Colin, et al , Whats your guess that the new IFT partly paids will sell for once they list next month? July warrants at .15 plus the .55 call = say .85 ( allowing for some leverage)
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Colin, et al , Whats your guess that the new IFT partly paids will sell for once they list next month? July warrants at .15 plus the .55 call = say .85 ( allowing for some leverage)
I'm overseas again. Wondering if anyone can tell me if Infratil will send out a letter regarding how to exercise your warrants? Or is it just a case of sending a cheque to the share registrar with your CSN number?
Whatsup, I have no idea, but I think they will take a while to shake down, given that it will be a rather unusual instrument for the market to assess. But I am sure that, in a short time, it will be greater than the difference between the prevailing price of the ordinary shares and the amount still to be paid to the company - unlike the present aberration in the market.
Your figure of 85c could well be close, but I wouldn't be surprised if it turned out to be higher because I believe the IFT price will maintain its current momentum.
I am waiting for a letter any day now, because the company has to formally notify holders about the resolutions to be put to the meeting which is not far off. I am sure that the necessary forms will also accompany this notification, asking warrant holders to state which alternative they wish to choose, i.e. full or partial payment.
What we also need to know is the last date at which the present warrants can be traded - which will have to be a few days in advance of the maturity date so that those who purchase on the market can get their cheques to the company on time.
Lissica and Colin, go to the www.infratil.com website and click on "company news ann" and its all there.
Today in the post I received my notice of special meeting in Well for the 25th June re the resolutions asking to vote on the change of terms re the split payment for the exercising of the 10/07/09 warrants.
Thank you colin
I expect Infratil will mail out the required form shortly to enable exercise of the IFTWB warrants, it is available on their website , though not one for the partial payment, iy anyone is concerned at missing out.
Found it! Thanks ^_^
http://tinyurl.com/kj3z7v
Received my Notice today. Some key info:
- After the 25 June meeting the company will provide us with a further notification of our choices and provide the appropriate exercise forms.
- The existing warrants may be sold through the NZX until Tuesday 7 July. They will be tradeable again from Monday 13 July provided that the 55c has been paid.
- Payment of the 55c must be RECEIVED BY 10 July.
Big question: Can I trust NZ POST?????????? (See my rant under APT, etc.)
Interesting that Jetstar want the Govt to open Whenuapai to commercial operations. That idea seemed to have been squashed a couple of years back, with AIA jumping up and down, but maybe the new Govt might be more receptive. I am sure that IFT will be quietly plugging away in the background.
Also noticed that ACC have bought up more IFTWB on market.
Went to investor presentation by Tim Brown.
- Apart from global uncertainty, all looks pretty positive aside of duds poor results of some investments and market pricing of shares.
- B warrants considered major cause of SP slide in last year (in addition to macro factors) which is why they have taken recent actions
- Expect strong earnings lift in next year as benefits of high capex in last 4 years starts to come through combined with very low capex this year ahead
- Debt reduction remains a focus as market has tarnished them with same brush as the likes of BNB so wish to avoid that perception
- Looks like they will be out of ENE soon. Very much in play.
- Very bullish on TPW. Not worried by Brownlees blustering as big generation investment is needed going forward and won't happen if uneconomic.(same comments apply to NZ airports review)
- IEA looks like could be a major earner in next year or two. They are expecting huge margin improvement from current levels as they have been pricing for growth. Also expect to have eventually have 1m customers (currently 400k)
- Euro airports not flash, but losses in last year will not recur as they have restructured. Expect big rebound when cycle eventually changes but dont know when. Will get their money back and holding costs from Lubeck sale $64m
- Wgtn airport, a stellar performer and confident of a continuation due to changes in Australasian air scene.
- Expect further assets sales in stagecoach. Very peeved off with dead wood in this sector. Snapper card still in the running with others for Auckland bus card tender.
All in all things are looking up from a couple of crap years.
Thanks for that summary, Rif-raf. I agree that the Warrants have probably been a handicap on the sp, and there will be a bit of an overhang to the extent that these are exercised - or partially paid - next month but, once all that has been digested, I would expect to see some steady sp progress (upwards).
