Thanks Tumeric! Great news, just what I wanted to read this morning.
Printable View
Thankfully the American's have kicked the can down the road, (papered over the huge cracks in their system FOR NOW), so in the case of this float for people who are still deciding one way or the other, and taking into account the retail price cap this float appears to be an exception to the rule mate.
There's always the odd exception :) I've tried to like this float, I really have but the older I get the more I tend to take a five year minimum investment time horizon, I ask myself how is a company going to be positioned in five years time, where will the share price be ?
I guess we all have different investment objectives, some are chasing investment yield, I'm chasing growth, although am happy to take divvy's along the way. I think this will be a reasonable investment from a dividend yield perspective but capital gain when the price earnings ratio is already so heavily stretched, (as are power prices), will be very modest, if any.
I've been humming and harring about Meridian too Roger. The decision is not totally clear cut but I have come to the same conclusion as you. The tipping point came with Grant King's Chairman's (of Contact) speech at the Contact AGM on Tuesday. Now I've never heard a chairman stand up at at AGM and forecast a decrease in revenues, still haven't. But King all of did that at the Contact AGM, forecasting zero growth in revenue for several years. Translated that means a decrease. The supply/demand balance for energy in NZ is now on the side of supply. So to be smart energy company, you have to rely on managing costs. Are Meridian up to it?
To answer that question look at what Mighty River have done since becoming an SOE. Now 40% of their generation capacity is geothermal, unaffected by weather. There is one gas powered station in the portfolio, a back up should things get tight. And Mighty River have had a policy of purchasing the surplus energy they need in a declining overall energy demand pool - smart.
Now what have Meridian done since becoming an SOE? Built a few wind farms, OK but those have only about 1/3 the reliability of geothermal energy. Meridian have a policy of running some of their transformer's until they fail to cut costs - not a forward looking policy in my terms. And Meridian still clearly have excess generation capacity for their customer base, not so good if the overall market is static or declining. I don't think Meridian have done anything desperately 'wrong' as such. But they haven't seized the opportunity like Mighty River Power has.
Furthermore if the smelter winds down, Meridian's power generation is in the wrong part of the country. Those hydro assets have another political liability. Meridian will suffer most of the 'big five' under a Labour/Green single power buyer model, because they have the highest proportion of hydro assets in the generation portfolio.
Now we move onto the installment receipt concept. Some here have picked a Meridian total float price of $1.60, with as a result no discount for Mum and Dad investors with $1 down and 60c in 15 months time. With the American debt situation unsettling foreign buyers, I believe this may not be far from the mark. Installment receipts are notoriously volatile. The Labour/Green policy will reportedly drop the value of each MRP share by 70c according to one view. In installment receipt terms that means your installment receipt will drop from $1 to 30c. No I don't think that will happen. But I am almost certain that some time in the next fifteen moths, after a strong Labour/Green poll, the IR price will drop to 80c. It will probably be a brief fall at that price, but this is what I would be eyeing as my entry point. Even if the total float price is $1.80, with $1 deposit, by biding my time I should be able to buy in at $1.40 total if I get my IR timing right. I very much doubt the float price will be above $1.80, which means there is no hurry to get in on the ground floor of Meridian.
Now move onto the overall return. Meridian would yield around 8% gross, with a 10.5cps payout, the mismatch in the maths because such a dividend will only be partially imputed. Actual earnings per share are forecast to rise to 7.2cps in FY2015, which is equivalent to a 6.7% gross profit at $1.60. Not very exciting in a climate of rising interest rates. The magic of being able to pay out more of your than your earnings in dividends for several years is because of the depreciation policy and past upward revision of dam values in a 'mark to market exercise'. But ultimately this policy is not sustainable even if the ultimately bit could extend out a decade or more. I expected some explanation of this in the prospectus, but there is nothing mentioned on depreciation policy - a serious omission in my judgement.
