Ripe for takeover now wind it up nice little gain to be had I reckon
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Ripe for takeover now wind it up nice little gain to be had I reckon
Can't see Zeta in NZO's top 20. Biggest shareholder of NZO is 'JPMorgan Chase Bank NA NZ Branch - NZCSD' who hold 16.6%
I think Peat means that over 20% of Zeta Resource's portfolio is in the form of NZO shares and or bonds/options... unless Zeta operate through JP Morgan assuming they are a nominee holder for Zeta (which would surprise me a bit).
Ref http://zetaresources.limited/portfolio/
Thanks Vaygor1, I see from their Annual report that they have $82m USD of gross assets and if NZO comprise 25% of them that makes it about $28m NZD of NZO shares. At todays price that makes it about 44m shares or about 13.5% give or take a few percent either way. (the gross assets figure was from the 2016 Annual and could have changed since then) Thanks for clearing that up.
Yes agree that they are not listed in the 20 Top Shareholders in the latest Annual Report
But that report also says
"According to the company’s records and Substantial Product Holding Notices previously released to NZX, as at 30 June 2016, the only substantial productholder in the company was Zeta Energy Pte Ltd with a relevant interest in 67,605,896 Listed Ordinary Shares or 20.12% of the total number of Listed Ordinary Shares"
So if anyone wants to explain that apparent contradiction, I'm all ears.
Don't confuse Top 20 Shareholders list with Substantial Shareholders notices. The explanation probably lies in the fact that Zeta Energy's shares are held in various nominee ( shareholder) names. The "Top 20" merely records where shares are registered.
That does not make sense either because if they got over 20% would that not have triggered a take over?
macduffy, thanks, that makes a lot of sense, a lot of different holdings all over the show... good obfuscation :)
Either way though this does make NZO a difficult take over target as there is a potential huge blocking stake.... or Zeta would have to be the one doing the takeover... how much cash do they have floating around?
Interesting Peat.
Seems a bit weird doesn't it. Almost as if Zeta was accidentally left off the Annual Report's top 20 shareholders list.
Zeta not holding via JP Morgan Chase Bank by the looks as they get a separate mention in the Annual Report just after your quote.
I'll look into it.
Please provide more info on this too if it comes to light. I'll do the same.
It appears it was Zeta that sold a large number of their shares (circa 15 million?) in the 40 million share NZO buyback that took place from 13-16 September last year. As such Zeta's actual holding went down by 15 million (although the 15 million could have been sold over time before the buyback I suppose) yet their percentage ownership went up due to the reduction in 40 million issues shares.
Ref https://www.nzx.com/companies/NZO/announcements/290082
Note Mr D Saville, NZO Director since November 2014 is also a director of Zeta Energy Pte Limited who is the registered holder (and a subsidiary of Zeta Resources).
Disc: Holding NZO
Tui sold by NZO!!
Possibly, but I doubt it in this case MacDuffy as Zeta don't hold via the biggest on the list or so it appears (JP Morgan at 16%) and the 2nd on the list holds only 5%.
A few but not many shareholders on the top 20 are nominee entity just looking at them and the 20th shareholder (ACC) only owns 0.5%
Just seems a stretch for Zeta to get to a 21.2% holding as per their last SSH notice on 30 September. https://www.nzx.com/companies/NZO/announcements/290082
Happy to be corrected/clarified of course.
Looks like NZO is out of the oil and gas business. Just need to sell the office then cash up?
PPP has the whole story of TUI sale better explained. There they show that PPP will pay money and transfer assets. Best is that they show the 15 million of shut down cost set aside can now go back on books as profit. Well that is how I read it.
So how much did NZO set aside for closes down expenses. I can not see this figure. Anyone know or do I have to ask the company?
1.548 million (for Tui) as per annual report 2016 balance sheet
Attachment 8682
Makes me think of Amy Winehouse. (I dont wanna go to rehab)
Indeed
Attachment 8683
but given the notes specifically linked the current liability with Tui I didnt mention that ;+)
I got out at 64 cents nearly exactly 3 months ago, it was a loss, but quite happy as the share price has barely been above that since
Still watching NZO to see 'how things pan out'. What worries me is that they make no mention of returning all cash to share holders asap, rather returning some (maybe) and looking out for 'great investment opportunities'... they have sold off their best, most efficient, most well known, and most effective assets and now want to try buy something else? They had tonnes of cash a year or so ago and instead of buying up good value assets at Briscoe style sale prices... they decided to focus on a share buy back... here we are today and oil prices are stabilizing (increasing?) and they've just sold them all off, at questionable valuations... doesn't give me alot of hope they will handle this 'new found' cash terrible well, other than buy a few more friday night drinks, and maybe get a new company car or two.
