NWF - NZ Windfarms

[blackcap]

Looks like a situation pre 2017 where Vector was part owner of NWF. They just ran it into the ground.

Not sure how many people are going to take up rights at a premium. Seems like a weird strategy. Good luck to MEL.

That said, if I were a NWF shareholder, it takes away some of the uncertainty about "who is going to pay for the regeneration" aspect.

[fish]

Looks like a situation pre 2017 where Vector was part owner of NWF. They just ran it into the ground.

Not sure how many people are going to take up rights at a premium. Seems like a weird strategy. Good luck to MEL.

That said, if I were a NWF shareholder, it takes away some of the uncertainty about "who is going to pay for the regeneration" aspect.

Just the opposite-new turbines standing well-above the ground and a gentailer buying in.
Hydro and wind generation are ideal partners.

[blackcap]

Just the opposite-new turbines standing well-above the ground and a gentailer buying in.
Hydro and wind generation are ideal partners.

Agree hydro and wind are good partners.

I am more concerned about the JV will be small change for MEL, just like it was for VCT. That can create its own problems.

Wind being unreliable is always going to be an inferior source of energy.

[fish]

Agree hydro and wind are good partners.

I am more concerned about the JV will be small change for MEL, just like it was for VCT. That can create its own problems.

Wind being unreliable is always going to be an inferior source of energy.

Small change for MEL agreed and that is also good-could be a step to a takeover in years to come .
Positive news for all

[blackcap]

Small change for MEL agreed and that is also good-could be a step to a takeover in years to come .
Positive news for all

I had not considered the T/O target. It does make more sense for MEL than VCT to take over.

Lets see how invested they are..

[Sideshow Bob]

Price is up 33% this morning to 16c.

[Walter]

The devil will be in the detail. Mel is making a capped contribution, will they pay 50/50? or will the assets that NWF brings - land, consents etc be fairly taken into account? At this stage it looks like they will be with assets transferred at above book value, if so, that is a good outcome.

[nztx]

How does this new deal anywhere near stack up ?

Cap Raise $ 12.7 M (MEL & existing holders Rights Offer)

Cap Cost $500-$600 M

There will be costs of running it, downtime while being repowered, likely large
financing cost at high or increasing interest rates, Amortisation / depreciation

NWF doesn't have much dough, Borrowings if from MEL would have a cost, as from
third party lenders.

Based on past production patterns at the site, these are all over the place.

Sales & realisations from production have been all over the place too

Is there intended a production take up agreement where MEL take all the generation
and at what sort of price ?

Security of take up & onsale has been a past issue, with large derivative gains & losses
and then the whole job at mercy of Mother Nature supplying enough puff first

Go back to when NWF started & initial IPO issue at $1 - all those investors were sold something
for them to put dough into this .. the best part of $100 M later where are they now ?

Does this have possibilities of a repeat ?

Why has MEL not gone for Take Out Offer instead if the real estate for a revitalised windfarm
appears that good to them ?

Current SP level may or may not offer a good take out positioning

[flyinglizard]

Current SP is lower than Median purchasing price and pro-rata renounceable rights issue price. Not much time to mark around, shot up shot up shot up.

[nztx]

Current SP is lower than Median purchasing price and pro-rata renounceable rights issue price. Not much time to mark around, shot up shot up shot up.



but then there is this:

https://www.nzx.com/announcements/420505



NWF will also undertake a pro-rata renounceable 1:8.5 rights issue of approximately 39.0m shares to existing NWF shareholders at a price of $0.155 per share (the same price as the Meridian placement), raising up to approximately $6.0m (Offer).

The Offer will be underwritten by Meridian up to approximately 28.8m shares (being up to approximately $4.5m).


Dont like the Rights deal ? .. fine - they get handed on a plate to MEL


(NWF must like MEL coming along stumping up more loot)



The Board is delighted that Meridian is prepared to become a supportive minority shareholder in NWF


The 15% MEL buy in pre Rights issue could turn into something else, post rights issue,
then a hop skip and a jump further down the track


No Div since Dec 2022 might be interesting weighing point for existing.. why throw more at it @ higher than Market ?