In summary, I think those who apply for Meridian installment receipts will probably do OK, better than bank interest at least. But I can't see the value there, and there are more nimble power companies in the market. At $2.16 and offering fully imputed dividends and with a coherent cost reduction strategy, plus the promised capital return via buyback MRP looks both cheaper, better strategically placed, and better managed than MER at $1.60. In the head for head comparison, MER are ahead on dividend yield, thanks to the Installment Receipt structure only (financial engineering for float purposes). On every other metric MRP is better, including yield on a fully paid up comparison. I will be keeping my money with MRP.
SNOOPY
I have driven from Wanaka to Twizel today.
More and more huge irrigators.
Irrigation is growing,and has a lot more growing to do for a number of years yet in Otago,and Canterbury.
Meridian are situated to capture this growth.I think a lot of these irrigators use $50,000 of power a month.It would take our household 25 years to use what these irrigators use in one month.
Looks to me as though Meridian is "well positioned."
I do not have the figures.I read the out look for dairy farm and other irrigation uses in a prospectus issued by Tru-Test last December.I have since given away my Tru-Test file,so can not refer to it.So here goes from memory.About a 33% or 50% more than is in use at present.So growth is Huge.
These irrigators are more than a kilometre long.
Insties looking for a 1.50 to 1.55 price.
Although Meridian was a good business with some attractions, "I'm not too worried about what we get," said another fund manager. ''We've got plenty of opportunities in the sector. ''I find it fascinating in these processes, the hype trying to stampede you into action from a fear of missing out.''
http://tvnz.co.nz/business-news/low-...shares-5646861
The demarcation point between the generators equipment and Transpower equipment is on the upstream side of the transformers. So if a transformer flashes over Transpower fixes it and pays the costs.
I'm with you Snoopy I reckon MRP is a better bet. I like MRP's geothermal capacity especially as it is not affected by climatic conditions. Also it has better distribution, its factories(power stations) are close to the center of demand(Auckland). An electron energized 600 feet underground way down south in Fiordland will be puffed by the time it gets to Auckland.
Boop boop de do
Marilyn
Question chaps, if this trades at say a 0.10 cent premium day one, will it be at $1.10 or $1.70 assuming $1.60 is the final?
The installments are what will be traded and still have 60c payable on them to get the shares.
So a 10c premium would be $1.10.
You would buy at $1.10, pay 60c (assuming $1.60 issue price as the $1.60 cap only applies to those in on the IPO) in a years time for a total of $1.70.
Thanks CJ, I am Stagging this big time, $1.10 will work nicely, don't know if I would have the patience to hang around until the first div is paid.
Marilyn, I when I wrote what I did I was referring to page 86 in the Meridian prospectus, from which I quote below:
"The generator stators at the Waitaki power station are considered to be in imminent failure condition, but have been operating this way since 1992. A single non earth surge could affect more than one unit. Given the number of units there is spare generating capacity so a run to first unit failure mode has been adopted. Upon first failure the upgrade program for the generators will be initiated."
I wasn't very happy with that policy. If these units have been at imminent risk of failure for 20 years I would take one apart now and overhaul it. This would allow Meridian to see what was going on inside, and give a better insight into why the things just keep going. IMO there is a very real risk that all of these units could fail at once. I regard the declared maintenance program for these units as irresponsible.
Now getting onto the subject of transformers:
"The cooling oil in the transformers at Manapouri contains an anti-oxidising corrosive sulphur compound that is known to lead to the deposition of conductive copper sulphide on the winding insulation of the power transformers that may over time lead to transformer failure. This is an unquantifiable risk as there is uncertainty as to the level of deposition that may lead to transformer failure. Meridian has a programme to monitor the situation, replace the oil and continue monitoring the situation after the oil is replaced, in an effort to mitigate the risk of failure."
To me this reads as though Meridian is responsible for these transformers. I just wasn't happy reading this. If Manapouri is at risk of going down I would put a new transformer on site as a back up and have it ready to be hooked up as soon as the old transformer fails.
This whole section reads like maintenance by an accountant, being prepared to take any commercial risk to stretch out the life of equipment that really should be replaced, all in the interests of shoring up the float financially. Once you have a culture like this in a company I feel it will be difficult to eradicate.
