Indian Energy Share Discussion Threads

[baldeagle5] 13/7/2011 13:51

My brokers.

[dshox1] 13/7/2011 13:47

really! where are you picking up these messages if you don't mind me asking?

[baldeagle5] 13/7/2011 13:26

The clear initimations I have had is that a deal nearer 40p is being actively pursued.

[dshox1] 13/7/2011 13:22

sure - but it entered into Exclusivity with one party that is "known to IEL". don't know who this would be but I expect it would stop IEL accepting a bid from elsewhere unless they paid a penalty whilst the exclusivity period is still running. what it does mean tho, is that IEL can always drive a harder bargain.

[baldeagle5] 13/7/2011 13:03

The CEO's statement of early June referenced other parties -
"As stated in the Pre-Close Statement, the Company has received a number of approaches and has been actively pursuing these."

[dshox1] 13/7/2011 12:26

what do you mean "other two bidders?"

[baldeagle5] 13/7/2011 12:07

It seems the other 2 bidders are ready with a cash trumper - maybe we get nearer 40p after all?

[baldeagle5] 13/7/2011 11:19

Dshox - thank you for the info. Very interesting. It seems a resolution is due within the next 6 days. I cannot believe that Utilico would vote through a deal less than 35p a share.
I might buy some more.

[dshox1] 13/7/2011 10:08

I don't know the price of course. I am clear that calculating a valuation based on a NAV is too simplistic and inappropriate for an M&A negotiation. In fact, DCF model is more appropriate that is adjusted for balance sheet variables, interest rates in India, and whether you use P90, P75, or P50. Theni is too early in its life to generate a "P" number, and Gadag entered operation during India's worst monsoon season for 75 years so it was operating at P90. Clearly a vendor would want to base its valuation on P50. No doubt Indian Energy's management has made the case appropriately. We know from the half year statement that cost cutting alone would allow IEL to breakeven even at the P75 level.

I asked the CEO whether the deal would be good for all shareholders and not just the institutions. He replied that it would be and the point of the deal is to get IEL out of a near limbo situation and open up a strong opportunity for all. Indeed, it is the need for finance (bank loan or the financial firepower of a suitor) that is holding IEL back from multiplying its output by 5x in the next 2-3 years.

[energiser01] 13/7/2011 09:54

Some speculation re Utilico on here, they announced the followng yesterday, so they have some cash if reqd perhaps ? Timing may not align and be just a coincidence, as they say to reduce debt.

Utilico Investments Limited

Portfolio update

Utilico Investments Limited ("UIL") has today sold 15.0m Infratil ordinary shares ("Infratil shares") at NZ$1.80 per share through the market to an institutional investor.

UIL has also today entered into an agreement to sell a further 15.0m Infratil shares to HRL Morrison & Co. Limited, Infratil's investment manager, at NZ$ 1.85 per share, conditional upon the approval of Infratil shareholders prior to 30 September 2011. The agreement provides that 10.0m Infratil shares will be settled shortly after Infratil shareholder approval with the remaining 5.0m Infratil shares due to settle on 30 March 2012. UIL will retain all dividends and other distributions and be able to vote the shares until settlement of each tranche.

These sales are together expected to reduce UIL's largest investment, Infratil, by some £28.5m to £78.0m, a reduction of 26.8%, and reduce Infratil from 25.4% of the portfolio to 18.6% (assuming funds are reinvested). While UIL has been both pleased with Infratil's operational performance and supportive of its investment manager, UIL believes that it is sensible to reduce its holding in Infratil and take advantage of the high NZ Dollar exchange rate. Initially the funds will be used to reduce UIL's bank debt which is drawn in NZ Dollars.

dyor etc..

[baldeagle5] 13/7/2011 09:14

Good find.
DSHOX - your 'source' also concur with the rumour above re 35p exit?

[htrocka] 12/7/2011 22:40

I wonder if this is the buyer...?, the dates `sort of` tie-in with IEL`s last Corporate Update.

[dshox1] 12/7/2011 22:32

will be a deal update at the prelims on Wed next week if not before. after hours buy too that isnt showing on the lse data too.

[baldeagle5] 12/7/2011 21:13

100K buy today @ 23.25p - 2nd one in 3 days.
Word is this goes at 35p and within a week.

[dshox1] 12/7/2011 14:49

oooh I completely missed that as rather stupidly, I was reading "bottom up" and saw 31 Mar 2011 as the most recent date! thanks. very good - that's next week!

[showmethehoney] 12/7/2011 14:35

DShox1 - You really are in the loop, what with your 'contact' an all. Did your 'contact' forget to mention results are due on the 20th!

Try IEL's web site for that info!

[dshox1] 12/7/2011 13:18

htrocka - where are you seeing the announcement that results will be out on 20 July?

[dshox1] 12/7/2011 12:41

ps. I was told that the likelihood of an offer was much higher this time round because the party is "known to IEL". I was also told that we haven't heard about the deal yet because when an offer is announced, the UK Takeover Code imposes a strict timetable to complete. The paperwork is extensive (iro legals etc - I assume things like Sale & Purchase agreements) and this I understand is where the hold up is. The CEO has a "date in mind" but obviously cannot tell me what that is, but seems very positive.

[dshox1] 12/7/2011 12:33

I'm on iii - I have had CEO correspondence. The CEO did say the bid would likely be at a premium to the share price (when it was 26p). The Chairman points out NAV is 53p in H1, which I estimate will have risen for H2 now Theni is on line.

Other posters have confirmed that "both sides are ignoring the current sp" and I can back that up, as I understand a price has been agreed and now they are working through the paperwork.

Everyone is speculating about the price - I'm guessing a worst case is in the mid 30s but wouldn't rule out higher. The market cap is only £5.9m and I reckon IEL will generate a full year profit when the results are announced due to more influence from Theni on the numbers, the closure of the London office, and other factors. CEO did state in the interims that they were running within the P90 range of operation, and the cost cutting meant that they only needed to be above P75 to break even. This is no distressed sale, but one that is designed to get shareholders value and break the cycle of being in "limbo".

A deal is close and an announcement could come any day. My contact said he "wishes he could buy shares" and tells me (yesterday), that the "deals still on track".

[htrocka] 12/7/2011 05:26

the Intrim Results out on the 20th...if nothing else...we`ll get an update.

[baldeagle5] 11/7/2011 22:10

Why do you think that ht?

[htrocka] 11/7/2011 20:01

6 trading days to go.

[htrocka] 10/7/2011 08:12

9 days to go.....and counting.


(ps..having read this again...I doubt very much that IEL will be sold on the basis of `an increased 3-5x EBITDA`(this is the value the market is currently giving IEL)...hence my conclusion being that some form of intergration/consolidation is looking favourite.) With a `Strategic Investor` having ulteria motives, hence the inclusion of the term `premium` to the statement)



one final point...It`s interesting that UTILICO, the largest shareholders, base their whole management criteria and company valuation on NAV`s.( as can be seen from their news rns`s (UEM))..this factor may enter into the IEL negotiation equation?

[htrocka] 09/7/2011 19:52

10 days...and counting.

[baldeagle5] 08/7/2011 19:02

The iii board is full of posters saying they have emailed the CEO and confirmed that the statement put out early Jun remains intact - namely (a) they are in bid talks still and (b) that a take-out will likely be at a no substantial premium.

Interesting.....