|Caparo Energy Limited
("Caparo Energy" or the "Company")
Caparo Energy closes second tranche of Mezzanine
Further orders placed with Suzlon
Notice of EGM
Closed Second Tranche of Mezzanine:
The Board of Directors of Caparo Energy (the "Board") is pleased to announce that Caparo Energy (India) Limited ("CEIL"), the Company's wholly owned subsidiary, has closed a second tranche of mezzanine funding. This second tranche of mezzanine financing, which is for a 4 year term, of Rs. 1,500m (US$33.5m) is being provided by the Infrastructure Development Finance Company Limited ("IDFC").
As stated in the Company's previous announcement of 20 June 2011, the terms of both tranches of mezzanine financing entail no equity dilution for Caparo Energy's existing shareholders. The Board believes that this will result in enhanced equity returns for investors. The Company expects to repurchase/buy-back both tranches of mezzanine from internal cash flows and the issue of senior debt instruments, bonds or other debt refinancing, within three to five years.
The Board believes that securing these two tranches of financing, totalling Rs 5,000 (US$112m), is a significant step forward for the business and anticipates that this additional funding, along with the Company's existing resources, would enable the Company to develop approximately 700 MW of wind projects.
Purchase orders for 260 MW placed with Suzlon
Since our previous announcement, CEIL has placed specific purchase orders with Suzlon Energy Limited ("Suzlon") for a further 260 MW of wind projects for delivery by March 2012. When combined with the 100 MW ordered in February 2011, CEIL's total purchase orders have grown to 360 MW, of which 52 MW have already been commissioned, with the balance expected to be commissioned in stages by March 2012. The Company will release further updates of orders being placed for delivery by March 2012 in due course.
The new purchase orders for 260 MW cover five individual projects located in the states of Maharashtra, Gujarat, Karnataka and Rajasthan. All of these sites have wind data using a met mast measured at different heights for an average period of over four years and are fully permitted.
The Company has selected these sites based on detailed analysis and independent wind studies completed by internationally recognised firms in this field, and the Board is confident that these projects represent some of the best sites being commissioned in India over the next two years and that the Plant Load Factors ("PLF") for these sites are very attractive.
Following the placing of these orders, which are ahead of the schedule previously announced, the Board anticipates that by March 2012 the Company will have a total of 500 MW of fully operational projects connected to the grid and generating cash flow. Additionally, the Board expects to achieve the full 1 GW of project orders with Suzlon by March 2013.
Management Team of CEIL
CEIL has been building its management team and would like to report that it has identified and recruited certain key personnel to further execute the Company's strategy:
R. Ramakrishnan has been appointed as President of CEIL. Prior to this appointment, he was CEO/Managing Director at GMR Industries (GMR Group is a diversified infrastructure group in India with interests in power, airports and roads) for four years before becoming Group Corporate Head of its Renewable Energy business. Previously, he was the Chief Executive of Sanmar Group and, prior to that, was with the Murugappa Group for 20 years where he worked in Sales & Marketing, International Business Development, Product Management, Manufacturing & Technical services.
CEIL has also made a number of hires in various departments across the company including wind resources, project planning and execution, finance, legal and operations and maintenance, as it continues to look towards the Company's progressive growth for the future.
The Company would also like to report changes in the composition of the Board:
Angad Paul, CEO of the Caparo Group, is stepping down from his current role as Non-Executive Chairman of the Company and will continue as a Non-Executive Director. Accordingly, Ravi Kailas has been appointed Chairman of the Company, in addition to his current role as CEO of the Company.
In addition, Charles Wilkinson, Independent Non-Executive Director of the Company based in Guernsey, will not be standing for re-election at the forthcoming AGM.
In light of these developments, the Company intends to appoint two additional independent Non Executive Directors to the Board in due course.
Notice of EGM
The Board announces that a circular containing a notice of Extraordinary General Meeting ("EGM"), to be convened for 5 September 2011, at 10 a.m at Anson Place, Mill Court, La Charroterie, St Peter Port, Guernsey, GY1 1EJ, Channel Islands, is today being sent to shareholders. The purpose of the EGM is to seek shareholder approval to update the relevant Board authorities to issue shares and dis-apply pre-emption rights and to change the name of the Company from Caparo Energy Limited to Mytrah Energy Limited.
The notice of EGM and form of proxy, together with an explanatory covering letter from the Chairman and Chief Executive Officer, is being posted to shareholders today and will shortly be made available on the Company's website at www.caparoenergy.com.