SNOOPY
[QUOTE=Snoopy;434159]
"The generator stators at the Waitaki power station are considered to be in imminent failure condition, but have been operating this way since 1992. A single non earth surge could affect more than one unit. Given the number of units there is spare generating capacity so a run to first unit failure mode has been adopted. Upon first failure the upgrade program for the generators will be initiated."
Nice to see Meridian using common sense.
Must admit I agree with this policy.
[QUOTE=percy;434161]The policy is only sensible if there is sufficient lead time to fix the generator that fails before the others fail. If all of these generators are on a rotation cycle it is possible that all will fail together. The generators have been operating for 20 years in imminent failure condition. This alone suggests to me that Meridian don't know why they have kept going for so long, but have apparently been warned that they are in imminent failure condition and chosen to ignore that warning.
Perhaps the people charged with maintaining these generators don't have a full understanding of what is going on inside these generators either? The sure way to settle this is to take one apart and find out. If it all checks out, then the maintenance policy is wrong. If the maintenance policy is wrong it should be changed. If the service engineers are right though, that means Meridian has just been saved an unwelcome outage. Whatever the actual condition of those generators, the only sensible course of action is to pull one out of the loop, strip it down and check.
Whatever the actual condition of those turbines, I might be tempted to leave it if it were say a couple of years or even five years outside its design life. But these things have apparently been running on a knife edge for twenty years! I can't see how anyone could come to the conclusion that just leaving things be is good policy.
SNOOPY
I'm really not sure any of us have enough information to second guess the Meridian engineers and management.
Surely they will have done a professional job with a decent understanding of the risks. There are also probably external measurements they can do to be relatively confident that they are still running OK. Sounds like they were a good buy !
[QUOTE=Snoopy;434167]The statement is very clear;
"Given the number of units there is spare generating capacity so a run to first failure mode has been adopted.Upon the first failure the upgrade program for the generators will be initiated."
Seems to me they have been '"well prepared" for 20 years.
Excellent long term common sense.!
Guess how many people applied for shares
Yesterday when I applied for Meridian shares I got a number of MEL696771xx. Today 1 hour before closing I got another number of MEL697881xx. Does the numbers suggest there were about 110000 new applications just in one day?
I applied on thursday (after ****us deal settled) for me and miss, the money just gone this morning.hope no scale back.
one analyst suggested clients who applied through their broker were likely to be scaled down rather than people who bought through public pool. seems
blatantly unfair, they took my money about two weeks ago. could have got some through public pool if I had known this.
696765xx for me .. ordered on thursday - cash came out today.
Irrigation.
I have mentioned Tru-Test December 2012 prospectus where they stated they expected huge increases in the use of irrigation in the South Island over the next few years.
Further to this is the takeover of Synliat Farms where they state they will pay down debt and spend more capital on irrigation.
Also an article in The Christchurch Press Mainlander 19/10/2013, headed "Mackenzie Basin";"The Tekapo end of the basin is too cold.But a lot of the stuff that is on the southern side of the main road,should be made into productive land.Down to the stations at Haldon and Grays Hill at the top of Lake Benmore,there is a large area suitable for irrigation that is likely to be developers' next focus."
More irrigation= more big electricity users.Meridian are well placed to meet their growing demands.
Hi Turmeric..It might sound like I'm rushing to DB's defense but I think this situation would apply to all except the on line option.
I left my decision very late too (the US problem was not on my radar...MED is local not global and I waited to gauge the degree of local momentum)...
Wednesday 16th..knowing how the system works (sort of) I rang DB and asked them if it was too late to apply through them? As I was cutting it fine what was the best action to take..I knew the MED online option was OK with their one time direct Debt and DB person agreed this would be the best method to take now, and when asked he advised me that I couldn't do a one time direct debt from my DB trading account to MED...( I suspected that was the case when I asked that question)
I transferred money from my DB trading account on line to my specified bank account before 3pm Wednesday to make sure it went through overnight. I applied for MED online on the Thursday 17th.
The money was debted out of my bank account Friday...(these guys aren't slow ...eh?:))...
There are more floats to come so I thought I'd share this post as the best option for others who decide late.....
