HPWR RESUS ENERGY - REPURCHASE OF SHARES

Gainer · 1 HPWR RESUS ENERGY - REPURCHASE OF SHARES Wed Jul 15, 2015 11:11 pm

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HPWR RESUS ENERGY - REPURCHASE OF SHARES

4 Shares for every 7 Shares held , Repurchase at 24.00 http://www.cse.lk/cmt/upload_cse_announcements/3381436962942_.pdf

Last Financial Report 680 Million Rupees Cash in Hand http://www.cse.lk/cmt/upload_report_file/881_1432896882736.xls.pdf

How is my calculation about HPWR
http://forum.srilankaequity.com/t39674-hpwr-capital-gain-531-million-sold-out-subsidiarie-company-of-heladhanavi-at-531-million

kuma524 · 2 Re: HPWR RESUS ENERGY - REPURCHASE OF SHARES Thu Jul 16, 2015 12:35 am

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Chinwi · 3 Re: HPWR RESUS ENERGY - REPURCHASE OF SHARES Sat Jul 18, 2015 11:53 am

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So they are going to distribute millions in their pockets to shareholders buying back % of shares they have.

Is this good or bad to remaining shares with empty pockets ?
Keep them / accept the offer or sell in market ?

This is a good opportunity learn and earn.

Chinwi · 4 Re: HPWR RESUS ENERGY - REPURCHASE OF SHARES Mon Jul 20, 2015 11:04 pm

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Few months ago a consortium of ACL Cables PLC , NDB Capital Holdings PLC and Trydan Partners (Pvt) LTD paid Rs. 1681 million to own 75% of Hemas Power , now Resus Energy PLC, @ 17.90 per share.

After the selling of the thermal plant and with a proposed capital reduction now HPWR is going to repurchase 57 % of the issued shares @ 24/- per share. .

This means the above three parties will get 1288 million back to their coffers.
Their new cost of holding HPWR will be just 393 million Rupees. (figures- approximately)

stockback · 5 Re: HPWR RESUS ENERGY - REPURCHASE OF SHARES Mon Jul 20, 2015 11:29 pm

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Chinwi wrote:Few months ago a consortium of ACL Cables PLC , NDB Capital Holdings PLC and Trydan Partners (Pvt) LTD paid Rs. 1681 million to own 75% of Hemas Power , now Resus Energy PLC, @ 17.90 per share.

After the selling of the thermal plant and with a proposed capital reduction now HPWR is going to repurchase 57 % of the issued shares @ 24/- per share. .

This means the above three parties will get 1288 million back to their coffers.
Their new cost of holding HPWR will be just 393 million Rupees. (figures- approximately)

yes. clever people.

I think its effect for Net assets. then stock price will be drop after this net assets will be around 10.

I hope stock price drop to 15 level. stock price going up with performance

Chinwi · 6 Re: HPWR RESUS ENERGY - REPURCHASE OF SHARES Tue Jul 21, 2015 11:15 am

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stockback wrote:

yes. clever people.

I think its effect for Net assets. then stock price will be drop after this net assets will be around 10.

I hope stock price drop to 15 level. stock price going up with performance

Yes. Net assets after the change should be around 10.

That means we should accept the offer and sell @ 24/- and then buy at lower prices ?

Stock price will go up again definitely with the performances in 2016.

Chinwi · 7 Re: HPWR RESUS ENERGY - REPURCHASE OF SHARES Fri Jul 24, 2015 12:16 am

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According to the communique received by the shareholders HPWR is buying back shares to distribute excess cash to shareholders. (para 1)

As per the 2nd para, they are going to get loans from banks through subsidiaries to find a part of money needed for this buying back.

What is this?

First they say they have excess cash. Then in same paper they say they need bank loans to 'create' this excess cash.

Mad

stockback · 8 Re: HPWR RESUS ENERGY - REPURCHASE OF SHARES Fri Jul 24, 2015 1:47 am

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Chinwi wrote:According to the communique received by the shareholders HPWR is buying back shares to distribute excess cash to shareholders. (para 1)

As per the 2nd para, they are going to get loans from banks through subsidiaries to find a part of money needed for this buying back.

What is this?