What worries me is that they make no mention of returning all cash to share holders asap, rather returning some (maybe)
I probably shouldn't have included the maybe, the rest of the statement remains true.
ie they have not said they will wind up the company, and they have not hinted any details on how they plan to move forward, other than "looking for opportunities to deploy our cash by acquiring new producing assets with a preference for gas in markets we understand"... huge uncertainty, with both finalized/total cents per share return and how/if they will continue - at least, this is how I see/saw it, and hence promptly sold
Maybe they will issue a new load of shares to take on an "opportunity" (unlikely, I know, but you'd think if it was too good to pass, and they still wanted to give $100m back, then a new issue of capital could be a possibility)
Was on the cards (with a bit of hindsight) when you read this 14-Dec-2016 article:
http://www.nzherald.co.nz/business/n...ectid=11766773
Wouldn't surprise me if Tamarind's Tui purchases off AWE and NZO were somehow conditional on each other.
77 million is huge for sure. if not for TUI what else would they need provision for . What about cUE when it eventually winds up. PIKE and Kupe are gone. Do we have any other possible lilabilites needing covering?
So again not enought has been said about where we stand with this TUI sale.
[QUOTE=trader_jackson;655131][COLOR=#333333][I]What worries me is that they make no mention of returning all cash to share holders asap, rather returning some (maybe)
Hi Jackson,
could not have summarized it better, also think the MAYBE still appropriate. [ time will tell ]
What is unbelievable that it should take 5 months to sort out the return of 100 mil. in their possession since beginning of 2017 to S/Hs.
Yes i know when this Genesis deal first came up there was some uncertainty regarding tax.
So same old scenario, management more than happy to la di da along, while the easy earned money keeps rolling in
I think I have figured out their next moves... a four (actually five or six) step plan:
- Divorce Cristina.
- Get their blood pressure sorted.
- Get into apparel... a label with vanity.
- Purchase 2 x sailing ships and run them ashore with spirit.
... add in a trip from Sierra Morena to Huelva possibly?
[QUOTE=fabs;655190] I voted against the sale of KUPE. To me it was obvious that it would take a long time to return this 100 million to shareholders. For those wanting the deal to go through it was better to focus shareholder attention on the 100 million than on the the almost nil likelyhood that IRD would let it go without tax. So now we will wait. Maybe NZO will later say that by event outside their control [IRD}the return would unfortunatly take a little longer than end of may 2017. But we should have all known this before the vote with the outcome being 88% against instead of 88% in favor.
Anyone betting on full takeover of Cue?
It could well be a possibility TJ. Stranger things have happened at sea.
I noted in December 2016, the language the NZO was using in their NZX announcements was that they intended to give back the $100M.
Then in January 2017, the language changed to them stating they will give back the $100M.
So from here on in, depending on how things pan out for NZO and how much money the Directors will want or need to put into a new venture, they may well lay out to all shareholders a (soon to be finanlised and rubber stamped) deal regarding new developments and partners, and ask by way of a special resolution to keep all or some of the money. If the shareholders can see the benefits (assuming they are compelling and clear) of leaving the money in the company then the special resolution will pass.
If the above scenario is not possible (due to my naivety on this front), please let me know.
Theres still $168 million available once shareholders have been paid out so cash of about 60c per share. I'm picking they will go xd and recover quite a bit of the dividend quite quickly.
Well Digger,
i was also against it, but even if they gave out such info to S/Hs in general dont,t for a moment think the outcome would have been different, percentage wise a little may be but not overall.
I am sure the major S/Hs [ Institutions etc. ] got far more details plus future plans, to make their call.
Hope i am wrong but that's my take.
NZOs management for years now only in it for keeping money flowing into their pockets for doing little, also to stay on good terms with big investors. believe the term staying on the GRAVY TRAIN applies here.
Gee.. dead silence on the thread despite a price-sensitive announcement today.
I think the announcement is of major significance.
https://www.nzx.com/companies/NZO/announcements/297094
From the announcement;
"If all three horizons were developed simultaneously, a gas-to-shore LNG project is considered the most likely model. It could yield 8.2 tcf of raw gas, of which 4.8 tcf could be available for conversion to LNG"
Tell'm he's dreaming. Given the lead time on such projects our children will be wealthy. That's if the gas is actually there.
Boop boop de do
Marilyn
Potentially bigger than I ever hoped-a massive gas field with large amounts valuable condensate.
The thrill will be in the drill.
Around $20 million us per drill to this depth.
Potential returns in billions
sounds like if drill is successful unmanned platform and pipes to shore processing including lpg.