All's not lost Turmeric
Watch for the Throwback "event" (~ 60% probability)
6956xxxx
We find out the result of the book build on Wednesday and the allocations on Thursday I think (tough we may be able to work it out on Wednesday if it is formula based like MRP).
Can anyone confirm what the Ticker will be, I have been referring to it as MEL but have seen others call it MED.
If they get heaps of rain maybe it will be MUD....
Update: It looks like the rain gods now favour the MEL float, having been opposed for much of the year;
http://www.electricityinfo.co.nz/com...Page.hydrology
I have extended work that I have done on Contact Energy and Mighty River Power previously to try and get an idea of how much it would cost to reproduce Meridians power generation assets on an inflation adjusted basis. Why? Because a potential Labour/Green coalition government has vowed to base the return from power companies around an ‘historical cost plus construction inflation’ formula. I do this to assess the potential downside risk to the MER share price should the government change. Unlike Contact Energy and Mighty River Power, Meridian has wind farms.
To cost the wind farms I have used the publicly available information for ‘Mill Creek’. ‘Mill Creek’ is a 60MW extension to Meridian’s ‘West Wind’ windfarm project in Wellington and was projected to cost $NZ169m to develop. Projected generating capacity is 60MW. This 60MW will be achieved with a series of up to 30 individual wind turbines. So I think it seems reasonable to work out a ‘per Megawatt’ power generation cost, and extrapolate the inflation adjusted cost of rebuilding other windfarms in the Meridian portfolio from that. Since the advent of the 2008 financial crisis, the cost of purchasing wind turbines has come down, even if I suspect the cost of building the foundations and roading access to service them continues to increase.
I have assessed the hydroelectric power stations on the same basis as I did for Mighty River Power. This means a medium sized turbine and associated electrical system, around 80MW,
is valued at $NZ100m with higher capacity turbines and ancillaries scaling up from that basis. Thus a 100MW turbine is valued at $NZ120m, for example. Separate to all of that is the earthworks and concrete construction of the dam itself. These are not generally thought of as working parts subject to wear and tear. An extreme view would be to regard these civil works as ‘sunk costs’, which should be valued at nothing from a power pricing policy perspective. I don’t believe that such an approach is reasonable though, unless you expect the government to bail the generators out and fix these structures up for free should they be damaged by an earthquake.
For civil superstructure associated with power generation, I have assigned a ‘defined cost’. This would certainly be less than replacement in today’s construction dollar terms. Benmore for example I have ‘costed’ at $600m in 2013 dollars. Compare that to the physically smaller 432MW Clyde dam owner by Contact Energy, which had a construction cost of more than $NZ1.6 billion in 1990s dollars. Granted the geology around Clyde construction was more challenging. But Clyde is still the most recent large-scale dam construction in NZ from which we can derive any costing basis.
OK, there is the method I am using. Now, what kind of results am I getting?
SNOOPY
My valuation list for the Meridian power generation assets is as follows. Note that for the hydroelectric dams I have split my valuation in two parts.
1/The first part is the dam and associated concrete works.
2/ The second part is for the turbine and the ancillary electrical equipment.
Te Uku (windfarm) 64MW: $NZ180m
West Wind (windfarm) 143MW: $NZ400m
Te Apiti (windfarm) 91MW: $NZ255m
White Hill (windfarm, Australia): $NZ225m
Mt Millar (windfarm, Australia) : $NZ200m
Ohau A (hydroelectric) 264MW: $NZ380m + $NZ300m
Ohau B (hydroelectric) 212MW: $NZ300m + $NZ250m
Ohau C (hydroelectric) 212MW: $NZ300m + $NZ250m
Waitaki (hydroelectric) 90MW: $NZ150m + $NZ100m
Aviemore (hydroelectric) 220MW: $NZ320m + $NZ260m
Benmore (hydroelectric) 540MW: $NZ600m + $NZ600m
Manapouri (hydroelectric) 800MW: $NZ900m + $NZ900m
I get a total of $1,260m for the windfarms and $5,610m for the hydroelectric dams, for a grand total of $6,870m in power generating assets. For ease of calculation I shall assume that all other property plant and equipment balance sheet assets are negligible compared to these operating power generating assets.
