ENE 6.67% 28.0¢ enevis limited

Energy Developments - Time to buy?

  1. 3,567 Posts.
    Well what I can make of it the major shareholder NRG shareholder was creating an over hang on the stock as the market knew they wanted to sell.

    They sold their shares to 2 utility companies and ENE bought back the preference shares at $1.80. ENE also sold shares to the 2 new shareholders at $4.13 and cancelled the remaining shares with the effect of increasing EPS by 6.5%.

    Does this seem like good news to anyone else or is it just me?

    Also they announced that SWERF was inspected by a external party and they said it will work... here is the ann below.

    ASX Code: ENE
    Announcement: EDL Gains New Strategic Shareholders

    Date: 25 July 2002 - 17:35:27
    Market Sensitive: Yes

    ENERGY DEVELOPMENTS LIMITED 2002-07-25 ASX-SIGNAL-G

    HOMEX - Brisbane

    +++++++++++++++++++++++++
    EDL has today completed a transaction which has resulted in leading
    New Zealand-based energy asset managers, Infratil Limited and Orion
    New Zealand Ltd, becoming substantial shareholders in the company.

    Following the transaction Infratil and Orion will each own 11.5
    million shares, or 9.99% each of the Company's total ordinary shares.

    The transaction has resulted from the exit of NRG from its
    shareholding in EDL.

    The move is part of NRG Asia Pacific's previously announced
    withdrawal from the region as part of a major international asset
    divestment program to reduce debt and generally strengthen its
    balance sheet.

    The transaction has involved:

    * the sale of NRG's holding of 14.6 million EDL ordinary shares to
    Infratil and Orion, at a price of $3.30 per share;

    * the issue by EDL to Infratil and Orion of 8.3 million new ordinary
    shares at $4.13 per share; and

    * the buy-back by EDL of NRG's holding of 16.8 million EDL preference
    shares at a price of $1.80 per share.

    The purchase and proposed cancellation of NRG's preference shares
    results in a 6.8 percent increase in ownership of EDL for remaining
    shareholders in the Company, as well as a corresponding increase in
    earnings per share.

    EDL's Managing Director, Mr Paul Whiteman, said the Company was
    extremely pleased to have attracted two significant new investors
    with the regional expertise and relevant industry focus of Infratil
    and Orion.

    Infratil Limited has investments in a number of energy and other
    infrastructure assets including TrustPower, a major New Zealand
    electricity generator and retailer.

    Orion New Zealand manages the electricity network servicing
    Christchurch and surrounding areas and has investments in a number of
    other energy-related service and technology companies.

    "The two companies have wide experience in managing established and
    emerging energy assets in the region and EDL looks forward to a
    rewarding, long-term relationship with both parties," Mr Whiteman
    said.

    As a result of the transaction, NRG's two nominated directors on the
    EDL Board will be replaced by one director nominated each by Infratil
    and Orion under the terms of their shareholder agreements with the
    Company. A synopsis of the shareholder agreements is attached.

    The purchase of additional EDL shares by Infratil and Orion has
    raised approximately $34.5 million for the Company.

    As an integral part of this transaction, the majority of this raising
    has been used to fund the buy-back of the preference shares, leaving
    approximately $4 million to the Company for working capital.

    Mr Whiteman said the buy-back of NRG's preference shares was
    undertaken in accordance with the terms of the share subscription
    agreement entered into by the Company and NRG in 1997. The buy-back
    was approved by a special resolution of shareholders in September
    1997.

    He said the Company would now proceed to cancel the preference
    shares, resulting in EDL's total issued capital being reduced from
    123,389,487 shares to 114,960,387 shares.

    Infratil and Orion have been represented in the transaction by
    investment banker Morrison & Co.

    In the period leading up to the completion of the transaction,
    Morrison & Co have undertaken an intensive review to evaluate and
    verify public domain information relating to both the EDL's energy
    business and SWERF(R).

    As part of that process Morrisons engaged the Juniper organisation, a
    UK based technical specialist and market advisors to review the
    technical and commercial merits of the SWERF(R) process. As a result,
    Infratil has stated in its press release that it has "developed
    confidence that EDL has the ability to overcome the remaining
    challenges and that it will in time, be able to capture a profitable
    share of this market place."

    The table summarises the transaction.

    TRANSACTION SUMMARY

    NRG SHARE SALE

    Ordinary shares sold to Infratil 7,304,835 at $3.30 per share
    Ordinary shares sold to Orion 7,304,835 at $3.30 per share
    Preference shares sold to EDL 16,800,000 at $1.80 per share

    EDL PLACEMENT OF NEW EQUITY

    Ordinary shares issued to Infratil 4,185,450 at $4.13 per share
    Ordinary shares issued to Orion 4,185,450 at $4.13 per share

    Amount Raised by the Company $34,571,817
    Cost to buy-back preference shares $30,240,000
    Net amount raised by the Company $ 4,331,813

    Shares on issue prior to Transaction
    Ordinary shares 106,589,487
    Preference shares 16,800,000
    Total shares on issue 123,389,487

    Shares on issue post Transaction
    Ordinary shares 114,960,387
    Preference shares* 0
    Total shares on issue 114,960,387

    *following cancellation of the 16.8 million ex NRG preference shares.

    Summary of Key Terms of Shareholder Agreements entered into with
    Infratil Australia Limited and Orion No 2 Limited respectively (each
    an "Investor")

    FURTHER ACQUISITIONS

    With certain exceptions, the Investor (including its associates) may
    not increase its holdings beyond 9.999% of the issued capital, which
    limit is increased by 1% in each year following signing up to 14.99%.

    The exceptions include the ability for the Investor to buy further
    shares where a party not associated with the Investor acquires a
    relevant interest greater than 10% of the Company or a takeover bid
    is announced. Provision is also made for the Investor's holding to be
    increased with the approval of the Board or through participation in
    any capital raising by the Company.

    If the limit is breached, EDL may require the Investor to sell the
    excess shares on market within a specified period and, if it fails to
    do so, EDL may buy-back the excess shares at a discount of 5% to the
    market price. Shareholder approval will be sought to such a buy-back
    at the next EDL AGM.
 
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