Don't like situation with Stagecoach. Ift waxed lyrical when they bought Stagecoach about how wonderful everything was going to be and how the transport set-up in NZ would result in them making heaps. One reason why share price went to record high in 2007. If they read this one so badly wrong, can they be any better at reading other plays?
Rif-raff
I was intending to go to the presentation but was once again caught up with Zespri discussions as we lost our Kiwifruit crop in the hail last month.
I lobbied IFT earlier in the year re the warrants so would like to think my input helped.
Due to the current low SP and that we have lost our entire income for the next 12 months, I am having to rely on the bank to fund my deposit on the warrants.
I still like IFT but have been caught out being over exposed.
Hoping for better times ahead.
Funny how I was rubbished not so long ago for saying their purchase of the bus companies (especially Stagecoach) was a very large Dog
An ASX release today states that the non binding Archer Capital offer for 100% of ENE is in the range of AUD $2.40- 2.80 per share.
svez01: welcome to the forum.
I believe there are several reasons why the approaching date for exercise of the "B" Warrants would have a negative effect on the share price, but basically they are the following:
1. The "dilutionary" impact. Whenever new shares are issued by a company the net value attributable to the existing shares is impacted. The extent of such impact is determined by the amount being paid by the "new" shareholders, i.e. if this is less than the net value (not necessarily the book value) of the existing shares then there is less of a "shareholder pool" to be spread over all shareholdings. In the case of IFT each new option exercised before 10 July brings $1.62 into the company but the general market consensus would be that the true net value of the shares is well above that figure - particularly if holdings such as Trust Power and Wellington Airport were spun off.
2. Many holders of the Warrants will also be holders of the shares (remember that these Warrants were distributed "free" to all those who took part in the relative capital raising) and a lot of such holders will want to sell enough of their shares to raise cash to enable them to exercise - or partly pay - their Warrants. This puts selling pressure on the shares.
3. Some who exercise their Warrants may then want to sell resultant shares, e.g. institutions - and also individuals - wanting to balance up the weightings in their portfolios. This again puts downwards pressure on the share price.
4. Uncertainty as to just how many of the Warrants will be exercised or partly-paid, and the resultant impact on the company's net cash position. Also, if the share price should fall back below $1.62 at any stage between now and 10 July (it had better not, from my perspective!) there will be no point in Warrant holders exercising their Warrants as they could buy shares more cheaply on the market.
I trust this is of some help.
Cheers.
Well, I seem to have flushed out quite a few IFT detractors! (including on IFTWB thread).
I agree that the European Airports are a bit of a millstone around their necks, and there is unlikely to be much relief in this department any time soon (although they will be getting rid of Lubeck in October, by exercising the put option). However, we need to maintain perspective by surveying the total IFT portfolio, and I have done the following quick (rough) breakdown of the relative earnings contributions from each of the major segments of IFT's business, as at 31/3/09:
Trustpower 73%
Australian Energy 6%
Wgton Airport 18%
Europe Airports (5%)
NZ Bus 11%
Other, elims, etc (3%)
I don't think the breakdown of assets employed in each segment have been published yet (although they may have been made available to those who attended the recent Investor Presentations) but as at 30/9/08 the position was as follows:
Assets: Earnings:
Trustpower 48% 67%
Aust Energy 15% 14%
Wgton Airport 9% 16%
Europe Airports 12% (3%)
NZ Bus 9% 9%
Other, elim, etc 8% (3%)
So, on the half year figures, NZ Bus earnings were in keeping with their allocation of assets. It was a different story with the Europe Airports, but they accounted for only 12% of the total portfolio.
I fully appreciate that this is by no means an in-depth analysis (I'm not paid to do that!) but I just wanted to make the point that, while the Europe Airports are a bit of a problem, don't lose sight of the total picture.
What would a controlling interest in Trustpower be worth, even on today's market?
Colin, Any idea just how much money IFT gets back if it exercises the put option for Lubeck?
Yes Euro airports is the dog, but at least they have restructured so losses will reduce.
Colin is quite right, the assets in euro airports is quite modest in the bigger picture at 12% and the Lubeck sale will realise about $60m I think which will reduce this further. The company seems to think that over time growth in aviation always bounces back after a recession to long term high growth trendline and for that reason can't help think that the strategic significance of the Kent airport is going to make it very valuable one day..but not sure when that day that will be!