Turn to page 136 of the Meridian prospectus and you will see that forecast property plant and equipment assets for FY2014 are $6,954.4m. That is very close to the $6,870m of assets that I have listed above (I didn’t reverse engineer all of this for Meridian, I promise)!
Some would argue that Meridian are sitting on revalued, and grossly overvalued assets that have been inflated in value to justify high power prices. But I have reviewed the likely replacement cost of the working parts of those assets, with a heavily discounted allowance for earthworks and concrete thrown in. This approach shows Meridian’s assets are very much fairly valued. I have previously suggested that Meridian are contributing to the poor health of some NZers, through excessive charging for power. But in light of my systematic calculation I have had to revise that view. It now believe the implication by Labour/Greens that Meridian is overcharging for its power is weak.
SNOOPY
Snoopdog, did the eureka moment hit you in time to get your application in?
just goes to show what a pair of slippery chaps Cunliffe and Parker are.......
Over the weekend someone posted about injecting resin into power station generators stators, as a last end of life fix. That fix has apparently meant these components are now operating twenty years beyond their use by date. These posts may or may not have related directly to Meridian. Nevertheless the tone and detail of those posts suggested that the poster had some inside knowledge of the procedure. These posts have since been removed. That leads me to think that while the offer period was open someone higher up in the hierarchy suggested that such posting was inappropriate. I know who the poster was, and I see no reason to get them into trouble by reidentifying them in on this forum. Nor do I wish to relay any specific possible insider information and so get myself into trouble. However, I see no harm is discussing such a procedure as it relates to power turbines in general.
The subject of depreciation of very long life assets is an interesting one. Industrial componentry can be designed to last for an extremely long time. With purely mechanical components you can do things like inspect the conditions of the bearing surface and measure the wear and tear via float in the components. Electrical systems are a bit more tricky. Often electrical components can work just fine until they suddenly short out. If our NZ maintenance engineers can use their ingenuity to develop a system to extend the life of these components, then that is to be applauded. Resin is usually a non-conductor. So it comes as no surprise to me that it can be used as an electrical fix.
Mighty River Power got some criticism for supplying only an edited version of the engineering report that examined the state of repair of its dams and power stations. Meridian supplied some more information on this subject to their credit. One of the purposes of a prospectus is to outline to investors possible risks for consideration. Some would say if you read through all of the risks in any modern prospectus, then you would never invest! Lawyers do have a habit of wanting to cover themselves, and that is fair enough. Perhaps then I have been too alarmist about some of the disclosed risks in both the Meridian and Mighty River Power float documentation? I do have something to say on the subject of maintenance policy in general though.
To me, it makes no sense to have a maintenance policy where a critical component is listed as still running twenty years past its use by date. I am not questioning the idea of patching up machinery as in the case of Meridian this has clearly worked. What is wrong in this instance seems to be the policy of listing equipment as fully depreciated when there are decades of life left in it.
SNOOPY
No :-(. However my calculations are really back of the envelope stuff. I was working with ballpark figures and I am sure that Labour/Greens would have to be much more rigorous in setting a policy framework than the sort of thing I have done here. IOW, I may be looking at things the wrong way, and I am sure you could pick holes in my detailing. But you have to start somewhere. From my initial perspective the assets of Meridian are not overvalued.
SNOOPY
If you look at note 22 in the MEL annual report for FY2013 (curiously I can't find the information in the prospectus) you will see that Meridian have written down the value of their power assets by $849m. The Meridian prospectus was prepared after the announcement of the Labour/Green single buyer power policy. The Mighty River Power Prospectus was written before. Another way of looking at this is that Meridian have made a pre-emptive strike on the value of their power assets. That means that if the single buyer power policy is implemented, Meridian will be able to point to how reasonably valued their assets are. Cunliffe and Parker would be working on the 'old' Meridian asset values when the single buyer power policy was dreamed up. So they may well have been correct that under the old asset values, Meridian was price gouging.
