulated corporate loans and if REWS defaults you risk losing up to 100% of your money.
The purpose of the bonds is to allow REWS to invest in waste-to-energy facilities.
If REWS fails to make sufficient returns from its waste-to-energy facilities, or for any other reason REWS runs out of money to service these bonds, there is a risk that they may default on payments of interest and capital to investors.
The literature refers to “UK Government backing”. This simply means that the UK Government is a potential customer. It does not mean the UK Government backs REWS as an investment in the same way as, for example, National Savings & Investments.
Asset-backed security
Investors have a first legal charge over the company’s assets.
Investors should not assume that because their loans are secured on these assets, they are guaranteed to get at least some of their money back through sale of the collateral if the issuer defaults. Investors in asset-backed loans have been known to lose 100% of their money (e.g. Providence Bonds and Secured Energy Bonds) when it turned out that the collateral was insufficient to pay investors after paying the insolvency administrator (who always stands first in the queue).
We are not in any sense implying that the same will happen to investors in REWS, only illustrating the risk that is inherent in unregulated corporate loan notes even when they are asset-backed.
If investors plan to rely on this security, it is essential that they undertake professional due diligence to ensure that in the event of a default, these securities are valuable and liquid enough to raise sufficient money to compensate all investors, as well as any other creditors that REWS has borrowed money from.
The literature does not reveal what assets REWS has and the company is yet to file accounts, so any investors who find this security attractive will need to ensure they have independent due diligence regarding how much the assets are likely to be worth.
Should I invest with REWS?
This blog does not give financial advice. The following are statements of publicly available facts or widely accepted investment principles, not a personalised recommendation. Investors should consult a regulated independent financial adviser if they are in any doubt.
As with any unregulated corporate bond, this investment is only suitable for sophisticated and/or high net worth investors who have a substantial existing portfolio and are prepared to risk 100% loss of their money.
Any investment offering up to 12% per annum yields should be considered very high risk. As an individual security with a risk of total and permanent loss, REWS’ bonds are higher risk than a mainstream diversified stockmarket fund.
This particular bond is described as asset-backed. Before relying on the security backing the bond, investors should undertake professional due diligence to ensure that in the event of default, the security could be easily sold and would raise enough money to compensate all the investors, after the adminstrator deducts their fees and any higher-ranking borrowers are paid.
Before investing investors should ask themselves:
- How would I feel if the investment defaulted, the sale of the security failed to raise enough money to compensate all investors, and I lost 100% of my money?
- Do I have a sufficiently large portfolio that the loss of 100% of my investment would not damage me financially?
- Have I conducted due diligence to ensure the asset-backed security can be relied on?
Whilst I liked the articles when the site began, they have become a bit of a boiler plate – same old words, different names. You could just pin the boiler plate to the front and then just list a load of companies offering unregulated bonds …
If you’re expecting original and entertaining prose every week then a blog for reviewing unregulated fixed interest securities is the wrong place for you ?
ok. that’s harsh.
Dear fellow savers.
I feel it necessary to share my experience due to the concerns mentioned in this thread. I have invested a significant amount of money into the REWS bond. I have been to the site in Tipton and was very impressed. I have seen all of the due diligence and had this checked over with independant people. My interest payments have all been made on time. I understand that there will be skeptical people who would rather throw their opinions around rather than finding out the facts however there is no evidence to suggest that this is not a stand up investment. I used to own several commercial properties and with the rental I would make approx 9% per annum. There are plenty of ways of making these sorts of returns.
My advice would be to look into REWS thoroughly and make your own mind up and not be put off my keyboard warriors with no factual insight into the investment.
Are you on the right blog? You are the first person to comment on the subject of the article (my bantering with PSS about my prose style doesn’t count). There are no keyboard warriors here and nobody has claimed that this is not a stand up investment.
If you were one of the company’s earliest investors then so far for every £1,000 you gave them they would have given you £150 back (10% x 1.5 years). It would be pretty surprising if they hadn’t made any interest payments on time.
Odd article that seems to be more scaremongering than advisory, the same things said here could be said about any off-market bond. I have invested (albeit the minimum) with REWS and having been to site and met both Directors am impressed with both the operational side and the asset holdings.
Everyone needs to carry out their due diligence and be comfortable with their investment.
The same things can indeed be said about any off-market bond, so I am perplexed as to what you find scary about the facts stated in this review.
Advice requires an analysis of the advisee’s individual circumstances and is beyond the scope of this blog.
New article: REWS (Renewable Energy and Waste Solutions UK plc) files December 2017 accounts; further investment needed
Very concerned about Rews they have not produced account and are very late starting full investigation with fraud dept.
I am extremely concerned about this company. As an investor I have not received any return but excuses given intermittently about how any payment is deferred due to the pandemic, delays in various permissions from government bodies to progress with commissioning and so forth. I have emailed for any information but get no reply. Extremely concerned.
Very concerned about REWS. Having invested with them, albeit at the minimum, have sent letters, and e-mails. I have tried to phone them on numerous occasions with No results. Letters sent to the New Street address in Chelmsford have been returned mark is not known at this address. Has anyone been in contact with REWS recently and has had an answer I would really like to know. Worried?
Hello Phoenix / others,
I unfortunately invested in REWS in 2019 but am currently in the process of a claim against them. As evidence, it would be extremely helpful to have the documents pertaining to the bonds themselves (this information was sent to me via links that no longer work).
As this post has the details of the bonds, I assume that at some point, the relevant documents were in your possession.
If you are willing to provide these, then you will be an enormous help. If otherwise, then thank you for the post itself anyway, I’m sure it has been invaluable to those thinking of investing, I wish that I found this before I made that decision.