Ecofin Water&powr Opportunities Share Discussion Threads

[linhur] 19/7/2008 13:25

Hi Praipus

I am considering converting my capital shares to ords.My reasoning is that I cannot see any great upside on utilities before the final conversion in March 2009 and the downside may be on regulatory fears as prices are increased over the next twelve months.I shall remain invested in the Ords as I like the managers style and it gives me overseas representation particularly in the US where a fall in sterling may offset any downside.

On reading the offer document it appears that the conversion factor is 4 to 1.I am now assuming that the VAT credit is now included in the weekly NAV figures.It would appear that this conversion factor is unlikely to move much in the next ten days.

I expect to make the AGM on the 1st

kind regards
Linhur

[clusium] 19/7/2008 07:32

Thank you Praipus for your thoughtful piece and, as ever, the Friday information. Will come back to the several leads later.

[praipus] 18/7/2008 14:10

Ecofin Water & Power Net Asset Value(s)

RNS Number : 3449Z
Ecofin Water & Power Opps PLC
18 July 2008


ECOFIN WATER & POWER OPPORTUNITIES PLC
It is announced that at the close of business on 16 July 2008, the un-audited Net Asset
Values per share of the above investment trust
company were:-
Income Shares: Net Asset Value: 99.80p per share (including undistributed revenue)
Capital Shares: Net Asset Value: 767.47p per share
Ordinary Shares: Net Asset Value: 195.07p per share (including undistributed revenue)
Gross Assets: £741,631,000
Loan Facility: £207,675,000
Net Assets: £533,956,000
Phoenix Administration Services Limited - Company Secretary

This information is provided by RNS
The company news service from the London Stock Exchange

END

[praipus] 17/7/2008 10:28

Hi Clusium, good question/s in the current market.

As you know I sold ECW and bought more ECWC.

Also in Ecofin's title is the word "opportunities". So perhaps the portfolio constituents currently indicate there being fewer dramatic opportunities in the water sector.

This fund I think is aligned and will benefit from long term global economic trends.

If you compare a FTSE 100 graph with ECWO then ECWO is doing rather well.

Highly recommend reading through the "Proposed Conversion of Capital shares" document in the header. It is much better at answering your thoughts than I am.

One issue is that the income shares are said to be a drag on the NAV for ECWO and ECWC. So after March, 2009 the discount and distortions of the Income and Capital shares will be out of the way. I would imagine that ECWO's dividend could increase and the discount narrow a lot.

I think there may be bargains around now but also lots of bull traps and short covering before further legs down. I do wonder if we need to see some more banking failures before things really recover and possibly even one that the government can not rescue for some reason.

Do post interesting value opportunities for discussion.

Good luck whatever you choose to do.

Praipus.

[clusium] 17/7/2008 06:06

The prominence of the soubriquet "Water" seems iappropriate in the present structure, with only 3.7% of portfolio in that sector and Pennon dropping out of the top ten holdings. This company has changed faces since I first invested here and I'm not sure I like it, probably because I know nothng about the power companies it invests in, mainly in USA. The Ordinary shares are hardly ever traded and the dividend return is looking increasingly slim against other opportunities. Any thoughts (Praipus)?

[praipus] 15/7/2008 11:20

From the OIL BB

briarberry - 14 Jul'08 - 12:37 - 217 of 219


T. Boone Pickens is out to save America.



America is in a hole and it's getting deeper every day. We import 70% of our oil at a cost of $700 billion a year - four times the annual cost of the Iraq war.

I've been an oil man all my life, but this is one emergency we can't drill our way out of. But if we create a new renewable energy network, we can break our addiction to foreign oil.

On January 20, 2009, a new President gets sworn in. If we're organized, we can convince Congress to make major changes towards cleaner, cheaper and domestic energy resources.

[praipus] 15/7/2008 09:38

Bangor:

If it isn't broke don't fix it.

Re: TCI and J-Power



J-Power I imagine will at some point need to make itself beautiful for foreign investors. It will need to invest heavily to update and add to its Nuclear and alternative power sources. Apparently they have to import all their oil so at current prices that cant be a happy long term scenario.

[bangor] 15/7/2008 08:55

Hi Praipus

Mainly I have gold stocks, platinum stocks, oil stocks and ETFs in silver, gold and softs. So ECWC fits into the broad commodities theme.

