Opg Power Ventures Share Discussion Threads

[jozo] 21/2/2018 16:55

Somebody happy to accumulate at this price over last couple of trading days - been sponging up all the small sells. Not you in for more andycapp? :-)

[dave4545] 15/2/2018 17:32

Nice late move there. Clearly there is not a lot of stock out there atm, no overhangs no sellers etc etc it only takes a little bit of buying and the mm's run for cover

[andycapp1] 15/2/2018 10:32

I own a lot of shares, many more than you!! I own most of the Hargreaves nominees holding. Anyhow, your persistent ramblings contribute nada to the debate around OPG. Drivel such as the Indian population is growing and villages need power are utter irrelevances in context of OPGs equity NPV. So what if power demand is growing; it's been growing for years and that hasn't stopped OPG's equity falling 80%! The freighter is a complete red herring, it will contribute no value at all. What will bail us out is coal falling and/or tariffs rising and thus this thing generating decent free cash to allow debt to fall and dividends to resume. At the moment it's miles off as debt is still rising but the equity is heavily geared and so any change in tariffs or coal prices or captured plant EBITDA if sustainable, could make a big difference. We appreciate your status as Gupta's missing love child but do please try and contribute something worthwhile there's a good chap.

[azalea] 15/2/2018 08:57

With your constant pessimism, its a good job you don't hold any shares then.

[andycapp1] 14/2/2018 14:32

It’ll have to go bust! Oh good where do I get more shares from?? I hardly think spending the capital on a freighter is a good idea. Shipping costs are very low and how can OPG square off the small shipping cost savings versus it’s cost of capital on a single ship? I don’t get it Flowerhead. So justify it with some numbers? Which of course you can’t.

[azalea] 14/2/2018 09:47

Morningstar's share price chart only goes back to 2/6/2008, on that day the share price was 80.5p; before plunging to 20.75p, by the 15/12/2008. Based on those figures it would appear that in almost 10 years the share price has gone full circle, with several peaks of 93p to 104p, 110p; along the way.

Whilst coal prices are only just showing signs of reducing, its new 64k ton freighter should help to reduce overall costs of shipping coal from Indonesia. If India is to continue its rise in GDP, employment of 12m people coming on to the job market every years and meet plans to bring electricity to 18,000 villages for the first time, it will have to meet the nation's increasing demands for electricity. OPG, with a number of new generating plants is one of the most efficient in India; if it cannot make a profit then it will either have to go bust or put its prices up for both domestic and industrial customers.

[turbocharge] 13/2/2018 13:50

Long post jozo, I like this bit:

'OPG is not loved at all, but as the saying goes 'the darkest hour comes before the dawn'. With the right headwinds opg has the potential to reward investors at these levels. There is also some indication in the markets that investors are starting to seek out value.

Opg is far from being a lost cause, and 'value' will always 'out'. While significant risks still exist (IMHO), I sincerely hope for all on this bb that opg has bottomed and we are all able to enjoy the rewards of a sustained recovery.'

[andycapp1] 13/2/2018 12:18

Jozo, perfect summary. Good post and thanks. Pse read Flowerhead and take note!!

[jozo] 13/2/2018 10:56

oldboffy,

Thanks for your thoughts - I hope you're right and it turns out that I am indeed exaggerating!!

Strangely enough I too am hoping to make some significant money in opg for a second time and have been a buyer at prices ranging form 33p down to 17.6p - average price 22.5p

However a couple of bad experiences over the last 20 years with highly indebted companies have made me especially cautious. On the other side of the coin I have made significant sums from companies that have pulled themselves out of these situations.

I am, in spite of my posts, hoping for the latter with opg.

I suspect I am more than guilty to reacting to some of the blind one-sided 'this company can do no wrong' comments often seen on this bb.

Current cash flow may well be just enough to cover existing covenants and obligations but the rise in coal (up until 2 weeks ago) was exceedingly alarming and if sustained would undoubtedly have stretched opg's ability to stay cash flow positive particularly in the short term and would undoubtedly have put a serious strain on debt obligations.

