Share Name Share Symbol Market Type Share ISIN Share Description
Greenko LSE:GKO London Ordinary Share IM00B28KLZ74 ORD EUR0.005
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 1.01p 0.00p 0.00p - - - 0.00 05:00:10
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Electricity 77.8 18.6 4.7 0.2 1.61

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Date Time Title Posts
31/10/201621:19Greenko Group - Profitable Clean Energy to India's Billion1,081.00
07/12/201323:35Another KSK ?20.00

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DateSubject
25/6/2015
19:41
seball: Full text...... It would appear that the board of Greenko (GKO: 55p), the Indian developer, owner and operator of clean energy projects, have been listening to their shareholders. They have now entered into discussions with two major investors to work out a compromise deal to prevent a highly dilutive share issue on the conversion (into ordinary shares) of the minority interests in Greenko Mauritius held by the Government of Singapore (GIC) (whose investment has a value of £140m), and Global Environment Emerging Markets (investment has a value of £75m). This is clearly good news as both GIC and Global Environment Emerging Markets (GEF) have the right to convert their investments (GIC owns 17.38 per cent of Greenko Mauritius and GEF owns 14.09 per cent) into Greenko’s ordinary shares from the start of July, so this issue needs resolving as soon as possible. I discussed this important point when I last updated my view when the price was bombed out at 44p (‘Catalysts for share price moves’, 4 Jun 2015). The latest news initially sparked a 50 per cent plus rally in Greenko’s share price to a high of 68p yesterday morning, albeit it only returned the price back to the 70p price level they were trading at seven weeks ago (‘Break-out looms for mobile wonder’, 12 May 2015) before some profit taking set in yesterday afternoon. My advice is to hold firm and await news on details of the compromise deal the company is trying to work out with these two major investors as there could be more significant share price upside in the event of an amicable resolution. That's because after factoring in a December 2015 year-end net debt figure of around $920m (£590m), an increased issued share capital of 329m shares - assuming that GEF and GIC accept conversion terms around 100p a share as I discussed in my article in May - then Greenko's enterprise value of $1.5bn (based on a share price of 100p) would still be only 8.5 times fiscal 2016 operating profit estimates and 7 times likely cash profits. Of course a conversion price of 100p a share is well above Greenko’s current share price, but still represents a chunky discount on the 180p level the shares were priced at last summer, and more importantly the share price at the time when they made their investments in the first place. Moreover, there is no point at all for the two major shareholders to undermine the ability of Greenko's board to progress with its expansion plans as GIC and GEF are still only minority shareholders in Greenko Mauritius, owning less than a third of that subsidiary between them. Hold.
25/6/2015
11:08
paleje: ST has an article out today this is his concluding bit:- My advice is to hold firm and await news on details of the compromise deal the company is trying to work out with these two major investors as there could be more significant share price upside in the event of an amicable resolution. That's because after factoring in a December 2015 year-end net debt figure of around $920m (£590m), an increased issued share capital of 329m shares - assuming that GEF and GIC accept conversion terms around 100p a share as I discussed in my article in May - then Greenko's enterprise value of $1.5bn (based on a share price of 100p) would still be only 8.5 times fiscal 2016 operating profit estimates and 7 times likely cash profits. Of course a conversion price of 100p a share is well above Greenko’s current share price, but still represents a chunky discount on the 180p level the shares were priced at last summer, and more importantly the share price at the time when they made their investments in the first place. Moreover, there is no point at all for the two major shareholders to undermine the ability of Greenko's board to progress with its expansion plans as GIC and GEF are still only minority shareholders in Greenko Mauritius, owning less than a third of that subsidiary between them. Hold.