Revised offer for ENE last night in Aust up to $2.80 A now but D D will take 2-3 months with a conditional offer at this stage, if successful should net IFT approx $86 mil Kiwi ,that along with the July 09 warrant $ and asset sales should achieve its repaying down of its debt ala Hellaby rerating once its net debt was more manageable.
Yes, $2.80 would be a better price but would still leave IFT with a solid loss on its ENE investment.
The market's not impressed as far as IFT is concerned, although the ENE SP is moving up, as expected.
Another piece of good news (from the Annual Report) is that Lloyd Morrison is making good progress.
Actually I expected the IFT price to be down today, following the depressing effects of the jobs situation in the USA as reflected in the Dow. In fact I expected the whole NZX market to be decidedly down today, but I think what has propped it up a little is the weaker US dollar.
Ift starting to look like GPG with its investment track record - where are the winners in recent years?
Its not clear in the announcements but when do Infratil get the cash from the underwriting of the warrants .... say if most front up with the 55 cents in a week or so do FNZ wait until next year to see ehat happens
If thats the case the best case for IFT might be nobody fronts up with the 55 cents and then FNZ front up with the $1.62
Anybody know ... confess haven't researched throughly ,,, only read the IFT announcments
Only a couple of days trading left for the IFTWBs before they go into hibernation for a while
At least this weeks action on the WB pricing seems to have confirmed that a premium on the WBs is never going to be any more than than 10 cents .... at the moment a bit less than that so maybe still some value post the first round of payments
IFT stated target is 'absolute return target of 20% pa. after tax on a long term basis.' from earnings growth over time with businesses reinvesting these earnings and then something about a 'step up' in value.
Anybody know they measure this? And are they achieving this target?
On a BV per share falling short a bit over the least 10 years even though ASB has TSR return over 10 years in excess of 20%pa (assuming pre tax and dividends reinvested)
ENE doesn;t seem to meet these targets
There are huge differences between IFT and GPG, IMO.
IFT's biggest investment by far, Trustpower ( 48% of IFT's assets) had a good year and its SP, while not at record highs, is holding up well. The second biggest, Wellington Airport, is also performing well.
We don't know much about how GPG's biggest investment, Coats, is travelling at present but the vibes certainly aren't as positive as they are for Trustpower.
Bus drivers in wellington had their grubby little hands in the cash box .... but Snapper fixed that .... wonder how much really did go missing ... more than the half mil I'd say
I'm looking hard at IFT, winner69 can you elaborate on your last comment please?
Thanks W69.
That hardly puts me in the detractor camp, especially when you agree with my statement regarding the Euro airports.
AFAIAC, if the asset is performing poorly and it shows no sign of a medium term turn-around, then it should be disposed of as the Euro airports will be.
Some decry NZ Bus being in the portfolio, however as I outlined in my previous post, it has IMO performed moderately well, so does not warrant disposal unless the right price is paid ;)
Well done on the analysis work Colin! Keep it up!
Would any TA guru care to provide a technical viewpoint of where this stock is at the moment?
For the guru,you will have to wait for Pheadras, and I don't know how to post charts but;
IFT has just broken through the upward trendline,and is heading down.
At the moment OBV is still in an upward trend,by the look of some of the other indicators e.g RSI and macd it may be headed for a period of sideways movement.
Sorry this may not have been the chart you wanted,but I'm sure The Guru will come to the rescue.
I read in the [online] papers that NZ Bus has locked out the workers and you are all trying to squeeze onto the trains.
Obviously not doing Infratil's SP any good.
Maybe it will go up again when peace and industrial harmony resume.
regards
Paper Tiger
I think it will take more than peace and industrial harmony to move the shareprice much. I've found Infratil my most frustrating shares over the last couple of years. Don't know if it's all those B warrants outstanding or Lloyd Morrisons health holding them back.
I wonder how much involvement IFT directors have with the bus lockout - there's a lot of people finding alternative ways to get around that they might just stick with - a week is long enough to embed new travel patterns, so long term business affected as well as loss of 1 week's income.
