Econergy Share Discussion Threads

[praipus] 14/4/2008 11:25

Tchenguiz considers taking Econergy private
By Fiona Harvey, Environment Correspondent

Published: April 11 2008 04:18 | Last updated: April 11 2008 04:18

Shares in Econergy International, the carbon trading company, surged 23 per cent on Thursday on indications from Vincent Tchenguiz, its leading shareholder, that he was considering taking the company private.

But Econergy, which invests in power plants – mostly in developing countries – to gain carbon credits, said it had also received other indications of interest.

Mr Tchenguiz, whose family trust owns 18.3 per cent of Econergy, said: "The trust has held a significant investment in Econergy since it was listed on Aim in 2006.

"The trust has a high regard for the board, management and employees of Econergy; is supportive of the company's strategy and believes in its long-term potential. However, we believe that this potential can best be realised in the private sector."

Consensus Business Group, Mr Tchenguiz's vehicle, could form a new company to take over Econergy or cherrypick certain assets of the carbon trading company. Econergy also did not rule out a sale of its shares "at a premium".

The company said discussions were at an "early stage".

Shares in Econergy have fared badly in the past year because of problems financing its carbon credit projects. Other carbon traders, such as EcoSecurities, have also suffered share price falls because of difficulties in gaining credits, and AgCert was forced to de-list from Aim after failing to generate enough credits to meet its contracts.

Dresdner Kleinwort rated the company "buy" on Thursday and estimated the bid floor for Econergy at 60p to 65p a share, saying: "We believe there is a strong rationale for a deal to be done." It said European power utilities were possible bidders. The shares closed up 5½p at 29p.

Other possible bidders are thought to be investment banks or private equity groups, which have been showing increasing interest in carbon trading.
Copyright The Financial Times Limited 2008

[praipus] 14/4/2008 11:22

Surprised this didnt open higher after the FT mention.

[david77] 14/4/2008 11:12

"Would hope for a higher bid though."

So do I. Econergy are on a bigger discount to value that Trading Emissions - which is why it would be a good deal for them.

[gdp2] 14/4/2008 10:22

I would also favour a merger, most probably with Trading Emissions which I believe suits ECG Perfectly. Their cash pile would allow Econergy not to sell any stakes in its projects and maintain complete control as well as allowing new projects to begin development.
The credit crunch has effectively, as you say dewi141, scuppered ECG's hopes to survive on its own.
Would hope for a higher bid though.

David77 thanks for the CFD info,

[dewi141] 14/4/2008 08:50

hi

From the RNS realeased today, it woudl seem that he credit crunch has scuppered ECG's future as an independent entity (RNS says that ECG are looking for a sale or merger of the company).

Given my faith in ECG, I am hoping for a merger, as this would allow me to maintain some stake in its future prosperity, and hopefully, any change of ownership will happen at a much higher price than now.

In retrospect, the falling share price was showing the way the wind was blowing, and i shoudl have sold out much higher up - cest la vie!

cheers

[david77] 14/4/2008 08:45

CfDs:
Sunday Telegraph - Jack Petchey, the 82-yr-old entrepreneur, has amassed a secret stake in Pendragon, the UK's largest car dealership.

By building his 13pc holding thru CfDs, Petchey has not been required to declare his stake-building.

Stock Exchange rules require investors to delare holdings in excess of 3%, but because holders of CfDs do not, theoretically, own the shares they do not have to disclose their interest unless the company is in a takeover situation.

[david77] 12/4/2008 20:08

I understand wind turbines - I don't understand carbon credits enough to commit real cash. I would sell my TRE shares.

[gdp2] 12/4/2008 18:21

'Gus Hochschild, director of research at Dawnday Day Corporate Broking, estimated the company's power projects to be worth £116 million if they come to fruition and said the current share price was "absurdly low".
FT Today.
Lets hope the board are being advised in the same way and hold out for a 90p plus offer. Ideally, IMO, they would sell say a 15% stake in the company from a new issue to one of the parties looking at the company to provide working capital through 2010 when the shares should be worth much more.