SP only moved about 2% so far
I think $20 million is light.... but any-which-way, NZO have a 50% share in the Basque field with Australian Beach Energy owning the other half.
NZO Market Cap at NZ$0.65 is NZ$207 million.
Just counting the risk-free low hanging fruit in 1 only of the 3 layers, NZO is sitting on 375 million barrels of oil (forget the gas for now, which is huge).
At US$60 per barrel, however one wants to break it up, perhaps with farm-in partners/risk sharing/diluting their holding etc etc, if NZO's can make US$0.50 per barrel on their current holding of 375 million barrels, that equals NZ$255 million profit ... more than today's market cap.
This has been a long time coming and in NZO's words the negotiations are in an advanced stage.
16 Dec 2016 NZO announcement on the NZX re new CEO Andrew Jeffries.
(Ref https://www.nzx.com/companies/NZO/announcements/294485 )
"Talks are advanced with potential partners in our major deep water exploration interests off Canterbury".
17-May-2013 article about NZOG and Barque field in the Canterbury basin:
http://www.offshore-mag.com/articles...in-permit.html
30-July-2015 article about NZOG and the Barque field:
http://www.stuff.co.nz/business/indu...d-gas-prospect
14-Oct-2016 NBR article re Barque and a brief mention of a prospect off Western Australia that BP and Cue energy bought 80% of. NZOG now owns the controlling interest in Cue.
https://www.nbr.co.nz/article/nzog-g...spect-b-195489
Beach Energy Website. Brief info on NZ interests incl Barque field
Beach Energy owns Beach Petroleum (NZ) Pty Limited from whom NZOG bought their 50% of the Clipper prospect (containing Barque). Other 50% is owned directly by Beach Energy:
http://www.beachenergy.com.au/irm/co...d.aspx?RID=273
Regarding part of my cryptic post last weekend:
- Get into apparel... a label Canterbury with vanity. Basin
- Purchase 2 x sailing ships Clipper and Barsque and run them ashore Beach with spirit. Energy
... just having a bit of fun. I like crosswords. :D
Marilyn Monroe's post below makes a point that is definitely worth thinking about, however in this case I believe the timing to get this moving is a lot closer given:
- the very long lead-up time till now (over 4 years)
- NZO's very definite and recent change in focus
- the scale of this undertaking together with the fact it's election year.
- a farm-in partner (Woodside, Shell, etc) would bring in the expertise, and the cashflow.
$ 20million US dollars per drill and maybe 5 drills equals $100 million us.
If a farm in partner buys 50%-1/2 from beach and 1/2 from nzo maybe little cost to nzo in the drilling stages
This is potentially a big field in world terms.
Profit could be in billions in best case scenario
Well here is my thoughts on what might be going to happen. Remember it is just a figment of my imagination and maybe should be just read for light intertainment .
We know there was some thoughts about getting 100 million back to shareholders.There has never been in my mind a dog show of that all being capital return. The tax man will want their cut. After all even the NZO team said it was too good a profit to go past. profit means tax.this is the first and a given to what I think might happen.
So up to now we know that NZO has been chasing gas rather than oil and in a call I made to the company some months ago they confirmed this as well as in some of their new releases.
If the 100 million is to be taxed my thinking is that NZO might offer shareholders the choice of taking their money or reinvesting with the company at a good premium over taking the cash. Did anyone quickly see that a reinvestment under this scheme would be very advantage to Zeta who would then be able to slip past the takeover code and again lift their % shareholding
Note this is just my idle brain talking and not a recomendation to buy or sell the company.
Well as usual the rampers will come out of the woodwork.
On paper and depending on ones limitless imagination, one can unreservedly aggre this MAY BE a marvelous developement.
However like in previous similar occasions Hochstetter, Pike River sanity returns usualy very quick, nothing wrong with the Drill & thrill that we all are presumably in this Co for of course.
Fish to his credit is not far off with his take on his TIME LINE, coinsidering a few realety checks like Availabilety of Drilling Rig supposed to be drilling this year, wich NZOG btw.rates success at 10-20% idealy if nzo retains about 20% == drilling cost would be 30 -40 mil. [est. some years ago total 120 mil.+ } not big considering what they been sitting on at the moment for some years. Deffenitely WELCOME ACTION promised over a long time now. Good thing here is that the they can drill through the 3 Sections in one go.
If the find should be as big as claimed, developing costs could be billions.
Facture in a more than 50/50 chance of a Green led Labour govt. in for 1-2 terms with no J. Key arround, so give your Imagination free range on any time line.
Btw. Should NZOs share be indeed 250 odd barels the mil. of $ profit would take quite some time, but yes POO could of course subst.rise over such a period as an added bonus.
