National Grid Share Discussion Threads

[utyinv] 09/1/2012 18:52

Considering the media were saying talks were at an advanced stage before Christmas; It's all gone very quiet on the Chinese issue........???

[darias] 08/1/2012 16:02

Chris 1604

But they haven't replaced 4.25% debt next year they have replaced it this year at 6.25%.

They could have kept the 4.25% debt and then negotiated a rate next year which, with inflation falling might have been less than 3.25%.

I took out a mortgage on my business 10 years ago at 2% over base. This is when inflation was around 2-3% and base rate about 3-4%. Banks were lending money hand over fist at less than I was paying.

I renegotiated the mortgage 5 years ago and got 1.8% over base. Now my mortgage is 2.3% find any other mortgage out there at that rate!

The point I am trying to make is no-one can predict the future we can all know what happened in the past. In the past NG had debt and was paying 4.25%. Now they have debt and are paying 6.25%.

[4spiel] 08/1/2012 14:14

National Grid have paid out return of capital before on the sale of units.Many people buy in the expectation of a profit on their investment they can cash in but are disappointed. Then they have a share 'consolidation' which means they take it all back -which means you get nothing in the bank. Just fewer shares in a smaller business that is argued as more profitable as a result. But past returns is no guarantee of future returns.As for selling to the Chinese -well the polite gentleman in suits currently running the show still lock up people for long terms for putting pen to paper and if these gentleman are in the musical chairs replaced in time by men in tunics or uniforms would you be concerned about the Chinese Government in effect having their fingers on the gas taps ?

[septimus quaid] 08/1/2012 13:41

Faulty link?

[l2user] 05/1/2012 10:44

Balfour Beatty agrees £750 mln contract upgrade with National Grid
9:38 am by Andre Lamberti

[utyinv] 03/1/2012 15:11

Gregory0106,


Yes there would. Instead of being approx 3.5 Billion shares in circ there would be 3.85 Billion.

However, as a major partner with lots of money to invest, NG would not have any trouble getting debt to fund the £22Billion investment plan over the next few years. Money invested is allowed to be clawed back from customer bills. However, using new RIIO rules (from next year) clawing back all the investment from our customers can take up to 40 years......

[gregory0106] 03/1/2012 14:55

If they issue a 10% stake in shares to the chinese won't that dilute our existing holdings as there will be 10% more shares in issue?

[neddo] 03/1/2012 12:03

a special divi would not be a bad thing ?

[lennonsalive] 23/12/2011 21:57

When Transco merged with NG all those years ago, I was told the plan was for NG to asset strip and sell off the gas side, so they would be left with the high level transmission and distribution for gas/electric. Seems that rumour could be true, as NG have sold off most of the smaller parts of the business which do not fit in with the above strategy.

The idea behind the purchase of Keyspan with the funds from the sale of the gas distribution in 2004. Had been to share ideas and make savings from HR mergers, etc... Keyspan seems nothing, but a total waste of time. The bad weather, state redtape on what profits NG can make and no real savings from the purchase.

[septimus quaid] 23/12/2011 19:33

Apart from the dosh, I can see why NG would wish to get rid of the gas distribution networks, they are a bit of a liability in terms of public safety, fines by the regulator for mis-management and the amount of contaminated former gas sites on the books.

[utyinv] 23/12/2011 17:08

Newbank

Further to your post;