Ravi Kailas, Caparo Energy's Chairman and Chief Executive Officer, commented:
"The closing of the second tranche of mezzanine financing in a timely manner puts our company in a position to fund over 700 MW of wind projects without any dilution to existing shareholders. We are also pleased with the strengthening of our management team with people who have a proven track record in the industry. By placing 360 MW of orders with Suzlon for delivery by March 2012, the Company demonstrates again its ability to build utility scale wind power projects with an unprecedented efficiency.
"As the Company's transformative growth continues, its identity has also evolved. Accordingly, the Company is proposing to change it's name to Mytrah Energy Limited and we are excited by the Company's prospects of trading under this new identity. The Board would like to re-iterate its gratitude to have begun as Caparo Energy and would like to thank the Caparo Group for their on-going support to the Company."
Further information on the Company can be found at www.caparoenergy.com.|
Caparo Energy has signed fixed cost, fixed term contracts for 3GW of wind capacity. With deliveries of 500MW by March 2012, this will make it one of India's leading IPPs. With a weighted average cost of US$1.16/MW, it has secured possibly the lowest new-build cost in the market and, as these are turn-key contracts, this ensures the most efficient use of capital.
Contracts in Place for 3GW
In addition to the terms for the delivery of 1GW from Suzlon, Caparo Energy has recently secured land leases for 3GW and has signed another wind turbine supply deal from Gamesa for 2GW for delivery by the end of 2016.
Deliveries Ahead of Schedule & Funded for 700MW
Caparo Energy is already generating and selling electricity and, contractually, it should have 500MW turning in the ground by March 2012. The Company has also successfully raised US$112m of mezzanine finance - without any dilution to existing shareholders. The Company is now financed for a total of 700MW. This should generate cashflows of US$95m+ per annum, which should fund organic growth of up to 2.2GW by December 2016.
Raising Price Target from 184p for 1GW to 284p for 2.2GW
2.2GW values the Company at US$884m (£553m) and 284p/share. At US$0.3m/MW, this is low and EV/Capacity multiples suggest a higher valuation than the price target. Our recommendation is also underwritten by earnings multiples and the Company should be re-rated as more capacity comes on-stream. BUY.
March 2012e March 2013e March 2014e March 2015e
500MW 1,150MW 1,450MW 1,900MW
14.2 146.8 317.5 407.0
11.7 137.9 306.1 384.4
1.4 42.5 88.3 107.0
0.9 26.0 53.9 65.3
nmf 7.1x 3.4x 2.8x
nmf 9.7x 5.3x 5.2x
US$1.5/MW US$1.2/MW US$1.1/MW US$1.0/MW|
|Caparo rides wind of change
Created: 28 July 2011 Written by: Graeme Davies
Indian power deficit is driving investment
Capacity set to grow rapidly
Agreements with major power equipment makers
More fund-raisings likely
Wind power can be unpredictable
Shortages of electricity are a major headache for India's government and a threat to the country's growth. The government's latest five-year plan forecasts a massive expansion in generating capacity; and renewable power - primarily wind power - will play a major part. That should put wind power producer Caparo Energy in a promising position.
Installed wind power in India has the capacity to generate 14.2 gigawatts (GW). That represents three-quarters of India's renewable power capacity and makes the country the world's fifth-largest wind power market. But the Indian Wind Energy Association estimates that the country has the potential to install 65GW, which means there is plenty of capacity for Caparo to go for.
IC TIP RATING
Tip style Speculative
Risk rating High
Timescale Long term
Caparo has secured a pipeline of wind assets that should establish it as one of India's major independent renewable power producers over the next five years. It also has contracts with major Indian wind turbine makers Suzlon and Gamesa. Under these, most of the development risk - and, with it, the working capital burden - will be carried by its partners. Caparo will buy the assets when they are close to completion. By doing this Caparo will, in a relatively short time, be able to boast a significant generating capacity.
Its early-stage pipeline is with Suzlon and the first 42 megawatts (MW) of capacity is already producing power. A further 25MW will be commissioned in August and another 34MW by the end of the year. A further 400MW should follow by March 2012, giving the company 500MW at the beginning of its next financial year. That should be sufficient to generate useful amounts of cash in the year to March 2013, at the end of which another 500MW of capacity should have come on stream.
According to management, that should catapult the company to number one wind power producer in India within two years. Caparo's bosses also reckon the company has some of the best sites available - an important factor because wind can be quite an unpredictable source of power generation.