Some investers may very well have been aware of Yesterdays Details well bevore the voting on Kupe & Tui. There is a word for this wich at moment slipped my mind [ grin ]
[QUOTE=fabs;656325]Well as usual the rampers will come out of the woodwork.
On paper and depending on ones limitless imagination, one can unreservedly aggre this MAY BE a marvelous developement.
Not intending to ramp-current sp is irrelevant to me as I sold most of my shareholding in the 55 cent offer and what a mistake that has turned out to be!
Just wanted to hear others thoughts.
Thanks for yours and others.
Yes this is still early stages and could be years -at least 3 and probably more before production but drill hopefully next summer-but will be within 3 years as per permit extension terms.
A successful drill would really push the sp.
I sincerely trust you are not including me in your term 'rampers' fabs.
And I further trust you are not insinuating I had inside knowledge, especially given my posted web-links forming the basis of my prediction.
If so, in both cases you or anyone else would be very wrong. There is a word for these kind of people which does not escape my mind.
All the articles and announcements linked to were issued to the public starting from about 4 years ago.
I hope they're not slouching - as well.Quote:
Spelling was atrocious as well
(Apologies to Enid Blyton, I think?)
;)
VYGOR1
Re; 'rampers','insiders' & 'knockers' { the none gender specific }
1/ Yes a generalization, the only ones possibly taking umbrage would the ones it applies to.
2/ Well had only entities of the top 20 S/Hs in mind, so if you are in that category but if innocent of my 'insinuations'.
Accept My unreserved apologies please.
3/Don't know where to go with that.
Would have actually been happier if someone responded positive /negative to the points raised in that missive.
CHEERS
For a perspective on the time challenges and costs of establishing an offshore LNG production go onto YouTube and do a search using the terms 'shell' and 'prelude'.
Boop boop de do
Marilyn
Hope they have not forgotten to put out their half year report. Running out of time.....
(I note last year it was also on the last day in Feb, but it was at 9AM.)
Not forgotten BC, but just not much to get excited about........
New Zealand Oil & Gas Half Year Result
8:30am, 1 Mar 2017 | HALFYR
The last eight months have been a time of transformation for New Zealand Oil & Gas as the Company successfully sold its two major producing assets.
Half-year accounts released today do not include the profit on the sale of the company’s interest in the Kupe gas field, which was sold for $168 million, nor the disposal of its interest in the Tui oil field.
Both transactions were completed with an effective date of 1 January 2017 and therefore the full-year financials will give a more appropriate picture of the 2016-17 financial position. In particular, net tangible assets will materially change.
Corporate costs are now considerably reduced. Overheads in the six months to 31 December were down by $2 million compared to the previous year, despite the inclusion of one-off costs for restructuring at Cue and $0.5 million in costs from the sale of Kupe. Exploration expenses in the six months were $4.0 million, down from $9.4 million in the previous year. Capital spending on oil and gas assets was $3.0 million, down from $7.7 million.
New Zealand Oil & Gas recorded a cash surplus from operations of $13.2 million in the six months to 31 December 2016.
Chairman Rodger Finlay says cash flows received by New Zealand Oil & Gas were strong during the past six months.
“In the twelve months to 24 February 2017, as New Zealand Oil & Gas realised value from its assets and focused on reducing its overheads, its share price increased by 49.43 per cent. This was one of the best share price performances last year among NZX companies with a market capitalisation in excess of $150 million.
“In addition, shareholders received a fully imputed 4 cents per share dividend in October.”
A net loss of $25.4 million in the six months to 31 December 2016 was principally due to Cue's impairment of its Maari asset ($7.7m); a loss of $2 million on Cue's sale of its loss-making Pine Mills field in the United States; lower receipts from the Tui field due to production decline; production outages at Kupe and Maari; and $9.5 million associated with de-recognition of deferred tax assets related to Tui and Kupe.
Chief executive Andrew Jefferies says New Zealand Oil & Gas is entering a new stage of its life following the sale of its two major assets.
"We achieved incremental value for our legacy assets and now have a lower cost structure in the business including a reduced executive team and lower corporate rental overhead.
“Progress will be more obvious in our full year accounts, which will include the impact of returning $100 million of capital to shareholders in May.
“Growth will be achieved by deploying our remaining cash to acquire quality assets at a scale, risk-profile and price that suit our size.
“In addition, in New Zealand, we are participating in two potentially transformational deepwater prospects off the South Island, including the Barque prospect that we estimate could hold 11 trillion cubic feet of gas and 1.5 billion barrels of oil or gas condensate liquid (best estimate, unrisked, in place across three horizons). This prospect alone could transform the national economy if it is successfully drilled with partners to help share drilling costs," Andrew Jefferies said.