CJ on the Mighty River thread, has suggested that the write down in Meridian asset values has got something to do with the reduction in discounted future cashflows connected with the renegotiated Aluminium smelter power pricing. He may have a point. However, given a scaling back in the power demands from NZAS, would this not spill over into the market beyond just the effect it had on Meridian? Why did the Mighty River Power annual report, which was distributed after the NZAS power price contract was renegotiated, make no mention of this?
SNOOPY
discl: hold MRP, CEN but not MEL
I'd like to see someone try and build Manapouri for $1.8b in todays construction market .... $5b doesn't seem unrealistic to an absolute layman like myself ( given the cost of building a 4 bed house on a flat piece of land here in Queenstown of reasonable quality is $1m ++
Snoop Dog - I am pretty sure they explain the revaluation in the press release that goes with the accounts.
Plus, these power stations are built in the middle of nowhere. Construction costs then become slightly stratospheric.
UK has just signed a contract with China, and France, to build a new Nuclear Power Station.
http://www.telegraph.co.uk/finance/n...-Ed-Davey.html
It is going to cost 14 billion pounds sterling. Just for one power station. We should possibly compare our power station costs with overseas power station costs.
That is a reasonable judgement FH. As I hinted in my post 425
"For civil superstructure associated with power generation, I have assigned a ‘defined cost’. This would certainly be less than replacement in today’s construction dollar terms."
It is all very well saying if you put the real construction cost of the dams in today's terms into the accounts then MEL is not worth $1.60. The price should be closer to $4. But we all know that Meridian themselves gave up on 'Project Aqua'. And we also know that Mighty River and Contact both see geothermal as the next lowest cost cab off the energy generation rank. I can't see another mega hydro dam being built by anyone in NZ in any current shareholders lifetime. That means IMO it is rather pointless to speculate on replacing these dams at current construction costs.
IMO the value of these dams on a per megawatt basis must now be determined by finding out the per megawatt basis construction cost of the next likely option. At the moment that seems to be geothermal energy.
The other point I would make is that even in the case of a devastating earthquake, it is unlikely that one of these dams would have to be rebuilt from scratch, earthworks and all. IMO, then these dams should be carried on the books at some kind of potential repair cost. I am really guessing what that be, except to say that it will be less than the total rebuild cost. I hope that brings some understanding as to what I was getting at with my dam 'defined cost'. Of course that still doesn't preclude me from being wrong with my dam 'defined cost' figures.
SNOOPY
Some general observations about a theoretical rebuild of Manapouri.
While no doubt a rebuild of Manapouri would cost an eye watering amount of money it would be relatively cheaper today. The original drill and blast method has been replaced by cheaper tunnel boring machines. Bechtel would not be doing the fluid dynamics calculations so there is less likely to be stuff-up in the tunnel bore specification, and the design and construction was commenced before the 'dam the dam' level of the lake was settled. Any rebuild would be optimised for current lake level.
Boop boop de do
Marilyn
PS. Snoopy, the North Bank Tunnel project is thought to be the most favoured method of harnessing the Lower Waitaki
Imagine if MEL mirrored the Royal mail IPO:
How is that for scaling!!! no wonder it popped 38% on the first day!Quote:
Cable added on the BBC that the aim had been to secure committed shareholders. About 90 percent of the institutional allocation was placed with long-term investors such as pension funds and life insurance companies, with about 10 percent going to hedge funds, and the majority of institutional orders -- 500 out of about 800 -- received no shares at all.
Among successful subscribers were Threadneedle Investments UK, Fidelity, Blackrock Inc. and Standard Life Plc. (SL/)
The institutional allocation was cut to 67 percent from the planned 70 percent, the government said yesterday, with small investors getting 33 percent of the issue, up from 30 percent, after the stock assigned to them was seven times oversubscribed.
Royal Mail will pay investors a dividend of 133 million pounds in July, the government said, and a notional full-year dividend of 200 million pounds, which translates into a 6.1 percent dividend yield for 2014.
All individuals who applied for 10,000 pounds or less of shares -- more than 690,000 people -- received an allocation of 227 shares, equivalent to 749.10 pounds at the maximum offer price of 330 pence. Those who applied for more than 10,000 pounds got nothing.
HT to the Alex cartoon which alerted me to the huge scaling!
