Gran Tierra Energy Share Discussion Threads

[gdasinv2] 30/12/2010 12:12

empirestate , very well said. I have done comprehensive Analysis on GTE and also they have huge support from Swiss and US govt for the Clean Technology. I am impressed with current contract and Income, Revenues on the RNS. The value is undervalued and there was a pressure from Zouk's investment to sell the aviation in order not to dilute rather have liquidation for a healthy future. Surely the asset worth 35-40p in my opinion and can be sold if required around this price.

[gdasinv2] 30/12/2010 12:11

empirestate , very well said. I have done comprehensive Analysis on GTE and also they have huge support from Swiss and US govt for the Clean Technology. I am impressed with current contract and Income, Revenues on the RNS. The value is undervalued and there was a pressure from Zouk's investment to sell the aviation in order not to dilute rather have liquidation for a healthy future. Surely the asset worth 35-40p in my opinion and can be sold if required around this price.

[jakleeds] 30/12/2010 12:04

Also very interesting is that the most recent addition to the board - Mr John Mapplebeck who joined as a non-exec director in August - serves as the Chairman of Zouk Solar Opportunities Ltd which invests in solar energy.

Mr Mapplebeck, aged 66, is an experienced director with extensive knowledge of
corporate, investment banking and capital markets in UK, Europe and USA. A
career banker with NatWest, Mr Mapplebeck spent 8 years in New York working with international energy, power and natural resources clients. He was Global Head of Project Finance based in London before being appointed to the Boards of a number of the bank's UK and European major subsidiaries. After leaving NatWest in 2000, Mr Mapplebeck joined the board of JKX Oil & Gas Plc, a FTSE listed independent oil and gas company with interests in Ukraine and other eastern European countries; he was Chairman of JKX's Audit and Remuneration Committees. In 2002 Mr Mapplebeck was appointed Chairman of Killingholme Power Group Ltd which owned and operated a 650MW gas-fired power station on the Humber estuary. THE POWERSTATION WAS SOLD TO CENTRICA FOLLOWING COMPLETION OF AN EXTENSIVE TURNAROUND PROGRAMME.

[tullynessle] 30/12/2010 11:46

Jakleeds - excellent research.

Helps to explains some of the phrases in the RNS yesterday.

[jakleeds] 30/12/2010 11:38

Zouk's investment philosophy - they are the second largest holder in GTE:

Our Clean Technology Investment Strategy

Zouk invests to build global cleantech companies

We focus on growth investments in cleantech companies with proven technologies. For this reason we seek investments in companies with a few million Euros in revenues. Typically, these companies are embarking on an ambitious growth trajectory and require additional equity funding to scale their business. We focus on supporting excellent management teams that aspire to grow their business to the next level. Our experience shows that it is at this stage that companies benefit most from our capital and our advice, resulting in the highest value creation for all parties involved.

The growth capital we invest can be used in multiple ways: to expand production capacities, to enter into new commercial territories, to further innovate around a core product, to strengthen a company's talent or simply to provide working capital for rapid organic growth. Our overriding objective is to build globally leading technology companies.

Cleantech is largely industrial by nature and companies can consequently have a high capital demand. We select the most capital efficient companies to invest in to maximize the value creation of our investment. We like to invest on a fully-funded basis to allow our management teams to focus their energies on doing what they know best: building successfull technology companies on the back of intelligent funding. This means we will generally provide sufficient capital to support a company's growth plans through to cash-flow breakeven or to an exit. Typically, zouk invests €5-20 million of growth equity per company over the course of an investment. If a company requires a higher amount of funds to meet its growth objectives, we will invite trusted co-investors to a transaction.

Our investment horizon extends over 3-5 years, at the end of which we will work with management and shareholders to realise value through a trade sale or a listing. At this point, the experience of our team is critical: we will help select the appropriate exit strategy and introduce the right partners on the buy-side and the sell-side of a transaction.

[jwe] 30/12/2010 10:33

IMO-this is a race between cash burn and eventual insolvency, and selling the business,if they manage that within a reasonable time frame holders,will,imo,be very well rewarded,but this is not for me and the end of my contribution here for now
Good luck

[6kenny] 30/12/2010 10:05

cheers empire,

I thought I had read it right. I think they are pretty poor at running a business and will end up selling it as we all seem to agree.

right...off for a bike ride!