New Zealand Oil & Gas is now seeking initial orders from the High Court
to implement the scheme. The scheme of arrangement will involve cancelling one
out of every two ordinary shares for a payment of NZ$0.62724388 per
cancelled share. Part-paid shares that have been issued as part of the
company's Employee Share Ownership Plan will not participate in the return of
capital."
By my crude accounting there's at least that value in the company in cash. Whats the general outcome for share price when this sort of thing happens? Seems to me there is no value placed on current assets... FYI am a newbee so may not have a clue what I'm talking about...
That's simple enough.
Though that's essentially valuing the company at $200m. They have that in cash let alone stock and assets. I would think that if you’re buying/cancelling half my asset, you'd pay me for half my asset. No?
Seems to me like the shortfall is expected to be made up by share price gains. Share price and asset value are different things...
How is that valuing the company at $200m? Or were you replying to Banksie?
No very simply they are cancelling x amount of shares and giving $100m in the process. Nothing to do with valuing the company in my opinion. Just keeping it tidy and simple by cancelling half the shares.
But for what its worth, the market is currently valuing the company at $200m so it makes sense too. (SP of 63 cents *319m shares = $200m)
My view:
Today the company values itself at 200m (319m shares x 0.627cps)
Company initiates buyback at 0.627cps and cancels 159.5m shares.
After buyback company value of 100m (159.5m shares x 0.627cps)
I see that all this is doing is reducing liquidity in the market of NZO with no apparent benefit to shareholders.
Am I wrong ?
I think the company values itself more than $200m (off the balance sheet). Its the market that values it at $200m.
Liquidity stays the same although no benefit to shareholders. Although no detriment either. Better than paying the $100m as a dividend though.. surely?
The company has been banging on for years about how the market is undervaluing the share price. This was the opportunity for them to say "our company is worth 300m (or whatever), here is your 50% of the company value".
What they have done is said "OK, if the market believes we are only worth 200m, then we will buyback half the shares at that price."
The effectively kills the market for NZO until the share cancellation is complete. And only after that does the share price have an opportunity to relevel to its supposed 'real' value. And if it does do that:
Company:1 Shareholders:0
I don't see this a returning 100m to shareholders, I see this as a capped, enforced buyback.
Perhaps I'm making this up, but that's how I see it.
Exactly. To align with company 'worth' they should only be cancelling 1/3 of the shares. 'Capped, enforced buy back' sums it up nicely. Not that that is a bad thing so long as the market views the reamaining shares at 30% more than it does currently... On market buyback would be a better way forward from my perspective.
Okay let me put my bias out there right from the start and say that the only people that have done really well out of NZO over the last thirty plus years are the employees and directors. Over the long run relative to the NZX50 this company has been a truly appalling investment.Quote:
Part-paid shares that have been issued as part of the
company's Employee Share Ownership Plan will not participate in the return of
capital."
Now moving on, its clear you guys have missed this major point. This arrangement is ostensibly to benefit owners or the partly paid shares as any possible intrinsic value the market is presently not recognizing carries forward and materially benefits those with partly paid shares. Yes it is better than a dividend, they wouldn't have sufficient imputation credits to fully impute such a large dividend but again this is ostensibly an arrangement that benefits management and directors with partly paid shares as any unrecognized intrinsic value is doubled on a per share basis going forward given the 2:1 share consolidation. Its designed to bolster the SP going forward and as future potential partly paid shares when they may be fully paid will have more of a relative dilution effect management end up with double the bang for their buck with their already lucrative employee share scheme...management are the real winners...again !
Stripping $100m out of the company in cash is a dumb idea. Removes critical mass...really I see this as a losing situation for shareholders.
Disc: I don't think much has really changed from the Tony Radford days.
Again we see NZO management / directors acting in their own best interests...that's something "new" isn't it.
That's my 3 cents, sorry guys can't be bothered debating this pup...just posted because I have some technical knowledge of how these sort of proposed capital returns work.
IRD binding ruling approval is almost certain in my opinion. GLTAH
Have read comments from the last day several times.Who voted for selling KUPE anyways and were you informed beforehand that the 100 million return was to take this shape. Does not suprize me. Of all comments Roger has hit the nail square on the head with the huge advantage to unlisted partly paid shares.The exercise price to be fair should be lifted about 39% to reflect the true underlying value of NZO other non cash assets. That to me is the biggest proof of managements serving management.
Cancelling half my shares to me is neither here or there as my % holding in the company stays the same.