The National Grid is poised to sell off its four remaining UK gas distribution networks to the Chinese government early in the new year.
Talks between the British distributor and the State Grid Corporation of China are in the final stages, according to sources with knowledge of the situation.
Selling the four gas networks that the National Grid owns is understood to be one of two options on the table, with an official announcement expected early in January.
In 2004, the National Grid sold four gas distribution networks, retaining four. If the sale went through, the Grid would still own the gas National Transmission System – the high-pressure network that links to the eight regional distributors.
The second option is for the National Grid to make the State Grid Corporation a major shareholder in it by issuing a fresh wave of stock.
Either deal would help to raise billions of pounds of capital, as well as marking the latest example of an Eastern entity investing heavily in British utilities.
The Chinese state-run grid is said to be keen to invest in UK infrastructure and operations, and the National Grid's ability to sell its networks is an opening for the giant. The first option would see the Grid sell off each network to the Chinese.
A price-tag of between £1billion and £2billion per network is understood to be the most likely sum agreed, sources said.
When the four previous networks were sold in 2004, the total amount raised was £5.8billion.
The second option, which sources say is the more likely to be chosen, would make SCG a major investor in the National Grid.
The issue of 10 per cent of National Grid's total shares, valued at around £2.2billion, would be given to the Chinese company in a private deal, making it the largest shareholder.
In 2004, three buyers snapped up the four available National Grid networks.
A consortium fronted by SSE purchased the South of England and Scotland networks for £3.2billion.
The Wales and the West network went to the Macquarie European Infrastructure Fund for £1.2billion.
The North of England network was bought by a consortium led by Li Ka Shing's Cheung Kong Infrastructure Holdings for £1.4billion.
No one at the National Grid was available for comment.

[newbank] 23/12/2011 13:15

National Grid set to sell the four remaining distribution Gas Networks to the Chinese for between £1 Billion and £2 Billion in the New Year......

[skinny] 23/12/2011 12:32

Just sold a third of my holding @616.062

[chris1604] 22/12/2011 17:07

Darius

Sorry to create a furore

If RPI falls to 2% next year which is not impossible, they will have replaced 4.25% debt with 3.25% debt.

[pierre oreilly] 22/12/2011 16:37

Darius, I think the problem is people expect you to say what you mean, not to say something different and then change what you have said.

You initially compared the share ('stock') buybacks with their finance raising,which, as I said, are on totally different scales.

Now you seem to be saying you were comparing their buying back of debt to their raising of debt.

Perhaps you should learn to express yourself correctly instead of adopting a foolish and misplaced patronising stance.

[darias] 22/12/2011 14:32

They are not in the business of gambling they are in the business of maintenance and supply of utilities.

If inflation falls borrowing of 1.25% over RPI is even more generous. If inflation rises then the premium starts to look reasonable.

My word does nobody understand simple economics.

[chris1604] 22/12/2011 13:41

Darius

The bond issue is a pure inflation bet and with inflation predicted to fall sharply next year, this bit of business may not look too bad next year.

[darias] 22/12/2011 12:53

Pierre

I tried to go back through the news releases to see if there was any merit in your post but could not find the relevant release.

What I did find however is that the company has issued bonds (debt) at RPI +1.25%. Equivalent at todays rates of around 6.25% yet were busy buying back debt less than a year ago which cost 4.25%

Now you tell me whether trained monkeys could do better. The company are just playing casino with our money.

[pierre oreilly] 22/12/2011 11:11

Darius - you don't seem to have any appreciation of scale.

[lennonsalive] 22/12/2011 08:49

Ask at the AGM in June.

[darias] 22/12/2011 07:43

Look = wake up and smell the coffee.

The NG board must be the worst board in the FTSE 100.

How can they justify buying stock over many years and then carrying out a share issue? Nobody on this thread nor from the board has justified that apparent irrationality.

[betman] 21/12/2011 16:46

Thnaks for those posts, that would certainly explain the fall
I would rather fancy buying more at 565p but a divi cut would be a shocker to the city and they would be hit hard for awhile
If there is alte santa claus rally or new year one these might be left enhind as a defensive but I am sure there wil be lots of New year newspaper tips for the market makers to temporarily move up their spreads for the unwashed

[skinny] 21/12/2011 16:21

Deutsche downgraded them on Monday TP 565p

[lennonsalive] 21/12/2011 16:01

Ng. Have promised 8% increase per year, thus would be a massive blow if they did.