NWF - NZ Windfarms

[Well Endowed]

No prob - Yeah Mercury option could be a long shot, but if they're looking at a $1b spend as stated in the article, definitely enough in the coffers to pick up NWF.

Do you by chance know the detail of NWF's permit? (which allows for another 56 turbines). Could Mercury in theory bypass any potential resource consent process and look to expand on the area NWF has had approved? - Problem I guess would be their different type of turbines would likely void NWF's permit...

[blackcap]

No prob - Yeah Mercury option could be a long shot, but if they're looking at a $1b spend as stated in the article, definitely enough in the coffers to pick up NWF.

Do you by chance know the detail of NWF's permit? (which allows for another 56 turbines). Could Mercury in theory bypass any potential resource consent process and look to expand on the area NWF has had approved? - Problem I guess would be their different type of turbines would likely void NWF's permit...

Looks like the board resigned and a totally new board appointed...

https://www.nzx.com/announcements/335096

[Arthur]

Looks like the board resigned and a totally new board appointed...

https://www.nzx.com/announcements/335096

Interesting. Massive value destruction with the hedge implementation. Probably could have been a useful policy if done right, so it will be interesting to see if the new board keeps them going. The have suggested that it may actually be a gain this quarter.

[Well Endowed]

and interesting to see whether they continue the 'talks'/strategic review from October?

https://www.nzx.com/announcements/324926

[blackcap]

and interesting to see whether they continue the 'talks'/strategic review from October?

https://www.nzx.com/announcements/324926

Well I see two of the new directors have substantial holdings or interests in NWF so that is interesting in itself. I wonder how they get around the independence because you need 2 independents on the board for NZX rules. Or maybe Mark Evans is site manager of Kericrest Properties Ltd and not himself the owner of Kericrest Properties Limited. That would get him around those requirements.

As at 18 October 2018 these parties had the following amounts of shares and % holding in the company.

3 3 LET CAPITAL NO 1 LIMITED PARTNERSHIP 21002881 7.2911
4 4 PHILIP LENNON 16758000 5.8175
5 5 KERICREST PROPERTIES LIMITED 10844988 3.7648

LET Capital is the Chairman designee's interest, Phil Lennon is a new director and Mark Evans is site manger of Kericrest Properties Ltd.

So good shareholder representation on the new board. Hopefully it will amount to runs on the board (pardon the pun). I like this bit in the announcement “As part of the review process we have looked to streamline the management structure. We will
have two key senior executives who effectively manage the business - Warren Koia and existing
Group Manager Operations Adam Radich – reporting directly to the board. This will not only be
more efficient but it will also save costs.”

Seems to be the way forward, never understood why NWF needed a CEO as it effectively just receives $8m per annum in power income and then there are a few maintenance issues and that is it.

[Jantar]

I was very pleased with Toby Stevenson on the board. He has a lot of experience with the electricity market and a good understanding of the way the rules work. It is a shame to see him go. Now we have no board members with NZEM experience.

[JAYAY]

Interesting. Massive value destruction with the hedge implementation. Probably could have been a useful policy if done right, so it will be interesting to see if the new board keeps them going. The have suggested that it may actually be a gain this quarter.

Apparently some hedging was a requirement to guarantee certainty in order to secure the finance to purchase the transmission assets.
I have always regarded hedging the same as gambling, the House (Hedge Fund) always wins.
In the case of the electricity market the Hedge Fund couldn't lose given the certainty of power price increases, especially given the Government's mad rush to shut down oil and gas and promote renewables.
Question is, how often do we get to renegotiate the hedging terms?

[mfd]

Apparently some hedging was a requirement to guarantee certainty in order to secure the finance to purchase the transmission assets.
I have always regarded hedging the same as gambling, the House (Hedge Fund) always wins.
In the case of the electricity market the Hedge Fund couldn't lose given the certainty of power price increases, especially given the Government's mad rush to shut down oil and gas and promote renewables.
Question is, how often do we get to renegotiate the hedging terms?

More like insurance than gambling - evening out the companies returns. They pay for the privilege but reduce the chance of catastrophy, just like buying home insurance.

The last quarterly talks about their hedging issues, early this year they backed out of the ASX futures contracts and negotiated bilateral contracts, presumably with other power companies. This means they don't have to post cash margins, which may have caught the company out before. Hopefully the new policy will be more settled.

If there had been a certainty of power price increases, they would have been fully priced into the futures market. It is not helpful to criticise a hedging policy purely with the power of hindsight.

[JAYAY]

[QUOTE=mfd;

The last quarterly talks about their hedging issues, early this year they backed out of the ASX futures contracts and negotiated bilateral contracts, presumably with other power companies. This means they don't have to post cash margins, which may have caught the company out before. Hopefully the new policy will be more settled.

[/QUOTE]

Thank you for that.
PS It is not helpful to criticise hedging policy with the benefit of hindsight.

[Grimy]

Well I wasn't expecting a dividend to turn up today 😀