Quote:
27. Share-based payments The Group operates an Employee Share Ownership Plan (ESOP) which is open to nominated employees. Under the plan there are currently 9.5 million partly paid shares for which employees have paid $0.01 per share. After 2 years, and under certain conditions, the employee has the option to fully pay for the shares. This option lasts for 3 years. The cost of the ESOP to the Group is calculated using the Black Scholes option pricing model and in the year ended June 2016 $0.09 million was expensed through the Consolidated Statement of Comprehensive Income. A total of 2.3 million shares were awarded, 0.2 million shares vested during the year at an average cost of $0.45 per share, expired shares totalling 0.5 million were sold and 0.1 million shares were forfeited.
Couldn't resist posting a couple of excerpts from the 2016 annual report.Quote:
Kupe has outstanding growth opportunities.
Hello Sharetraders.
Thanks for your comments. Eveeryone's entitled to a view - but you might consider that the NZO share price increased by 49% from Feb 16 to feb 17, and that was one of the strongest performance son the NZX among the companies that started with a mar cap over $150 million.
We will arrange for CEO Andrew Jefferies to join you in here for a Q+A after the Notice of Meeting is published later this month.
Couple of quick point to answer comments so far: Employee Share Options Scheme shares do not participate in the capital return - even the partly paid up shares do not participate. Since ESOP shares are issued at a premium of 20% to the current share price, most are not in the money; when they are sold, the employee gets back only the amount they have paid up. The capital return should not change the share price, as the proportion of shares issued to capital of the company remains constant. Therefore, while holders of ESOP shares are treated differently as a class, they should not be either advantaged or disadvantaged overall.
Some of you have expressed a view about the share price as a proportion of the company's NAV. The price paid for the cancelled shares has been set as a proportion of the market cap to the current number of shares on issue. It doesn't reflect NAV, except indirectly to the extent that the market cap reflects NAV.
The capital return is good capital management. The share price increased strongly when the return was announced, from under 50c to around 63c the day the Kupe transaction was announced. The stock continues to trade a discount to NAV - so the capital return allows you to capture 100% of NAV, without that discount over that part of the NAV returned, therefore creating a more efficient balance sheet.
I encourage you to continue to seek more information on this capital return. It's important to vote, and remember a 75% majority is required to approve the return.
If you have queries about how the capital return will work, you are welcome to call me on 021 570 872, preferably while I'm at home having my dinner ;-)
All the best
John Pagani
New Zealand Oil & Gas
Thank you John,
I suspect everyone is gobsmacked
The truth is so important
The attempt to brand the company as acting against the interests of ordinary shareholders was probably ignorance rather than malice.
Its so easy in hindsight to blame-its the nature of people
A lot of shareholders lost a lot of money investing tax-paid funds into the company at $1.50
You have a good plan to return capital that will not be taxed and I certainly will be voting for it
At what point are the ESOP shares issued? I'm assuming they are issued upon part payment of the share? Which would mean the 20% premium on current share price is in fact 'current share price at time of issue'.
Which is neither here nor there if half of the ESOP shares are also cancelled after the capital return. If they are not however, then that would be a different story given that the market share value instead of NAV value is being used.
Caveat 1: I'm New (to posting on this forum at least!)
Caveat 2: I invest for fun (ish) and don't take bad results to heart (too much)
Caveat 3: I rarely know what I'm talking about on a good day
But I invested in nzo as I felt they were undervalued. Possibly are still. Possibly not.
Following the kupe sale announcement in november the share price has fluctuated between 61-65c. I could have sold 50% of my holding for up to 65c but chose not to.
Today it is suggested that I will be selling 50% of my investment for 62.7c/share.
Had I have known this earlier I would have cashed out and put my money to better use.
As per caveat 2 I play for fun. But the sense of fun is absent when I am told I am selling 50% of my shares for a price determined by others that I disagree with (I wouldn't still be here if I thought 62.7 was a good sell price)
But at least there is a vote.
Kay you have a great attitude that I wish I could emulate.
A capital return by giving you 62.7 cents tax-free for every 2 shares you own is tax-efficient-ie no tax compared to a dividend.
Each share entitles you to a small share in the company..You will still own exactly the same share of the company after the capital return.
I bought a lot of shares at 61.5 cents today because I like the way they are doing it.
I do not like paying more tax than I should.
I like buying shares when I think they are under-valued.
NZO shares are high risk but unlike most other companies we invest in they hold a lot of money that is earning zilch so less risk involved if they return capital to us
I don't know what the fuss is about still get about 30c per held share and when they cancel the shares you will hold half number of shares but price should stay the same. Market cap will then be about 100 million and they will hold about 168 million cash plus misc holdings, seems like value to me?