CAPARO ENERGY (CEL)
ORD PRICE: 111p MARKET VALUE: £182m
TOUCH: 107-111p 12-MONTH HIGH/LOW: 124p 91p
DIVIDEND YIELD: nil PE RATIO: 7
NET ASSET VALUE: NET CASH:
Year to 31 Mar Turnover ($m) Pre-tax profit ($m) Earnings per share ($c) Dividend per share ($c)
2011* nil -2.0 na nil
2012* 14.2 1.4 0.9 nil
2013* 146.8 50.4 26.0 nil
% change +934 +3,500 +2,789 -
Normal market size: 2,000
Matched bargain trading
Meaningful figures unavailable
Caparo has already secured orders for the first 1GW of capacity under fixed-price contracts with Suzlon, and a recent fund-raising means finance for the first 700MW of this is secured. The contract with Suzlon allows for a further 2GW of wind-farm assets. Agreements are also in place with Gamesa for 2GW-worth of wind turbines, and Caparo has secured leases over land sufficient to install 3GW of capacity. All that activity means its longer-term target to install 5GW of capacity by 2017 - enough to give it real clout - is feasible.
Power will be sold through a mixture of agreements with state power companies and through direct sales to the private sector. Crucially, Caparo says it can produce power profitably without any subsidies, although some are available, including carbon credits, which could add further value.
SHARE TIP SUMMARY:
True, Caparo is likely to tap shareholders for more equity before too long, but it will become increasingly cash generative. According to estimates from broker Mirabaud Securities, Caparo's shares are rated at just seven times forecast earnings for 2012-13, based on turbines that will be in the ground by March 2012. This compares favourably with UK-listed Indian renewables power company Greenko, whose shares are rated at 10 times 2013 earnings. Caparo's rating is likely to catch up as its capacity grows. Buy.|
|Thanks boadicea.I'll contact both ie co and barc
|contoul - All you have to do (in theory) is wait but I cannot tell you how long that will be and I doubt (from past experience) that Barc will be much help on the details - although I would hope to be wrong in that. They are the first place you should try. (I assume they are your nominee holder.)
My only other suggestion would be to contact the company direct e.g. on 01 223 597 891, to enquire how long the compulsory acquisition and settlement will take.
You may find further contact info here -
|I am in need of advice. Was abroad and did not receive on time the takeover document from Barc. Sockbrokers.
Subsequently I did not answer and I can not answer right now as the timelimit of acceptances past by 30th September.
The offer declared unconditional and Nastor will "acquire complulsory any remaining Celsis shares from the shareholders who have not accepted te offer" as the Document describes
However my account has not been credited with the funds till now .
Am I going to receive the funds during next days or should I act?
And what I have to do?
Any advice is highly appreciated.|
|Those who went to the wire before accepting should find the cash settlement in their accounts around now.
BSL has arrived and they're not usually first!|
|Yes, SIXH looks good; the only question is about the right timing of purchase.|
Have a look @ SIXH - not a ramp & please DYOR
go with the flow
|Well, I've started re-investing in PCI & VEC, and I'm very pleased, so far. Did any of you look at my suggestion..RENE? Risky, but you would have been in profit already. Tomorrow it is moving from being traded on SEAQ to SETS.|
My biggest & longest single share investment too!
Will miss the informative debates of the CEL bb & hope to contribute on other mutual ADVFN threads!
Good luck to all.
go with the flow
|Like many on here will miss the Celsis thread, this was my longest held share and also one which should have given PI's alot more. Emails to me from JLC talking of shareholder value will forever be hollow imho. Hoping with JLC, CM and CM what goes around, comes around. Good luck to all fellow PI's in their future investments.|
|Good luck all. I sold out a few days after the offer was made. Have since done well on reinvestment so quite happy. However, I held Celsis for many years and it was by far the major component of my portfolio so it does seem strange not to see the name on screen.|
|Well, end of an era for me; longest held shares, most successful shares, and despite the management selling out...best managed shares.
This has been the most helpful and pleasant Bulletin Board I've come across, and it shall be missed. It would be good to hear of final recommendations for future investments! Good luck, everyone!|
|Selftrade would not let me sell yesterday. No longer showing in my list of shares|
|Im sitting tight too, i think the outcome will be at least 232.5p, no hurry.|
|Yes I was referring to dividend suspension.
