Infratil buy Kent International Airport
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Kent International Airport.
This used to be RAF Manston and one of it's roles was to provide an airfield for aircraft in trouble to crash at.
If a plane full of tourists had a dodgy undercarriage etc then it was sent to Manston to spread itself all over tarmac there instead of bringing Heathrow to a halt, the RAF fire school was there to provide plenty of fireman to clear up the mess. I presume that this role has been dropped.
Anyway it is one of the reasons why the runway will cope with the biggest jets.
Infratil seem willing to invest GBP17m upfront and another GBP8m(?) in the near future on assets. I think that is a good buy if you have a fully functional civilian airport. Additionally they are expecting to lose upto GBP10m over four years before they turn a profit. Getting freight flights pronto in is a pretty useful idea.
Obviously they think they can do well in the long run out of this and I see it has a better use of money than a share buyback.
As a shareholder for the long term I certainly hope it works out well :)
Paper Tiger
From a practical point of view, a couple of people flew out of Kent airport from my work last month on trips to Europe. They said that it was a great airport and are all for Infratil taking it forward.
Its all set up, just needs the right coy to take the next step.
First thoughts are it sounds incredibly cheap to buy an asset like that in that location at that price.
Interesting the SP has dropped, I think it's because of the instant gratification factor as it will take a few years to generate income onto the bottom line, however they are a very good long term asset manager and have consistently added value at around 20% p.a which is pretty good.
They can probably leverage value based on their experience with Glasgow.
I wonder how far along they are with talks with Ryanair etc or whether they are gonig to focus on freight at the start.
Is IFT looking to become a specialist airport operator? This seems to be whether they are focusing their energy while raking in the cash from Trustpower.
People may want to hold B Options in this one like I do.
I have switched from the shares to the B options recently (about 4 weeks ago bought at 91 cents) as they appear to provide a better long-term return and allow me to minmise the cash tied up in this investment.
At 96 cents and with conversion payment of 350 cents in 4 years and current SP of around 386 this translates to a low 3.7% gain per annum in the SP to break-even.
Something to consider for long-term holders (4-years) who want to minimize their cash investment with some fairly low risk leveraging.
Austral Pacific.................. interesting from IFT.
IFT27/09/2005GENERAL REL: 1626 HRS Infratil Limited GENERAL: IFT: Infratil to Acquire 11% of Austral Pacific INFRATIL TO ACQUIRE 11% OF AUSTRAL PACIFICInfratil has acquired 2.456 million shares in a placement by the NZX listedcompany, Austral Pacific Energy Limited ("APX"). Infratil's total investmentis US$6.14 million. Infratil's shareholding in APX will be approximately11%. The placement price was US$2.50 per share (NZ$3.60).Infratil will also receive 1.228 million unlisted warrants as part of thisplacement. The warrants entitle the holder to acquire an additional share inAPX at US$3.50 per share anytime within the next year.APX is Infratil's first investment in the upstream New Zealand oil and gassector.Dr Bruce Harker, Executive Director of Morrison & Co said "APX provides someupstream exposure for Infratil to New Zealand's tight gas supply market. Ithas a number of prospective exploration opportunities, predominantly inTaranaki, and is well placed to grow its portfolio.APX is complementary to our existing energy portfolio, although we expect ourtotal upstream exposure to remain modest in relation to Infratil's totalinvestment in the energy sector, principally through TrustPower and EnergyDevelopments."
Also very interesting given that IFT management have made conservative low risk investments in the past. Does IFT know something that we do not.
As I recall their investment in (unsure of name ? Possibly "Energy Developments" ) was a looser for them, not sure if they are still holding or they have got out now. So following there picks is not a gauranteed strategy.
Kura
Are you joking......... take a look at Energy Developments share price. (ENE on ASX)
IFT got that one 100% right.
Interesting: APX have several wells with gas and/or oil that are being tested.
I must admit that at the moment I am surprised by this investment.
Also as part of the deal IFT have been given warrants to buy Austral Pac shares at NZD 5.16 within 12 months.
At current price of NZD 3.60 it is surely a very very long shot.
Infratil enters exploration arena
28.09.05
By Chris Daniels
Infratil is moving on "upstream", saying it has invested in an 11 per cent stake in oil and gas explorer Austral Pacific.
Austral Pacific has sold the shares in a placement, with Infratil buying in at $3.60 a share, investing just over $9 million.
Its shares have traded on the NZX at prices ranging between $3.80 and $4.30 this year. Infratil is also getting 1.228 million unlisted Austral warrants as part of the deal. These allow it to buy additional shares in Austral Pacific at US$3.50 ($3.66) each any time in the next year.
Infratil's energy investments are its 35.2 per cent stake in TrustPower, the fifth-largest power company in New Zealand, with a generation business and retail customers. It also has a 20 per cent stake in an Australian green energy producer, Energy Developments, and a share in Victoria Electricity.
This is its first foray into oil and gas exploration, known in the energy sector as the "upstream" part of the business.
Company founder and Infratil chief executive Lloyd Morrison said in August that there was little scope left in New Zealand for new Infratil investments, with further infrastructure privatisations off the political agenda of both major parties.
Infratil's recent investments have been in airports, with it spending $46 million buying Kent International Airport in Britain.
Infratil's share price has increased this year from a January low of $3.29 to a high of $4.15 in mid-August. It shares closed yesterday up 2c at $3.86.
Austral's home listing is on the Canadian TSX exchange, and its shares are also traded on the AMEX board and the NZX.
Talk around its Cardiff deep gas exploration well has been positive for some time, despite final testing of gas flows yet to be completed. It is the field operator, with state-owned energy company Genesis owning a 40 per cent stake in the project. Genesis wants gas from wells such as Cardiff to burn in its power stations.
Bruce Harker, executive director of Infratil's management company Morrison and Co, told the stock exchange to expect the company's exposure to the upstream sector to stay modest.
"The recent lift in New Zealand gas prices are likely to be sustained and this should allow profitable development of smaller onshore gas fields."
Infratil also believed that the Government would increasingly pressure permit holders to meet their indicated exploration plans and that this would result in smaller exploration companies seeking additional capital. This would "provide acceptable entry pricing for investors".
Crown Minerals asks companies to bid for the right to explore for oil and gas. Explorers do not pay a lot for the permit, but the winner is the one that promises the most work, usually seismic research or drilling.
This is where the big drain on resources happens, with explorers looking to "farm out" stakes and bring in partners to help pay for expensive drilling programmes.
"Infratil would look to support Austral Pacific should it require capital to maintain its interests in successful discoveries as these move from exploration to more substantive long-term production infrastructure investments," said Harker.
He also said that in the short term "no specific linkages are seen between Austral Energy and Infratil's other New Zealand energy sector investment at TrustPower".
* Infratil chairman David Newman, who is also chairman of Austral Pacific, was excluded from taking part in its consideration of this investment, said the company.
Hey mon, Dave New-mon, mon, is chairman of both IFT and Austral mon. Maybe he thinks Austral's Cardiff gas field will come up trumps mon.
Sorry Toddy, last time I looked was a few years ago, and they were definitely out of the money back then, I have recollections of the SWERF project of ENE nearly sending the company under.