Fortunately it appears there are signs (for a number of possible reasons as discussed by myself and yourself) that coal prices are at last reducing - this really needs to continue.

I also take your comments regarding group captive status being significant but from my understanding previous years (2016 and 2017) as well as going forward for 2019 have yet to be confirmed.
There is a degree of uncertainty here - the market clearly does not like this and is understandably cautious.

Also comments in recent results regarding withholding interest payments on long term debt, while I recognise as part of a process, are far form reassuring.

The resolution of both these issues will impact significantly on market sentiment.

I have copied and pasted the relevant sections below: -





''OPG Gujarat has recently received approval from the relevant Gujarat authorities confirming its Group Captive status for FY18. This is significant progress in resolving the matter of late payments and the Company anticipates that the amounts delayed for FY18 (approximately GBP5.3 million as at 30 September 2017) will be recovered principally in the current financial year. Constructive dialogue continues on receiving confirmation on Group Captive status for FY16 and FY17 and, consistent with the view held at the Group's FY17 results, management continues to expect the recovery of the monies, approximately GBP26.1 million as of 31 March 2017, withheld by theDISCOMs''.............................................
.............................

''The Group has been in regular dialogue with its lenders at the Gujarat plant with regards to the long term loans at its SPV, OPGS Gujarat ("OPGG"). Due to the previously disclosed delayed recovery of the amounts withheld by the DISCOMS at the Gujarat plant, the Company has withheld GBP3.9 million of quarterly interest payments due in respect of the period ended 30 September 2017 on OPGG's long term debt. This non-payment of interest enables OPGG to enter the Corrective Action Plan ("CAP") process set out by the Reserve Bank of India ("RBI") circular)(1) .

The CAP process is well established and is designed to assist borrowers in the rescheduling and/or restructuring of its long term loans. In light of the recent reaffirmation of OPGG's Group Captive status the Board anticipates that the outcome of the CAP process should enable OPGG to better match the cash flows from the Gujarat plant with its debt obligations and to facilitate OPGG's self-sufficiency.

[1] RBI's MASTER CIRCULAR - PRUDENTIAL NORMS ON INCOME RECOGNITION, ASSET CLASSIFICATION AND PROVISIONING PERTAINING TO ADVANCES (RBI/2015-16/101 DBR.No.BP.BC.2/21.04.048/2015-16, July 1, 2015 (




I have been in and out of investing in opg since its very early days when it had less than 20 mw of output - I have seen the share price fall as low as 11p and rise beyond 110p.
Operationally OPG have managed to achieve what they set out to do.

One thing, however, that has always struck me is that opg management have always managed news flow really badly and have almost without exception over promised and under delivered.


Yes a lot of these issues are not necessarily of their own making - eg high coal costs, but trust in management is at an all time low.

The projected business model and raison d'etre of the initial public listing are all but abandoned. The 'jam' tomorrow anticipated by many investors has not materialised.

OPG is not loved at all, but as the saying goes 'the darkest hour comes before the dawn'. With the right headwinds opg has the potential to reward investors at these levels. There is also some indication in the markets that investors are starting to seek out value.

Opg is far from being a lost cause, and 'value' will always 'out'. While significant risks still exist (IMHO), I sincerely hope for all on this bb that opg has bottomed and we are all able to enjoy the rewards of a sustained recovery.

jozo

[andycapp1] 12/2/2018 14:44

Believe you me it requires some effort!!

[turbocharge] 12/2/2018 14:08

'flowerhead', that's a nice way of expressing your opinion! It's good to see that people can avoid using bad language that seems to be spoiling some other threads that I'm trying to follow.

[andycapp1] 12/2/2018 12:47

So looks like if you bid flowerhead 19p, his 50 shares might be yours!! Go on I dare you, go 20p!!

[azalea] 12/2/2018 11:27

No, you obviously missed my earlier post. I, others along with Mr Gupta himself, are looking for more than the price he paid to purchase 4m+ in lieu of his div.