[jwe] 30/12/2010 10:02

Kenny-Yes,in a way.EU approval granted but awaiting a disributor agreement which has not been as straightforward as i thought it might(as ever!).However new TCM distribution deal announced(with guaranteed sales otherwise the distributor has to pay penalties-very good for TAIH) with the very strong likelyhood of more TCM agreements to come.The single deal will multiply existing TCM sales going forward into 2011
Empire-A reasonable viewpoint from a bull i feel-thanks.Personally i think they will ultimately need to sale the company to a bigger,more well funded outfit to stay afloat.But as you say this does provide a cushion

[empirestate] 30/12/2010 09:47

6k, the sale of the company is the likely outcome here imo, the sale of the aviation business was essential and was probably pressured by the largest investors, being the loan note holders, as they obviously need to protect their significant interest in the company. raising funding will always be an issue with a company such as GTE and the reason for not being able to attract a strategic investor would have been primarily due to the largest investors not willing to have their holding diluted by a new shareholder who wanted to get a decent deal. the share price obviously also didn't assist as the dilution to the largest holders would not have been worth their while accepting. in the short term through the sale of the business there is a liquidity cushion from the funding,which yes will be required to a large extent to meet the loan note repayments down the road. the price obtained for the aviation business is reflective of the intrinsic value of the GTE product offerings rather than the existing earnings performance of the offering and with this in mind i think that fairvalue for the remainder of the business including debt would be around 25p to 30p.

[6kenny] 30/12/2010 09:44

jwe,

been in TAIH and done that....are they still waiting for EU approval for distribution rights?

gdas, stop being so irresponsible and immature, answer my questions of last night.

why are they not paying off the loan notes (15% apr)with the sale proceeds? because they need the cash.

why did they mention equity funding or debt refinancing? because they need the cash

why did they mention sale of the company? who knows!

[conk] 30/12/2010 09:42

if it goes on like this we will be top of the leaders board.the wrong one that is.

[jwe] 30/12/2010 09:33

UMM...without this sale it is very likely that they would have gone bust,and it is still not a given that they will not-again i suggest you read the accounts in particular cash flow with the narrative
Kenny-If you are interested in a share completely backed by cash,high blue sky potential and NO cash burn take a very good look at TAIH.

[gdasinv2] 30/12/2010 09:29

No brainer, Again Patience is the Key...human nature. They sold the aviation business @11p 300% premium to their market Capital. Can't you understand the Asset valuation ...much much higher not less than a min 35 - 50p range. Still order book and contracts are solid.

[gdasinv2] 30/12/2010 09:29

No brainer, Again Patience is the Key...human nature. They sold the aviation business @11p 300% premium to their market Capital. Can't you understand the Asset valuation ...much much higher not less than a min 35 - 50p range. Still order book and contracts are solid.

[jwe] 30/12/2010 09:27

Kenny-Yes they did,and if they do manage that i`m sure you will be well rewarded.I`ll keep this on my watchlist for now

[turkey3] 30/12/2010 09:27

Getting ready 2 top up...GLA

[6kenny] 30/12/2010 09:18

jwe,

still here as I am in no rush. I believe they mentioned 'sale of the company' for a reason and IMHO that will be the end result here.

[jwe] 30/12/2010 09:15

Kenny-I note from reading the thread last night you are in at around 9.25p so hope you took the advantage of the rise to sell out or reduce.
It is certainly not all doom here(a very good price has been acheived for a small part of the business afterall) just too many question marks regarding the running of the company for me,particularly cash burn and,given future commitments that does not look to be ending any time soon

[minky65] 30/12/2010 09:05

A Question . How many of GTE staff work in the aviation part of the buisness as I assume they will be soon working for P&W and therefore no longer on GTE's payroll, a further saving.

[empirestate] 30/12/2010 09:04

6k i will just look through the previous posts and add my take

[6kenny] 30/12/2010 08:59

jwe,

you are wise to stay away, much safer stocks out there. noone has answered our raised concerns from last night, I await empirestates considered opinion...

I see this dropping short term as the 'traders' sell for a quick porofit

[jwe] 30/12/2010 08:41

Does not look like that that to me,and,those of you that bought without reading the accounts i strongly suggest you do so

[cliley454] 30/12/2010 08:20

The rise continues, looks like a re-rating back above 10p.

Off topic take a look at FTS, they announced completion of a deal after hours last night that gives them cash equal to market cap and a possible divi on the cards, DYOR.

[jwe] 30/12/2010 08:08

Kenny-To be fair i`m picking the worst case senario for cash burn based on the fact that they had to use $4.5m of the new facility plus there was @30th June $3.3M cash on the books,of course some of it could still have been there.In any case cash burn was substantial for such a small company.I will not be investing here unless someone can come up with a viable explanation.I`m sure it will get pushed further up in the short term but feel `all is not what it seems here`
Good luck to those that hold,not sure i`d keep them too long though

[jakleeds] 30/12/2010 08:07

Back through 8p like a knife through butter. Here are some titbits from yetsterday's statement:

"resulting in two MAJOR longer term service agreements with leading power generation companies"

"The energy industry understands the need for equipment upgrades to meet new economic, environmental and operational challenges and THE COMPANY IS WELL POSITIONED TO MEET THESE NEEDS"