First they say they have excess cash. Then in same paper they say they need bank loans to 'create' this excess cash.

after this. I mean "HPWR is buying back shares" share price will be fall below 15.

if they got 1 Billion Bank loan then they are costing nearly 90 Millions interest in one year

after re-purchasing shares. total number of share will be 53 millions. that means they are losing nearly 2 earnings per share for interest

i dont understand this why they are not going with 2/7 rather-than 4/7

maybe they have risk. thats why they do like this.

glad · 9 Re: HPWR RESUS ENERGY - REPURCHASE OF SHARES Fri Jul 24, 2015 5:39 am

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What will be the total number of shares after the buy back and why do you think the price should drop. I think the shareholders will be better off accepting the offer rather than declining it.

Chinwi · 10 Re: HPWR RESUS ENERGY - REPURCHASE OF SHARES Fri Jul 24, 2015 8:53 am

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They have 125 million shares in issue.
After the buyback there will be 53 million shares. This is good for remaining shares and their holders only if they do it with real cash they have. EPS and ROE will go up rapidly.

Normally when a company buyback shares considering its Asset value, NAVPer share remains same. Because number of share in issue will be reduced to balance the formula.

Here, with HPWR, M/s Earnest n Young , auditors, says the fair value of ordinary shares of Resus Energy as at June 30th 2015 can be concluded to be in the range of LKR 23.60 to 26.70 per share. Therefore the offer price of LKR 24.00 is fair.

They or NDBIB do not give any figures in detail how they got that value.

This is not Net Asset Value of HPWR. It is a fair value higher than asset value obtained by considering market multiples, trading history etc.

When they pay highly priced fair value to buy back shares , the asset value of remaining shares go downwards.

To find cash for the payment , they are proposing the following method:

They have 531 million in cash came from Heladhanavi sale.
Subsidiaries are paying 642 million dividend to HPWR.
Subsidiaries are also buying back their own shares from HPWR and they pay 367 million to HPWR as consideration .

The communique says the subsidiaries are paying above cash to HPWR by obtaining credit from banks.
That means they get bank loans to pay dividend to mother company . They do not give how much they pay from retained earnings and how much from loans.

If you consider Group accounts this is just creating outside debt and siphon off that money .

Holders of remaining shares will have to take the burden of paying back loans.
They (HPWR) hope to do so from future hydropower earnings.

මෙයට යම් තරමක් සමාන දෙයක් මල්වාන දෙකටන පැත්තෙ රඹුටන් ගස් තිබුන මහත්තයෙකුත් කලා. ඔහු ගෙ රඹුටන් වත්තෙ සියලුම ගස් ලබන කන්නෙ සඳහා බදු දීල ලක්‍ෂ 8 ක් ගත්ත. ඊට පස්සෙ මිනිහ පත්තරේ දැන්වීමක් දාල වත්ත මිලියන් ගානකට විකුනල මාරු උනා. අලුත් අයිතිකරු ඊළඟ කන්නෙ අස්වැන්න ගන්න ගියාම තමයි දන්නෙ ඒ ආදායම කලින්ම අරන් ගිහින් කියල.

ඒ වගේ HPWR අනාගතේ උපයන ජලවිදුලි මුදල් වලින් යම් ප්‍රමානයකටත් වෙන්නෙ පරණ කොටස් වලට ගෙවපු සල්ලි වල ණය පොලී ගෙවන්න වැය වෙන එක.

glad · 11 Re: HPWR RESUS ENERGY - REPURCHASE OF SHARES Fri Jul 24, 2015 10:14 am

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C
Tnx for the info.

Chinwi · 12 Re: HPWR RESUS ENERGY - REPURCHASE OF SHARES Fri Jul 24, 2015 6:42 pm

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stockback wrote:

after this. I mean "HPWR is buying back shares" share price will be fall below 15.

if they got 1 Billion Bank loan then they are costing nearly 90 Millions interest in one year

after re-purchasing shares. total number of share will be 53 millions. that means they are losing nearly 2 earnings per share for interest

i dont understand this why they are not going with 2/7 rather-than 4/7

maybe they have risk. thats why they do like this.

They put money to buy the cash cow and the bull. Sold the bull to maskade and now in a hurry to milk the cow to the last drop .

As per last balance sheet asset value of its subsidiaries was 1.3 billion LKR. 504Mn LKR Pan Asia investment is separated as associate .
Without considering income after last report , New Asset value is 1800,000,000 . New Liabilities 1,000,000,000.

Proposed Net Asset Value = 800,000,000 / 53,000,000 = 15.00 LKR
Current Net Asset value = 2,386,000,000 / 125,000,000 = 19.00 LKR

Profit last year 304,000,000 / 125,000,000 = 2.40 PerShare
if with new shares 304,000,000 / 53,000,000 = 5.73 PS - 2.00 interest cost = 3.73 PS
(approx vals)