24/6/2015
14:22
seball: From IC in May. ST reckons 100p conversion. Shares in Aim-traded shares in Greenko (GKO:70p), the Indian developer, owner and operator of clean energy projects, have endured a roller coaster ride since I initiated coverage at 138p ('Buy signal flashing green', 18 March 2013). Having hit a high of 180p at the end of September 2014, Greenko's share price fell steadily thereafter and I subsequently downgraded my view to hold when the price was 104p after it became apparent that the operational progress the company has been delivering is being undermined by its capital structure ('Small cap updates', 31 March 2015). Clearly, some investors headed for the exit as Greenko's share price declined a further 20 per cent to 82.5p by the time analysts at brokerage Investec released a note in mid-April with a 150p revised target price. In that note to clients, Investec's utilities analyst Harold Hutchinson noted: "We believe the recent share sell off reflects some shareholders' concern on Greenko's financing structure. This has been magnified by the potential conversion of the Government of Singapore (GIC) (which invested £100m in Greenko Mauritius in 2013) and Global Environment Emerging Markets (invested in 2009) minorities into ordinary shares in the near future. The original GIC investment at a subsidiary level offered re-assurance to ordinary shareholders in terms of capital commitment. The need now is for Greenko's capital structure to be simplified and organised to ensure a recovery in confidence of all shareholders." Calculating the level of potential dilution The issue of dilution to existing shareholders is the one I raised in my article at the end of March. That's because GIC has the right to exchange its 17.38 per cent interest in Greenko Mauritius into a minimum of 44.8m Greenko ordinary shares anytime between 1 July 2015 and 30 June 2017. However, the number of new ordinary shares to be issued is capped to prevent GIC from owning more than 29.9 per cent of Greenko's enlarged ordinary share capital. Greenko currently has 155.8m shares in issue. So with Greenko's share price significantly lower than at the time when GIC made its original investment, then GIC could end up owning a minority interest in Greenko Mauritius as well as being issued with a slug of new equity in Greenko. Global Environment Emerging Markets (GEF) has the right to exchange its 14.09 per cent interest in Greenko Mauritius into a minimum of 29.1m Greenko ordinary shares anytime between 1 July 2015 and 30 June 2017. To put the interests of both GIC and GEF into some perspective, Investec calculate that GEF's interest in Greenko Mauritius would convert into 75m new Greenko shares based on its present value of $113m (£75m) and using a share price on conversion of 100p; and 70 per cent of the GIC interest would be satisfied by the issue of 99m new Greenko shares based on a present value of its investment of $210m (£140m). But because of the 29.9 per cent shareholder cap, GIC would also retain an interest in Greenko Mauritius worth £40m. As a result, Investec have factored in a raised share count of 329m, up from 156m currently, assuming conversion occurs on 1 January 2016 and a share price of 100p being accepted by both GIC and GEF. This is significantly higher than Greenko's current share price. It's possible that both GIC and GEF would accept conversion of their minority interests under these terms as it would enable Greenko to simplify its balance sheet and funding structure, remove the issue of dilution that is undermining sentiment, and enable investors to focus on the strong operational progress the company is actually making. Greenko's operating profit is expected to more than double from $55.6m in the 2014 fiscal year (nine month period due to change of year-end), to $121m in 2015, and $174m in 2016, according to analysts at both brokerage Arden and Investec. An issue that needs addressing The issue of GIC's and GEF's minority interests needs sorting out as soon as possible because the more Greenko's share price falls, the greater the potential dilution to its existing shareholders of which the top 11 institutions and investors control almost 80 per cent of the share registrar. Clearly, a highly dilutive share issue is not in their interests and they should be doing everything in their power to avoid this. That's because the financial liability from these minority interests is now almost double Greenko's market value of £110m as a result of the slide in its share price, so unless Greenko's board can restore some confidence in its share price then existing shareholders face being diluted by well over 50 per cent. That said, it's in the interests of both GIC and GEF to reach a compromise which in turn would enable Greenko's shares to re-rate to a more sensible valuation without investors fretting about being diluted any further. Also, it makes no financial sense for them to undermine the ability of Greenko's board to progress with its expansion plans as GIC and GEF are still only minority shareholders in Greenko Mauritius, owning less than a third of that subsidiary between them. In the event of a compromise being reached, I feel there is upside for existing shareholders. That's because after factoring in a December 2015 year-end net debt figure of around $920m, an increased issued share capital of 329m shares - assuming of course that GEF and GIC accept conversion terms around 100p a share - then Greenko's enterprise value of $1.5bn (based on a share price of 100p) would still be only 8.5 times fiscal 2016 operating profit estimates and 7 times likely cash profits. So if you followed my earlier advice I would hold onto Greenko's shares ahead of this summer's annual meeting and interim results in September as I believe that a positive announcement from the company's board on a resolution to the issue of the GIC and GEF minority interests could prove a watershed for its battered share price. It's worth noting too that the shares are now in extreme oversold territory (the 14-day relative strength indicator has a reading of only 20). Hold.