This forms a totally undiversified portfolio. Any "expert" wil call this madness, but being alergic to property, financials and retailers has kept me so far from losing money.

I'm with the gold bugs who see fiat currencies eroding and precious metals forming best value.

[praipus] 14/7/2008 12:20

TCI re:J-Power holding

[praipus] 14/7/2008 10:58

Bangor: Preponderance of precious metals? Mining stocks or physical commodity proxies? (ETF's etc). Ths discount to NAV will go after March 09 and the Income Shares are out of the way I suspect performance will be quite startling thereafter.

Asmagilocco: Forms of election or USE instructions in CREST by 3.00 p.m. Thursday 31st of July..... BUT ....Hoodless Brennan probably have to condense shareholders elections and comply with the same date so I guess 28/7 is reasonable. Best to confirm with your broker IMHO.

[asmagliocco] 13/7/2008 11:10

AFAICS, nobody has shown any appetite for converting soon to ordinary shares (is it by 28/7? Hoodless Brennan seem to think so), which kinda confirms my own view that there's no point in doing so with such a current discount to NAV.

Surely next year's offer from the company at 97.5% of NAV is likely to be the better option, or have I understood nothing (always a possibility, I'm afraid).

[bangor] 12/7/2008 11:46

Thanks to the above regulars for keeping us up to date on ECWC. I will be tempted to cash in next March as it would give me a cash cushion which I currently don't have as I'm fully invested and recent ECWC performance has disappointed.

ECWC is down roughly in line with the general markets (FTSE100) this year at about 20%. This is not the counter I am looking for - tracking a bear market is not helpful. For myself my portfolio performance is flat, due mainly to my preponderance of precious metals.

[jackiewilson] 12/7/2008 10:52

Monthly Review out:



Figures illustrate the joys of geared Capital shares over the 'long-term'.

I guess the conversion decison is dependant on whether 9 months is long-term enough for them to have another kick in performance before wind up date. I'm thinking 'yes' ....

[jackiewilson] 12/7/2008 10:52

There's some relative performance data and graphs vs market vs gearing etc on the website:



that might help with decision making.

[praipus] 08/7/2008 11:41

On a very small scale hedging with S&P500 Covered Warrant PUT's and oil ETF's CRUD.L (SOIL.L for shorting) should have done this earlier. But due to the ECWC gearing and my more recent purchases the paper losses are winning.

[jzd] 08/7/2008 11:28

My inclinations are to continue to hold until April and then convert to Ordinary shares. However I events may dictate some other decision by 2009.

[praipus] 08/7/2008 10:44

So the question is to convert or not to convert?

Thoughts:

Makets remain volatile and directionless. Commodities remain high demand and $ driven. Political risk if energy and water become too high yet if quality and infrastructure do not keep up with the times even more political issues.

3% return on NAV last year 8% so far this year though share price might be saying something else a bit lower. However prior to that 20% per annum return which is difficult to find even in a good market.

[praipus] 07/7/2008 10:30

GlynneF and others.

I must apologise for referring to this "Conversion offer" as a "cash tender offer" in the header to this thread (now amended).

The illusion I was under in answering your pervious post GlynneF. No cash required for conversion so no issue.

The next cash tender offer is April 2009.

[glynnef] 07/7/2008 10:12

I see the July/Aug conversion offer document has now been published :



Of course there is time for the NAVS of the caps and the ordinaries to vary quite a bit between now and the end of July, but it looks like around 4 ordinaries for each cap currently. Or wait until end of March 09 for another offer of cash at 97.5% of attributable NAV or 100% conversion.

Interesting extract :

Background to the Conversion

At the time of the 2005 Reorganisation, it was stated that the Company intended:

in July 2008, to offer those Capital Shareholders who did not convert their Capital Shares pursuant to the 2005 Reorganisation or tender their Capital Shares pursuant to the tender offer in 2007 the opportunity to convert some or all of their remaining Capital Shares into Ordinary Shares at a conversion price which reflects the Adjusted Attributable NAV of a Capital Share and the Attributable NAV of an Ordinary Share at that time; and

ii. in April 2009, to extend a cash tender offer to Capital Shareholders at a price per share equal to 97.5 per cent. of the Attributable NAV of a Capital Share as at 31 March 2009 and give Capital Shareholders the opportunity to convert their remaining Capital Shares into Ordinary Shares on a basis which would reflect the Attributable NAV of a Capital Share and the Attributable NAV of an Ordinary Share as at 31 March 2009. Any Capital Shares not acquired by the Company pursuant to such tender offer or converted voluntarily would be compulsorily converted on the relevant Attributable NAV basis set out above.