[jozo] 12/2/2018 11:16

Is that you running for the hills azalea with your 17% profit??

[dave4545] 12/2/2018 11:14

No follow through atm.

19.55-20.12p

I'm not selling that low, mm's would love all that stock back they sold higher on
Friday

[azalea] 12/2/2018 10:30

Yep. I suspect the buyer of 25k @ 17.50p at 16.26pm 6/2/(2 mins after the 100k buy at 17.50p), could be the same person who sold 25k @ 20.55p 16.09pm 9/2, making a 17% (£750) profit. The 100k buyer is sitting tight on his paper profit of £3k.

[jeffian] 12/2/2018 10:07

Crikey. Has someone made money here?!

[andycapp1] 12/2/2018 09:59

Azalea, I don't hate people making money at all. But at the very least I try to do some analysis of equities before I buy them. You just spout unending (and actually misleading and dangerous) rubbish. You'd be better off down at Ladbrokes, honestly you would.

[andycapp1] 11/2/2018 18:24

All true Goldy but the loss of equity at Gururat would be a huge blow as it also negates the captive plant status of which, personally, I have high hopes as it could add maybe £20m of EBITDA. To be fair I think Gururat is a way away from being that bad but certainly the "process" they have entered lends some uncertainty. Im not negative, just realistic. This thing has a tonne of debt relative to its market cap and whilst that might be non recourse losing your equity does somewhat remove your optionality on things getting better!! On cashflow, it is not great. The debt swallows most of it. That said if they get captive plant status and coal falls then petals will be raising from the cloudy skies and we might make some money!!

[dave4545] 11/2/2018 17:23

About right and all buys on Nex too but they only add up to 30k but if you take out the late 25k sale it was virtually all day of buying with no sales, the tiny sales were first thing before the price moved.

[azalea] 11/2/2018 16:42

according to Morningstar data, Friday's buy/sell trades were 266k/31k.

[dave4545] 11/2/2018 13:12

Reckon it will be out of the traps Monday morning, a large string of buys on Friday and one little shake on the bid on one 25k sale at 20.55p when there was prior a 60k premium buy at 21.25p along with others buys at 21p

[the original goldbug] 11/2/2018 10:41

Jozo - you are guilty of exaggerating the issues. The debt at Gujarat is non recourse so even if that plant goes belly up TN which has paid back 60% of its project debt would still be ok.

Also bear in mind that despite the headline loss cash flow is still positive given the amortisation.

FWIW I think the coal price fall has a much to do with the Chinese Winter coming to an end and coal companies being given permission to dig the stuff up again given the less pollution generated over the Spring and Summer months. We shall see of course but given coal is at a calorific premium of 30% or thereabouts to oil, we are ‘almost guaranteed’ a major correction in coal at least relative to the oil price.

Anyway,don’t shoot me if I’m wrong, but I hope this post gives a bit more balance to the mega pessimism of your post.

[azalea] 11/2/2018 10:08

jozo
You are either unaware or conveniently forgetting that between 11/2/13 and 10/11/14, the share price rose from 56.25p to 110.7p -bid price), a period during which investors had the opportunity to buy and take very significant profits. Similar profit taking opportunities were available until 6/7/15, @ 106p. Even if they did not, they could still have made notable profits as the price dropped to 56p 23/1/17. So few, if any can grumble. Interestingly those who recently bought on the 6/2, are now sitting on a paper profit of 17%. As is always the case, you pays your money and take your chances.

Let us also not forget that on 22/12//2017, Mr Gupta bought 4,714,129 share @ 26p in lieu of his div .

22/12/2017. Mr Warner Allen bought 290,000 shares @ 17p

[oldboffy1] 11/2/2018 09:22

Thanks turbocharge for the update. I hadn't taken a note of the holdings for the earlier period but knew that the institutions had been selling down.M & G is the only holder not to have reduced its holding apart from Arvind. If the Company pulls through the current period then it might become an opportunity for private investors. That will please Azalea!