I enjoy the risk (calculated and affordable risks!). And I feel a decision to sell should be my own. If it's forced upon me then it should be favourable to me. I don't see 62.7c as favourable.
I don't want to sell 50% of my holding for 62.7c. If I did I would have done it already.
I guess I can't overly complain. It's technically fair. But investing is risk and 50% of my risk has been taken away! I might as well pop into anz (or others) and put my money in a term investment!
The capital return of $100m was signalled quite a while ago. So why did you not sell when this was announced? The 62.7 cents they came up with today is immaterial. The company is going to lose $100m, half the shares are going to be gone. Alternatively they could have said that they would do it by selling a third of the shares at $1. However then your shares post capital repayment are going to be worth a lot less then they are under the current scenario. I would not be too hung up about the figure contrived at for the capital repayment.
Because if the stock is undervalued, it will be just as undervalued after the capital return (or the selling of half your stock as you put it).
I hear your point!
I guess I am naively looking at this from a total money invested perspective rather than looking at the percentage of company etc. And if nzo have no use for $100m then maybe best returned.
And i guess I can simply rectify my money invested by purchasing the value of half my stock for 62.7c or under (or capital return as you put it). And it's business as usual and I can go back to reading this forum rather than writing!
No please do keep contributing. I was not trying to be critical, just trying to help. I bought for the same reason (a small enough parcel). Not that I am a shill for NZO, I note they have made plenty of mistakes in the past and the jury is still out. I think that they are worth about 75 cents currently so there is a discount in the market. That discount will naturally be amplified post capital return but if the market does not realise the discount now, they are unlikely to post capital repayment.
I'm with you Tim. They are doing more or less what I expected to return the 100Mil to us all in a tax effective way. And I will be voting for it.
What we are all grappling with I suspect is what will the value of the company be once the transaction has occurred ? That is the big question in my mind and I'm not sure how to figure out the answer...other than to simply wait and see how it plays out.
Disc: very very very long time shareholder.
Because if the stock is undervalued, it will be just as undervalued after the capital return (or the selling of half your stock as you put it).[/QUOTE]
Blackcap could you please respond about this line you wrote.As I see it it will be twice as undervalued per share as it was before the 50% cancellation.And it is this point that I think the market is letting it slip under the radar. If as some do think the current value should be 90 cents it is 30 cents undervalued. After the cancellation this 30 cent per share now must become 60 cents to cover the non cash element of the company.
So after the 50% cancellation the remaining shares the share value will go from current 90 to 1-22.Naturally if you say the current undervaluation is only 10 cents then the after valuation will be 82 cents. Again it is this very point that is important as immediately after the 50% cancellation the company will be ripe for a very cheap TO at say 62 cents which will cost our major shareholder very little as most of the money will have just come in from NZO own account.
Yes you are right digger... shhhh, don't tell anybody. :)
Exactly it will be twice as undervalued after the CR. What I was meaning was that if the market undervalues it pre it will probably also undervalue it post capital repayment. My terminology was incorrect, granted, I should have said.. more undervalued post capital return.
Yes you are right in that if you think NZO is worth $242million (which I think it is worth) on 319 million shares then right now the shares should be trading at 76 cents.
Post capital return NZO is then worth $142million but only on 160 million shares or 88 cents per share :) happy days.
However the market is currently valueing NZO at $200m and thus after the capital return of $100m, I do not see the market valuing NZO any differently than now, so after the CR the market will probably value NZO at $100m or 62.5 cents per share give or take a cent or two.
Hi John,
Appreciate the posting - think more companies could do well to make the occasional post. Hope you enjoyed your dinner last night.
Just in terms of your first comment, one can select any dates and make things look good. Many of the posters on this forum are long-term holders, and depending on when they bought etc would still be below water. Graph below - nowhere near the top performer of the NZX over the years regardless of market cap!
I view NZO as a learning experience......one which I should have exited more of my holding some time ago. ;)
Cheers
SSB
Attachment 8734
I'm not sure there is a fuss either. My query was to try and get a feel from those more experienced than I of where the value of the company would be after the transaction. My only experience so far with this sort of thing was with Tenon where they clearly stated
The reality is that post Bluewolf the remaining shares are likely to be sold for $2.12.Quote:
Grant Samuel is preparing a valuation report for Tenon shareholders, which shows a value range of NZ$3.01 - NZ$3.25 per Tenon share assuming completion of the Blue Wolf offer
Hence my query. So thank you Blackcap and Digger for your last two posts...