Got 227 for my UK pension fund. They are now up 54%. Unfortunately I sold them on the first day! Truth is that UBS, Lazards and Goldman Sachs totally mispriced the issue even though many other banks advised that the RM was worth much more. Robbed the UK taxpayer IMO.
Oddly the 670,000 who applied for the RM float would only equate to 46,000 Kiwis applying if a similar float was done here.
[QUOTE=Snoopy;434167]The problem is that a Maintenance Engineer is NEVER on the Board. So advice is not forcefully pushed against that of the Accountant. Who always has a short term view. It will take 12 months in my view to order new generators and install them. They are not 'ex stock' Auckland.
Anyone have the price yet? If not, any idea what time it's due?
Well just given the nice lady from Meridian who rang me a pleasant surprise.Yes ,I would love to go back to having Meridian as my power supplier.!!!
A senior figure at a major institutional investor said the range was "effectively" in the $1.50-$1.60.
http://www.stuff.co.nz/business/indu...capped-at-1-60
She was really surprised when I told her I was becoming a Meridian shareholder.I told her she should get hold of a shareholders's list and phone them.I am on a fixed contract until 31/3/2017.I have CEN for our gass. A $150 'welcome back' credit is a nice bonus.Was offered $75.Told her if she doubled it I would come back.
When I changed from Meridian to Genesis they buggered up my direct debit and were about to cut off our power supply.I was down south for a week and they were refusing to deal with the wife as she was not the a/c holder.Genesis had promised to organise it all. I stayed with CEN for gass as I did not trust Genesis. So pay back time.As a shareholder, Meridian better get it right or Percy will make trouble at Meridian's agm.
So its $1.50, interesting. I'm hoping that's because this is a political football and not poor demand related
Edit: Link http://www.stuff.co.nz/business/indu...shares-at-1-50
This one will need to work for national and co lets see how much institutions stump up and pay
Broker firm offer scaled by 10% down. And policy on retail offer here
http://www.voxy.co.nz/business/merid...llion/5/171714
Wrong press release its here:
http://www.scoop.co.nz/stories/PA131...aises-188b.htm
Am i right here ?So that means easy to trade prob no cap to worry about for buyers on mkt.
Wow is $1.50
JT
Yep, all priced on same basis $1.00 now, 50c later.
interesting they don't advise the level of scaling for insto's, but their wording suggests greater than retail and firm.
anyone know ?
As per press release from Mothman
http://www.scoop.co.nz/stories/PA131...aises-188b.htm
Quote:
General Offer applicants – scaling policy
Given the strong level of demand, progressive scaling has been applied. This means that larger applications are scaled more than smaller ones.Overall, 95 percent of retail applications will receive at least 90 percent of the shares they applied for.
New Zealand retail applications
How your application will be scaled:
You will receive:
First $2,500
The full amount you asked for
From $2,501 to $10,000
90% of what you asked for
From $10,001 to $15,000 85% of what you asked for
From $15,001 to $20,000 75% of what you asked for
From $20,001 55% of what you asked for
Individual investors will receive confirmation of their allocations from Friday 25 October 2013.
Broker firm applicants – scaling policy
Broker firm applications have been scaled on a pro rata basis, as outlined in the offer document. Broker firm client allocations have been scaled back by 10%.
Good price for those who intend to hold for a long time.
cheers Xerof ,that is going to make a big diff imo and is a bonus for us on top of $1.50 No penalty for anyone buying before 18 months makes this so much more liquid hence tradable for thuse inclined which is healthy for the share and the s/p.
Apologies, didn't closely read your post. You're probably correct, institutions will probably be heavily scaled back. Interesting to see overseas instos share is more than double than NZ instos.
I think that price augers well for listing , unless Wall Street takes a dive in the meantime.
Pretty well priced I'd say
Reading between the lines 95% of those in the retail offer applies for $10,000 or less.
I assume the big buyers went through the brokers which is lucky as over $20k, retail got scaled down to 55%
Let's hope the NZ insto's got scaled big time, especially those that talked it down.