The media coverage is definitely doing damage to the SP. The markets have moved ahead and IFT has gone backwards despite being an infrastructure share.
All of the models show that the impact on bus users has not long term effect. Like eveyone else, I want the workers to life their work to rule and get on with driving the buses.
In tough times like now I would have thought that everyone was lucky to have a job, not hold out for double digit pay rises. If IFT management gives in and then pases on the cost to the Auckland public, then guess who loses.
There's an old American adage that most strikes occur because both sides want it.
Now it wouldn't be for bigger subsidies, would it?
;)
NZ Bus management quoted as saying they may lift the lockout ban.
Toddy How come the other companies are paying their drivers $1.50 per hour more and more penal rates as well. The council should have just terminated the contract and bought the business for a song. Who else would buy it. And what are employment rules in place for if the employer objects to them obeying them. The management of infratil were crazy to pay over the odds to buy this business it was not for sale. But they made such a riddiculous offer that the owners said thank you very much. The sooner Infatil get out of buses the sooner it will be worth looking at as an investment again.
TA viewpoint:
Although it is right on support at the moment, the stock does not appear to be under buying pressure, and has completed a bearish pattern on a short time frame. Although longer term it looks better.
i tend to think the resistance level at 1.70 ish will be stronger than the support level here at 1.63. I even found a bearish harmonic pattern. another test of lows imho. I'm not saying its anything to do with the buses either , although the current situation seems a bit farcical, its the tea leaves I'm reading and so my opinion should be regarded in that way:rolleyes:
Toddy why should council subsidise NZ bus more than the other companies that can pay their drivers more. To many high paid managers in NZ Bus & Infratil. I do not wish to pay extra rates to subsidize NZ Bus Just cancel the contract 7 they will come back begging to do it for 20% less as the Auckland branch of NZ bus would be worth stuff all without the contract.
This is better PR for NZ Bus. In todays Herald.
NZ bus was offering the drivers too much money according to the independent ERA who was bought in to sort this mess out.
* Wage rates
Current rates: $14.05c to $16.75c an hour plus time and a quarter overtime.
What the company offered before the lockout: $1.80c an hour increase in three stages over 36 months - 70c now, 50c next year and 60c in 2011
What the Employment Relations Authority recommended last week: $1.40c in two stages over 30 months - 70c now, backdated to July, plus 70c in November next year
ENE
The ENE board has recommended to reject an AUD $2.65 bid for the entire company. The board has also terminated the U.K/Europe bid.
As the economy has picked up since the initial offer the board is more bullish about ENE's prospects and does not want to give away the company.
The Board is now very positive!
Toddy who are the members of the ERA are they all well paid professionals with university degrees that have never driven a bus in their lives that are more interested in profits for the company and their fees for appearing? Why did they not bring in new drivers or drive the busses themselves? It seems to me they need to go drive a Bus for a week. And did they declare if they held or did not hold shares or have interests in Infratil shares? Can you tell me why they expected to solve a dispute by recomending less than was allready being offered?
In a recession excessive wage price demands are unrealistic. They suggested a back dated increase but a lower future increase - so holds the overall inflationary increase going forward, but provides a short term bonus for workers. Seems like proposal that attempts to create something for both sides.
RIF-Raf excessive profits in a recession are also unrealistic other bus companies are paying higher wages & more Penal rates than Infratil's NZ BUS. And more purchasing power in the lower income area reduces borrowing and flows through the economy helping to end the recession.
Colin Is it Bad Management or excessive Management Salaries Other bus companies are paying drivers more. Or were Infratil Management dreaming about the profits in running bus companies. In my opinion Infratil has been going backward for years in returns to shareholders.
Good result from Trustpower today. AIA also on the improve.
TrustPower Limited Unaudited Financial Results for the Six Months Ended 30
September 2009
TrustPower's consolidated underlying surplus after tax excluding fair value
movements on financial instruments, which are inherently volatile, was $72.5
million for the six months ended 30 September 2009 versus $68.3 million in
the previous year; representing an increase of 6%.
EBITDAF increased by 13 per cent to $154.9 million from $136.7 million in the
previous year.
IFT are starting to get a few ducks back into line. Its slow progress, but atleast IFT have plenty of cash to feed them.