NWF Board could have just made it easier for existing holders - sell the assets in a new subsidiary to MEL
distribute the spare loot and then decide thereafter where the listed NWF shell goes or does,
seeing as strategy appears to be likely headed towards selling the NWF jewels off to MEL
one way or another .. Why else are MEL interested in getting in NWF .. it won't be to say hello
around the boardroom table a few times a year, if other prospectives are seen with NWF.


Lets face it anyone see NWF finding or falling on $500-600 M for the repowering as the picture so
far looks ?


That is unless Shane Jones's PGF gets a fresh breath to inflate any Wind Projects visible across
the Land .. ;)

[nztx]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NWF/420505/405783.pdf


The new wind farm is expected to cost in the order of $500-600m and will be funded by a mix
of equity and limited-recourse project debt. Subject to NWF arranging financial commitments,
the equity will be funded 50:50 by NWF (or a funding entity controlled by NWF) and Meridian.
If NWF is unable to fully fund its planned 50% share its interest in the joint venture will reduce.


So we see a 50/50, then this - if no dough for NWF's share, it's interest in project reduces

MEL is buying into NWF 15% .. but likely to change on underwriting - looking like MEL get to control the
JV job directly & indirectly - many thanks to the fare paying NWF holders

And MEL has 15 years Offtake .. probably a good thing.



Potentially NWF may come knocking further down the track looking for more equity from it's holders
still onboard..

MEL presumably wont be far away watching / waiting or underwriting the job .. like now

The white knight may get to run away with the silver platter, if the long suffering boys and girls
sitting as minority holders lose interest..

Potentially a MEL take out over time.


Sort of deals with finding a new home for a problem child, where the futureproof bills are
seen as high, existing pre-plan prospects were constrained, and contributors for those who stayed
from start wear scorch marks, many with reluctance to throwing more pennies in the pot ;)

Too early yet for the bods at NWF to be looking for new jobs ? :)


The scenario unfolding looks very similar to the trajectory of NZO & it's minority stakeholders

[Grimy]

Having been in since day one - but luckily with accumulation at sub 10 cents at times and then selling the majority of my holdings in the 20-25 cent range, I decided to exit completely yesterday on the news.
As NZTX has said, long time-lines, a lot of money required, rights issues and just general uncertainty as to how this will go is enough for me to watch from the sidelines, sitting on a small profit.

[flyinglizard]

I guess that they have no intention to sell the whole company. enjoy doing nothing with high salary plus huge consulting fee. However, you have to admit their PR networking and get big fish onboard. I am waiting the coalition government climate change policy announcement.

[Dassets]

This is a great deal for both NWF and MEL. It is also not a surprising deal. It reflects structural changes that are very long term, massive in proportion to the sector. Firstly this deal has very low risk(for botrh parties) and risk management is critical. For me the 9% IRR post tax is great and reflects the asset that NWF actually had. This view is also supported in the transfer value of the asset into the jv.

When you peal back the deal you see more value for shareholders. Implicit in the numbers is a big development pipeline. I guess they are going to spend between $20-30m on this the next 2 to 3 years. The equity they need to kick in for the jv build is so easy to raise at the deal metrics I wouldn't lose any sleep.

I don't hold any equity but there is a simple reason for that which will explain why. It is in fast-track also. Any guesses?

[shareman]

"I don't hold any equity but there is a simple reason for that which will explain why. It is in fast-track also. Any guesses?"

You're applying for consent for another wind farm?

I feel this is a good deal for NWF also, end of the day if you're going to do the repower, you need serious money (which if it doesnt come from shareholders has to come from somewhere) and the repower needs to be done to realise the full potential of the site.

So, end of the day, this is a good outcome for NWF holders

[Dassets]

Yes and via fast track

[Sideshow Bob]

https://www.nzx.com/announcements/421157

1 for 8.5 Renounceable Rights Offer Document

[shareman]

Yes and via fast track

If you got consent would you package and sell to someone like NWF ? They're pretty capital intensive projects