I am not completely opposed to a merger with Trading Emissions as I believe the businesses would combine well, Trading Emissions cash pile I believe acting as boost to the number of projects ECG can take on, but on much better terms than their first derisory offer.

[praipus] 11/4/2008 17:26

Thanks GDP2.

TRE are ok their trap is set so that as soon as Carbon trading becomes mandatory rather than voluntary they will kick off big style IMHO. Long term though....which I know at the moment seems an overused term carrying little weight.

US elections look positive from a carbon stand point but will take three years to implement relevant systems which apparently CLE have been advising them on.

The saving grace is TRE's cash. And for ECG their ability to earn out of their projects carbon certs end electricity.

[david77] 11/4/2008 12:29

I agree GDP2. I don't fancy the Trading Emissions (TRE) merger.

[gdp2] 11/4/2008 12:27

Trading Emission have , it appears, a £200 million odd cash pile

[gdp2] 11/4/2008 12:21

Praipus. Read back a few pages and I have underlined how undervalued Econergy is. I have calculated Nav in 2011 to be around 385p a share including a rights issue of 40million shares which i supposed would be required to fund new projects. They still have a sizeable cash pile from the IPO. Corani is worth at least $45 million, along with new projects, in particular Bereberie and Areia Branca, the NAV of ECG is certainly a lot higher than the current share price

TEP is currently a lender to Econergy through I think a $4 million loan to be repaid in Carbon Credits, Something which Econergy is continually having to revise the cost upwards on. Hopefully this won't have any impact on their success.

Econergy is such a fantastic long term bet that to be taken out at anything below 90p now would just be robbing the shareholders. There's such potential here to be £3+ in 3 years

[smcl] 11/4/2008 12:19

GDP2,

Thanks for reply and info - unfortunately I do hold AGC.

All the best with ECG

[gdp2] 11/4/2008 12:15

Smcl I dont hold Agcert as they are only really a trader of carbon credits where as Econergy actually produces its own energy but has been misclassified as a carbon broker, leading, in part, to a slump in the share price as Agcert has collapsed.

[smcl] 11/4/2008 12:04

Anybody here hold Agcert and views on what is happening there?

Many Thanks

[praipus] 11/4/2008 10:33

Anybody else think NAV is about 58p?

[praipus] 11/4/2008 10:22

Tabled offer/proposal from TRE, multiple interested parties, trading at what appears to be a big discount to cash, book and future value or have I missed something?

[gdp2] 10/4/2008 13:39

'An offer to the Econergy board in relation to specific assets'
Mentioned in the early statement. Wouldnt particularly like to see ECG sell any assets except if they fetch say 50% on what they paid for Corani which was heavily undervalued at purchase.

[gdp2] 10/4/2008 13:29

Could these CFD's have been acting as a short on Econergy?

[gdp2] 10/4/2008 13:09

it looks as though they don't. Their holding has never been listed on the website or in a report By Dresdner Kleinwort. The board needs to push hard on this one, I'd ideally like to see Econergy remain public as I doubt a bid today/tomorrow/next week will give fair representation of how much this will be worth in 4 years

[david77] 10/4/2008 13:03

"The Trust ultimately holds an economic interest in 15,935,700 Econergy shares,
representing approximately 18.3% of Econergy's share capital, in the form of
contracts for difference through its subsidiary Elsina Limited."

Do CfDs have to be declared?

[gdp2] 10/4/2008 12:55

How has this group just come to own 18%? There holding is not displayed anywhere, unless they picked it up this morning?

[gdp2] 10/4/2008 12:53

'The Trust [Tchenguiz Family Trust] has a high regard for the board, management and employees of Econergy, is supportive of the company's strategy and believes in its long-term potential. However, we believe that this potential can best be realised in the private sector,'

[gdp2] 10/4/2008 12:49

I was worried this would happen! Lets hope it runs support for the share price through to May 12th when ECG should be able to justify a much higher price. Taking this company out for anything less than 90million is an absolute bargain