30 October 2009
Sale of Luebeck Airport
Infratil Limited announces that on Friday 30 October it exercised its put
option in respect of its 90% shareholding in Luebeck Airport and ownership
has transferred to the City of Luebeck.
When Infratil acquired this shareholding from the City in 2005 it also
acquired a put option that allowed it to require the City to reacquire this
shareholding if passenger numbers failed to reach an agreed threshold.
The exercise price of the put option is approximately Euro25.5 million (which
converts, after existing foreign exchange contracts, to NZ$64 million), with
payment due in early November.
Gidday B
Broke even, Heard the infratil guy on the radio.
hey CJ your memory is pretty good seeing as it was written in the 4th post ahead of you
but I think the answer being sought is more like this
:http://www.infratil.com/content/view/1921/98/
Should the revised planning approval application be unsuccessful, Infratil may put its 90% shareholding back to the City for the initial purchase price plus agreed operating losses, capital expenditure, planning approval costs & interest (option price).
True
But as the losses were put through during previous accounting periods, they will have to book a profit in the p&l this half and take a smoking load of cash to the balance sheet.
The guy on business tv at lunchtime said that IFT are on the hunt for new deals in the market.
So it was tails. Considering the GFC not the worst outcome ever.
and TPW just keeps quietly delivereing
My statement still stands. Any currency movement valuations were booked into the respective accounting periods at the time and the SP moved in response.
So, IFT booked up loses year after year. Then when the option was exrecised any 'refund' has to be booked into this accounting period as a profit.
Its all good, cash back for an investment that did not work. More risk removed from the IFT portfolio.
Its a long way back to the glory days but this is a good start.
Now IFT and Morrison are looking at Shell's assets............
Exclusive negotiations for all of Shell NZ assets also includes NZ Superannuation Fund so could well be a goer.
Cheers
Agree. It is not whether money is spent but whether the price paid is good.
Not sure on the size of the investment but the market may not like the idea of a capital raising to fund the purchase. I guess that depends on the price, the % interest and how much debt they can get access too.
The other issue is how much growth is there in downstream oil?
I'm not sure of the numbers either, but they did just sell an airport, so maybe don't need to raise cash.
I think that the superfund may provide the cash and IFT provide the management on a day to day thing. I think it will be a good buy for ift. Good cash flow and steady income. Shame Lubeck never worked out but they got out well with hedged currency exposure so did ok. Looks like IFT is getting ready to go on a bit of a spree.
The word on the street is that IFT's investment in Shell assets would be around the $600 mil range. With todays AIA cash sale then the general view is that IFT 'WILL NOT' be required to go to its shareholdes for further capital.
So, whats with all of the dumping of the stock.
If they can borrow the funds off the bank or via a bond issue and get the Shell assets cheap i.e they more than cover the cost of capital. Then the deal would/should add value to the SP.
Or is this just a case of good old Kiwi insider trading or the likes.
Can anyone enlighten me..........
So the question is, what is involved in the Shell assets? Is it just the pumping stations or does it involved the share of the refinery as well? Is there land involved? I'd be interested in a bit more detail...
Interesting move by IFT. They are becoming more of a diversified fund, and seem to be changing direction under Borgoevski, when under Morrison's management they were well and truly focussed on true infrastructure. First a bus system, then flogging off some of their airports, now buying petrol stations.
Sorry I cant find where this was but the assets Shell is selling are:
17.1% of NZR
25% of fly buys
Retail network (229 retail outlets, 95 truck stops, auckland and christchurch airport refuelling facilites)
I don't see it as a move away from IFT's focus on infrastructure but I guess it depends on how that's defined. After all, they sold their stake in POT some years ago - ports are "true" infrasructure?; the investment in ENE has been for sale for some time and it's only a matter of the right price before that goes; the Lubeck airport transaction was structured to be "redeemed" if growth targets weren't met. All these were done or put in place under previous management as was the NZ Bus purchase.
I just hope that they know enough about the oil industry to make the Shell assets pay off. In theory, they have expertise on the board in that regard. Time will tell.
I don't think that they are changing direction. Cleaning up after the boom days more like it. Lloyde is still very much involved from all accounts.