I did not say "sell" - I said "accept the offer"
What's the hurry ?|
|Boadicea: I think ajk479 meant that dividends have been suspended, not the shares.
Mind you, it had me going too just for a moment!|
How can you even think of holding on?
You now have owners who will do everything they can to get cash out of the business as soon as possible and to minimise taxes. Their interests and yours are no longer aligned. They can, if they wish, cause CEL to take out a huge loan (which the acquirer guarantees) and have CEL pay it back out of what would have been substantial pre-tax earnings.
In this way, they buy the company and pay for it out of that company's own earnings.
Outsiders like you get nothing because their actions cause the company to break even or turn a loss.
One other thing. Who exactly is going to buy your shares when you decide you want to sell? What price will they pay you given that there is no longer a two-way market?
There are times to stand on principle and there are times to cut and run. Now is time for the latter in my opinion. Staying around guarantees you aggro and nothing more.|
|ajk479 - ".... since they have already been suspended."
Where did you get that information?
I see no reason for suspension, the usual criterion being something like insufficient information available for an orderly market.
I believe they should remain tradeable until they have gone through the normal channels and delisted on a 75% ownership or 75% vote. I would not now expect to see many deals but afaik a mm will still give you 232p for them if you don't want to wait 14 days for the full 232.5p.|
|Nastor Investments now hold,or have valid acceptances for, 68.74% of the share capital. If I correctly understand their statement on settlement terms, all of those shares will have been paid for by 17th September and they will therefore have committed almost £M35 plus expenses to the cause. To reach 75% they need another 1,370,000 shares(approx). They managed 947,629 in the month since the offer. There are clearly still a lot of unconvinced holders out here.
If they eventually get the required number to allow an application to de list then I will have 14 days to accept the offer. Meanwhile I will continue to sit on my hands and the 113,000 shares held. I have been a holder for over 8 years and now is not the time to be the proverbial headless chicken - after all I presume they will run the company they now control in such a manner that their investment (and presently mine) is protected and grows!
The threat of no dividends or distributions rings slightly hollow since they have already been suspended. Last years Interims were posted on 12th November. If they haven't managed to secure the required shares soon, then this years Interims will be a very interesting read - would they talk it up or talk it down ?|
|I was too embarrassed to mention I had OMH (osmetech) shares, but they have just flickered. Is it a pulse or a death rattle? DYOR.|
|Out at 232.01, having been in at 12.9 (pre 5 to 1 consolidation). Quite a rollercoaster!|
|I understand that if shares are held in nominee accounts (BSL, SelfTrade etc) we will receive a further communication with acceptance option and explanation.
Mine, fortunately, are all in ISA's so no CGT problem.
The question how to re-invest is constrained by the need for ISA-ability.
In the Bio sector I like VEC (good cash reserves and cash flow position compared to many competitors) and I rate the ability of the management to see a good deal. OXB is also comfortable for cash but has a more chequered history - equally, greater recovery potential but more management questions..
In the 'green' sector, DIA is well-managed but not particularly cheap, also subject to volatility and often wide spread for no obvious reason on low volume.
To an extent combining 'medical' and 'green' credentials there is CAR. Now this is a really interesting vehicle (pun fully intended, I'm afraid). It is in high precision plastic parts for the medical industry - both highly profitable and steadily expanding with a very impressive list of contracted customers - having exited in very timely fashion from the automotive market, except for up-market LED lighting fitments.
Included in CAR is an embryonic metallic micro-printing facility, Conductive Ink Technology (CIT) which can produce rfid antennas at minimal cost as well as having potentially vast application in touch-screen, oled, poled and similar fields requiring circuitry applied to flexible plastics.
The CAR thread is highly informative - it has even been commented on in the press (FT I think) - mainly as the result of meticulous research posted by "wan". Above all, I rate the management top notch based on their impressive re-alignment of the company and incisive investment of realisation proceeds over the past eight years.
The bombed-out property sector, 'REIT' funds etc, are also showing signs of life, boosted by the recent approach to MERE. The actual offer there, if and when it comes, will be interesting, as will the market reaction to it. A similar fund, IERE is just as promising and has received less attention so far, so could be a more rewarding punt. This is not my usual area of interest but currently looks worth investigating.
I have positions of varying extent in the above and am not intending to ramp. It's just my views on a short list of ideas for those who want to do a bit of background research into where to go next.
I am equally anxious to read whatever suggestions others may have as I need to diversify to some extent.|