I do have a query regarding the ESOP shares. They are not part in the capital return (which i think is fair enough in terms of the part paid ones) but do they get cancelled as per the ordinary shares? As I see it, if they are not then effectively, while ordinary shareholders % holding in the company remains the same after the cancellation, the ESOP shares would double their % holding. If NAV and Market were that same then neither here nor there. If not then those ESOP shares are effectively increasing their stakehold at a discounted rate are they not?
TO has been used as a rallying point on NZO since time memorial - and with no consequential benefit, save to entrench the bunch of no hopers and misfits directors and management through decades of squander and wealth destruction.
So pays to leave that aside and review what happens after the CR.
NZO post CR is effectively a shell with costs - Zeta has recouped most of the capital/funds/losses buying into NZO and they have not covered themselves with glory (more like gory).
Seems to me that Zeta will continue to milk fees from NZO until time infinite and there will be nothing the disparate bunch of remnants shareholders can do about it. The institutions saw the light and left the building a long time ago.
John Pagani
After the 100 million capital return and the sale of TUI [settlement] and any other cash settlements,what will be the expected cash available to NZOG accounts? Only interested in the cash do not give values for other assets.
Anyone notice the Cushings filed SSH notice a few weeks back - maybe they can see a short term value play. Effectively a cash box now with Cue holding for nothing plus other permits, I'm probably going to invest my buyback $ back in the company.
digger it will be about $160-170m
If that turns out to be correct that means that after we all lose one half of our shares the remaining shares will be backed by a dollar a share on cash only. This is the point I am trying to make where as some of you posters think it is only 62.5 cents.
The company after this 100 million return and 1/2 shares removed will be very ripe for TO.
TO of a cash vehicle?
Zeta has already done that - control the company with less than 50% shareholding.
And with independent reports these days, no fly zones, etc - ain't no mileage to be made trying to takeover cash via a discounted cash offer. The independent directors can hardly recommend an offer of less cash for cash!
Here's the financial info you are looking for, which has just been sworn in court and released to NZX.
https://www.nzx.com/companies/NZO/announcements/298115
Just thought to check sp and see John P has announced the figure.
I make the NAV share after the capital return $1.20.
So have just bought heaps more-still a few left at 62 cents
Yes. Just been through the figures as well. This seems to good to be true. What am I missing ?
I have bought some more as well.
Might finally break even on NZOG ......yeah right.
There is nothing new here. You could have worked it out from the HY accounts. Remember current assets does not equal cash so it may appear as if there is more than there is. But it is consistent with the HY accounts.
From the HY accounts you have the cash figure. Remember the accounts are consolidated.. so about $22m of this is in Cue.
Nav of ordinary shareholders Pro forma per share currently 0.77. That effectively doesn’t really change their worth upon CR as to increase that figure to 0.91 (14c gain) said shareholder has cancelled ˝ their shares at 14c below NAV. So looks fancy but really even Shakin Stevens.
Given pre sale talk, share price was down in the 40's it'll be interesting to see if share price manages to increase from current levels. I can't see what would drive it...
Hi,
Not sure if someone can easily shed some light on my below query...But two glasses into my pinot noir and I feel compelled to ask. Again I am a novice investor who largely gambles on "growth" stocks with little success!. NZO are one of the few companies I have tried to understand.
But in nzo I see a company with money and assets which exceed the value of it's share price (I understand Nav to be a basic tool but I am basic in my understanding). This was the case prior to the kupe sale and why I invested in them on the first place. And I considered it a simple and easy decision to invest. Essentially I feel like I am buying money (possibly foolishly!).
I am a believer in the wisdom of crowds so I assume I am missing something. I purchased a few more at 61.5 yesterday to more than cover the capital return.
I would be grateful for any thoughts as to why nzo are valued at 62c when the nav suggests that they are worth more. And nzo's assets are real money and natural resources. Not a brandname or anything overly speculative.
Is it simply that they are assumed to make a loss for a number of years...oil prices won't recover?
Bad guess Kay.
I havnt spoken to digger for sometime-time flies-.
but its always informative to do so-I suspect he is holding onto more shares than everyone here combined and similarly Knows more than everyone here.
Money in the Bank if you have no intention of using it is better returned to shareholders
NZO potentially has a huge gas field-currently holding 50%.
They need to find another partner capable of drilling a deep well.In my opinion they have a good chance of finding a game changing world scale field-no one knows until it is drilled which will probably happen before this decade is over.
They might decide to sell their interest and wind up the company although i suspect they are honest and atm are looking for that big partner.
Plans can change and investing in nzo is much higher risk than the bank,
That risk will decrease after the capital return and remaning shares may be worth more
However there is no way that you will get much chance of a return with a bank-no more than capital invested plus interest minus inflation and minus tax