Hi all, I may be reading into this incorrectly, but the general flavor of what I am reading is that people are in for a quick buck. i.e. sell pretty much after it floats. Nothing wrong with trying to make a quick buck, but however if everyone is trying to do the same thing... Just saying. Perhaps instos that need it their portfolio will be your savior. I just get a nasty feeling that this thing is going to tank. Could be wrong & could be biased as I don't think these assets should be floated at all as I have seen the damage done overseas. Anyway good luck to all hope it goes well for you. Cheers Daytr
With Instos significantly scaled back and the price at the lower end underpinned by the D/Y I'm thinking its looking good. I have no intention of selling in the short term myself, looking forward to div and some s/p gains.Also have no int in attracting the IRD .
Percy....you are acting as our government should have. Me to.
Its a sad day to see this large share of our assets go.
Its sad that the price is so low for the NZ tax payer.
Its sad that there are so few New Zealanders participating.
Its sad that mostly rich folk are benefiting with bigger holdings...and that ultimately the NZ tax payer base will bear the cost of this.
Ah well...such is life(politics) ...move on RTM and hopefully enjoy the dividends.
But its a sad day guys....from my perspective anyway.
At last, NZ treasury have priced an offer 'to go' and left something in it for the next man:).
Personally I'll be more than happy to sell if the part-paid get anywhere near $1.25.
Well, according to pumpkinhead shadow minister of SOE (he's more like an eclipse), we have been granted a gift at 1.50.
i agree, thanks to labour/greens nationalisation plan threat
Black Cross a $1.25 would be great and I will be gone to, not sure if that will be realistic though. What are others thought on first day price?
........about time we got something back. Ive just bought part of a power station which we stole off the government and that feels good. Agree we've got ourselves a bargain......just hope the market sees it that way also. Picking $1.15/1.25 opening.
My read of it is that although 'only' 62,000 shareholders, most came through the firm allocation route, in larger lot sizes, i.e. Seasoned investors who are buying as yield play for the long term.
everyone has been scaled, I will be buying my shortfall on any weakness shown in the first few weeks, as I'm guessing will many others.
the key will be the institutions, who have possibly deliberately low-balled the book build, and lie in wait to pick off the weak holders/staggers.
They have been scaled, and it says a lot that the level of institutional scaling has not been declared. The only guidance given is 'substantial'
What will the opening price me? I think it will be $1.00 then slowly go up to $1.05 and die down to 90's cents.
What I'm really concerned about is that this shambles with the asset sales, the supporting of John Banks, etc etc, will mobilise voters towards a Labour / Green coalition. That's exactly what the country needs. Yeah Right !
Im leaning their way .SKC shareholders will be worried; sorry no sympathy from me as im anti gambling. And who in their right mind would support John "i didnt read it" banks?
I have just checked my holding with computer share.I received 10,000 firm from Craig's and have been issued 9,000.
Pretty happy with that.I expect the wife will receive the same.Will most probably add to our holdings when they list.
Good one percy. Looking a bit like a gift horse with a tigers tail:).
It is crap that the retail investors do not know the scaling of the Institutional Offer. The insto's know the scaling of the retail offer & the insto offer. Can this really be a "fully informed market"? Anyone know if this is legal as per NZX rules or can MEL get away with it under the prospectus. I would love to know what the insto's applied for.
Have just asked my broker that question surf. "no we are trying to find that out now". Will let you know if i get the facts ( before anyone else)
http://www.reuters.com/article/2013/...0ID1OP20131023
reuters article quite bullish, suggesting sold cheap to appease public after MRP. Good ausi insto demand. Pick $1.11 open.
..........got it on line! Scaled back by 10% thru ANZ.......happy with that.
I bought retail and have no scaling...but I did apply for less than Percy.
Well I reckon this soe sale process has turned into an unmitigated disaster. I didn't get any mrp or mer in the hope of staging.
Mrp now down to $2.15, that's a fail for shareholders.
$1.50 on instalment is a joke for the tax payer. Spin reckoned over 150,000 buyers. Only 66,000 turned up to play. That doesn't bode well for stags
Good luck to those who got their allotment for a long term hold. I reckon you would have been better off waiting for the market to settle before buying.