12/6/2015
15:19
bikwik: Two key things really: Selling pressure has all but dried up in the last four days and buyers are beginning to return, particularly today when most of the blue chip stocks are down. The bottom line on the chart measures the volatility of GKO, ie basically showing when the price trends (can be either up or down) and when the price is not trending - when it is in a sideways range. As you can see volatility has got back to the lower side of the range and therefore reflects the current non-trending state of the share price. Since April the volatility line has been nice and cyclical, and while you can't be sure it will continue this way, it would not be unreasonable to expect volatility start to rise very soon, likely next week, seeing as it appears to be on the verge of turning up. Granted, it could trend down.....heaven forbid! However, we have quite a few clues, which I have already posted previously and the bullish volume action this week, that suggests it is going to be up. It is probably better to not know anything about the fundamentals to cloud the technical state of the price market in GKO. However, of course sometimes it helps, particularly that the underlying business is doing rather well, its just the dilution issue which has seemingly provided the downside catalyst to the share price for many months now. However of course I think the market is beginning to realise that it may have overdone the dilution element rather a lot. Thus we have a potential upside catalyst. Of course time will tell if I am right!
08/6/2015
10:43
seball: IC update I published a detailed analysis of the issues facing Greenko (GKO: 44p), the Indian developer, owner and operator of clean energy projects, only three weeks ago but given the share price slide since then another update is warranted. To recap, I initiated coverage on the shares when they were 138p ('Buy signal flashing green', 18 March 2013), the price subsequently hit a high of 190p and I then downgraded my advice to hold at 104p post the fiscal 2014 results announcement ('Small cap updates', 31 March 2015). There has been no corporate newsflow since my last article (‘Break-out looms for mobile wonder’, 12 May 2015), but clearly some investors have bailed out, hence the share price drop from 70p to 44p in the past three weeks. This has resulted in Greenko now being valued at £68m, or almost £100m less than its equity shareholder funds, and reflects the potential for a dilutive share issue on the conversion (into ordinary shares) of the minority interests in Greenko Mauritius held by the Government of Singapore (GIC) (whose investment has a value of £140m), and Global Environment Emerging Markets (investment has a value of £75m). I raised this specific issue in both my March and May articles, noting that GIC has the right to exchange its 17.38 per cent interest in Greenko Mauritius into Greenko ordinary shares anytime between 1 July 2015 and 30 June 2017. True, the number of shares that can be issued to GIC is capped to prevent it from owning more than 29.9 per cent of Greenko's enlarged ordinary share capital. But with Greenko’s share price now so depressed, then if GIC takes up its conversion rights next month then it will not only be issued with a chunk of new equity in Greenko, but will also end up owning a minority interest in Greenko Mauritius as well. The same applies to Global Environment Emerging Markets (GEF) which has the right to exchange its 14.09 per cent interest in Greenko Mauritius into Greenko ordinary shares anytime between 1 July 2015 and 30 June 2017. Clearly, there needs to be discussions between GIC and GEF and the board of Greenko to resolve the conversion issue as a matter of urgency. It would be negligent for the board of directors not to protect the interests of their own shareholders. Furthermore, it makes sense for all parties to come to some sort of compromise agreement as soon as possible, and preferably before the first exercise date on 1 July 2015, in order to reverse the steep fall in Greenko’s share price which has so undermined investor confidence even though the business has been making strong progress operationally. From a technical perspective, I would point out that Greenko’s share price is as oversold as it ever has been: the monthly RSI is below the level at the March 2009 bear market low, and the weekly and daily readings are in extreme oversold territory. At the intraday low of 40p yesterday, the price was also close to testing the support level at those March 2009 lows. From my lens at least, this technical set up is such that any positive news regarding a resolution to the conversion issue should lead to a very sharp bounce in Greenko’s share price given the massively oversold technical conditions. In the circumstances, my advice is to hold on.