The Conversion

Under the Conversion, holders of Capital Shares are being given the opportunity to convert some or all of their Capital Shares into Ordinary Shares at the Conversion Ratio, which will reflect the Adjusted Attributable NAV of a Capital Share and the Attributable NAV of an Ordinary Share as at the close of business on 30 July 2008 (or such other date as the Directors in their discretion determine).



The Adjusted Attributable NAV of a Capital Share as at 25 June 2008 (the latest practicable date before the publication of this announcement) was 817.66p, while the Attributable NAV of an Ordinary Share as at that date was 206.87p. By way of illustration only, if the Calculation Date had been 25 June 2008, the Conversion Ratio would have been 3.952:1 and a holder of 1,000 Capital Shares who elected to convert such shares would have received 3,952 Ordinary Shares. However, following the decision of the European Court of Justice in the Claverhouse case and subsequent negotiations with HM Revenue & Customs, since 25 June 2008 it has become apparent that a one-off payment of £8,675,980 will be made by the Investment Manager in respect of VAT incorrectly charged to the Company. This payment will be reflected in future weekly Net Asset Values published by the Company, even though it will not be received until HMRC has refunded the overpaid VAT. If this payment had been reflected in the 25 June 2008 Net Asset Value figures, the Adjusted Attributable NAV of a Capital Share would have been 839.62p and the Attributable NAV of an Ordinary Share would have been 209.34p, producing a conversion ratio of 4.011:1.

[praipus] 03/7/2008 18:01

There must be quite a few options ranging from liquidating some of the top ten, new loan facility or perhaps a further capital raising.

I notice UEM obtained another £85m quite easily not very long ago. If investors are prepared to give £12bn in new cash to the likes of NatWest for a chance to own part of its awful balance sheet Ecofin would be able to attract more capital with ease I imagine.

[glynnef] 03/7/2008 16:20

As the end of life of ECW and ECWC is now less than 9 months away, and there is a conversion option for ECWC due this month, these events have to start having an impact on share prices.

ECWC trades today at about 20% discount to reported NAV, but ECWO trades at only 15% discount. So a conversion offer this month should narrow the difference between these discounts. As far as I can see, the attributable NAV for ECWC on conversion is virtually the same now as the frequently reported NAV.

More interestingly, in April 09 the company is to offer to buy back ECWC shares at 97.5% of attributable NAV - a much higher price than the current share price. At current valuations, if all the ECWC holders want a cash repayment in April 09, the company would have to find about £178M to repay them as well as the ECW holders. Where would they get it ?

But all in all, ECWC looks cheap to me.

I hold ECWC and ECW.

regards,
G.

[praipus] 03/7/2008 14:34

RNS Number : 2630Y Ecofin Water & Power Opps PLC 03 July 2008

ECOFIN WATER & POWER OPPORTUNITIES PLC

It is announced that at the close of business on 30 June 2008, the un-audited Net Asset Values per share of the above investment trust company were:-

Income Shares: Net Asset Value: 97.55p per share (including undistributed revenue)


Capital Shares: Net Asset Value: 821.49p per share


Ordinary Shares: Net Asset Value: 205.26p per share (including undistributed revenue)

Gross Assets: £756,852,000

Loan Facility: £194,773,000

Net Assets: £562,079,000

Phoenix Administration Services Limited - Company Secretary

This information is provided by RNS The company news service from the London Stock Exchange


END

[praipus] 27/6/2008 14:40

Ecofin Water & Power Net Asset Value(s)




RNS Number : 7449X
Ecofin Water & Power Opps PLC
27 June 2008


ECOFIN WATER & POWER OPPORTUNITIES PLC
It is announced that at the close of business on 25 June 2008, the un-audited Net Asset
Values per share of the above investment trust
company were:-
Income Shares: Net Asset Value: 97.47p per share (including undistributed revenue)
Capital Shares: Net Asset Value: 831.87p per share
Ordinary Shares: Net Asset Value: 206.87p per share (including undistributed revenue)
Gross Assets: £758,921,000
Loan Facility: £191,957,000
Net Assets: £566,964,000
Phoenix Administration Services Limited - Company Secretary

This information is provided by RNS
The company news service from the London Stock Exchange

END