IFT need to sort a few things, they need to bring back the quarterly accounts and stop talking about market trends. Their monthly updates don't mean anything useful as only a magician could translate the numbers into bottom line p&l.
Its time to dump the pin striped suits and get back to basics.
thanks Aeneas. 25% of fly buys, wow. That's been quite a successful venture. The refinery has been a good sound asset for holders (including the fuel industry) for years. Fuel retailing is very low margin.
I think the move is interesting in the sense that they are going from an area where they have some expertise (airports) into an area where they have none (fuel and general retailing). I guess you could say the refinery is an infrastructure asset, but a chain of shops? what next? A cornerstone stake in WHS? ;)
As for the buses, well it's a stretch. I mean, they own airports, would they take a stake in an airline? Having said that, Warren Buffett has just bought a big train set so why not?
BRICKS has never been in IFT and now watching them loose 57 million on AIA don't think he will ever line up to BUY there STOCK..
BRICKS has never been in IFT and now watching them loose 57 million on AIA don't think he will ever line up to BUY there STOCK..
What's the likelihood of cheaper fuel for the buses and airports if IFT becomes a significant share holder in NZR?
They wrote the investment down in the previous financial year by 80 odd million, so will book a profit this year. They were not the only ones to lose $$$ on the deal that the Labour Govt stopped.
From Tim Brown
The divestment brings Infratil's sales of non-core assets to $220 million in the first half, in addition to $98 million of equity raising that leaves it with a considerable war-chest.
"Some of that we've used to repay debt, some we're using for organic internal growth," said Brown. "There won't be too many surprises. We've had a very active six months and you don't want that pace all the time."
The possible purchase of Shell's New Zealand assets, investment in an Australian power station and potential buying of new buses all figure in Infratil's future.
"The key is making sure the businesses all continue to perform as well as they can," he said.
[QUOTE=Toddy;281143]They wrote the investment down in the previous financial year by 80 odd million, so will book a profit this year. They were not the only ones to lose $$$ on the deal that the Labour Govt stopped.
Thanks for telling me IFT they are bigger DILLS for loosing 80 million instead of 57 million
the story is not getting any better.
AND forget about OZ power stations up for sale in NSW that subject is NO walk up start
doubt a KIWI mob would get a look IN..
How about vertical integration ? The Refinery produces the fuel, the "Shell" outlets sell it. Low margin, high volume ? And you can decide where to take your profit - refining or retail.
There seem to be two trends to fuel selling - unattended self-serve sites, and ever-bigger consumer/convenience retail with fuel as "hook" to get you in the door.
If the rumors are correct and IFT NZ Super make a buyout will "Shell" disappear or will there suddenly be a whole heap of New World or such like stations as in Australia where there are stand alone ones (not next to) a Cole's etc ??
Have they/are they lining someone up, cause I cannot see Pak'N'Save being the only one (they have BP fuel)
Todays NZ Herald article says it all......
Tim Brown
Infratil's share price slid 7c, or 4.3 per cent, to $1.53 yesterday after announcing it was quitting its airport stake. "It's a little bit of a surprise to me after everyone saying it would be a good thing to do this - now we've done it the share price goes down."
Rob Mercer
He agreed uncertainty over Shell was bearing on the share price and because the purchase price was difficult to determine this could continue.
"It's certainly created a lot of debate as to what the merits are. The market's looking at Infratil with the glass half empty - I think that's a little unreasonable. They have been forward thinking in having a capital structure with very little bank debt."
And the ODT
"Infratil is only interested in the Shell assets if the price is right and it can demonstrate it will add value for shareholders without needing to raise equity."
Infratil was trading at a 30% discount to Forsyth Barr's assessed net asset value of $2.92 a share. Mr Young acknowledged sentiment towards Infratil was more negative than it had been in previous years and the interest towards its involvement in acquiring Shell was "less than enthusiastic".
Can anyone name one other good investment IFT has made outside of TPW and POT?
This is a company living on past glories with not much else to show for the millions of management fees and capital raising done in the last few years.
I hope they do not buy Shell NZ.
Watch the sp go into freefall if they buy Shell NZ. Means another excuse to raise more capital from shareholders and bigger management fees for the managers and directors.