05/6/2015
06:17
seball: Clarification on share conversion news due.This Email response was posted on another bb from company 2 weeks ago. GKO's response to my email The management and the board is focused in resolving the issue with share price drop. The underlying business and its fundamentals are strong and tracking in line with expectations both at the financial numbers and growth ;plans level. The current share price drop has been a function of the concern on convertible shareholders in the subsidiary with rights to swap into PLC share may lead to significant dilution. We are actively working with institutions and convertible holders to enable clarity in the dilution and report back to the market in 2 weeks period. Post which we believe 1GW operating portfolio and strong long term financials will be reflected in the share price and recover rapidly from these levels.
03/6/2015
11:27
bluerunner: For what it's worth, here is Simon Thompson's (IC) view, posted on the 'Hitting Target Prices' discussion board today (in response to a reader's query about GKO): "I would point out that the share price is as oversold as it ever has been: the monthly RSI is below the level at the March 2009 bear market low, and the weekly and daily readings are in extreme oversold territory. The price is close to the support level at those March 2009 lows too, so any positive news on the conversion issue could lead to a very sharp bounce in the share price given the massively oversold conditions. I would hold on for now despite the stomach churning share price drop in recent weeks."
08/5/2015
16:35
hutch_pod: My understanding is that two of the previous fundings (GEF from 2009 and GIC from 2013) become convertible from subsidiary equity into GKO equity at a fixed value. Hence the lower the share price, the higher the dilution. This was arguably sensible with a rising share price but less so at 70p. Even after dilution though, the PE/PEG ratios seem attractive given the huge drop in share price. It seems that more recent funding eg the $550m debt from last year does not have this issue, but there surely is confusion/concern over the fairly complex financing structures in place. Which is a shame, as they seem to be delivering (very) well operationally and the debt financing was a smart move to improve profitability.
10/2/2014
20:07
937huff26: alan@bj As the exchange rate for the Indian Rupee to the GBP has worsened, GKO share price has risen as assets have come on stream, as the Rupee improves then the share price should rise further, I do not know whether the company has any financial instruments in place for hedging but you could always ask them.
27/3/2013
13:00
king suarez: No, I'm afraid its not as simple as that. You really have to read the full details of the circular to understand the conversion. I think the first RNS re conversion @ 260p was a bit miss-leading by the BOD. The details are: 1) CIC get 74m GM shares for their £100m 2) Between July 2015 and June 2017 they must convert these to GKO shares, or lose them! 3) The total number of those 74m GM shares eligible for conversion depends on a) the timing of conversion, and b) the share price at time of conversion, as explained in the adjustment agreement, c) whether or not CIC would hold more than 30% of the existing GKO shares in issue following conversion. 5) The MINIMUM no. of shares to be converted to GKO shares is set at 44.6m GM shares. The MAXIMUM could be in excess of 74m shares, and this will depend on the total no. of GKO shares in issue at the time of conversion, along with those factors in point 3) above. 6) Any excess GM shares held by CIC that are not eligible for conversion are sold back to GKO for £1 in total. Any additional shares required to be converted (above the 74m issued) will be issued to CIC at a price of 100p. 7) To calculate the ACTUAL no. of GM shares to be converted you have to look at the adjustment agreement formulae, which state that the £100m equity is converted into (at least) £121m worth of GM shares per 1st adjustment (if exercised 2015, more if later - 2nd/3rd adjustment formulae), which are then divided by (The Agreed Price) to determine the actual no. of shares eligible for conversion. The key part: 8) 'The Agreed Price' is the lower of the 5 day weighted average price preceeding excercise OR 260p (so @260p if, and only if the GKO share price is 260p or above on exercise date). This means you take your £100m equity, you multiply that by whichever formulae is applicable per the adjustment agreement, depending on the timing of exercise, THEN you divide this value by the share price at the time of exercise (The Agreed Price), and THAT is the no. of GKO shares that CIC will be issued in a 1 for 1 exchange for their GM shares. The minimum is 44.6m, which will occur if, and only if, the GKO share price is @260p or above when converted. The maximum is 30% of the total GKO shares in issue at the time of conversion, whatever that may be. It would be 60m shares currently, if no further shares are issued (150m shares in issue + 29m shares to be issued re resolution 3 of the circular x 30%). It is quite complex! Regards, KS
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