MEL - Meridian Energy

[Tony Two Gloves]

Question chaps, if this trades at say a 0.10 cent premium day one, will it be at $1.10 or $1.70 assuming $1.60 is the final?

[CJ]

Question chaps, if this trades at say a 0.10 cent premium day one, will it be at $1.10 or $1.70 assuming $1.60 is the final?

The installments are what will be traded and still have 60c payable on them to get the shares.

So a 10c premium would be $1.10.

You would buy at $1.10, pay 60c (assuming $1.60 issue price as the $1.60 cap only applies to those in on the IPO) in a years time for a total of $1.70.

[Tony Two Gloves]

Thanks CJ, I am Stagging this big time, $1.10 will work nicely, don't know if I would have the patience to hang around until the first div is paid.

[CJ]

Thanks CJ, I am Stagging this big time, $1.10 will work nicely, don't know if I would have the patience to hang around until the first div is paid.

Good luck - If I get my full allotment, I may sell a few as well.

[Snoopy]

The demarcation point between the generators equipment and Transpower equipment is on the upstream side of the transformers. So if a transformer flashes over Transpower fixes it and pays the costs.

Marilyn, I when I wrote what I did I was referring to page 86 in the Meridian prospectus, from which I quote below:

"The generator stators at the Waitaki power station are considered to be in imminent failure condition, but have been operating this way since 1992. A single non earth surge could affect more than one unit. Given the number of units there is spare generating capacity so a run to first unit failure mode has been adopted. Upon first failure the upgrade program for the generators will be initiated."

I wasn't very happy with that policy. If these units have been at imminent risk of failure for 20 years I would take one apart now and overhaul it. This would allow Meridian to see what was going on inside, and give a better insight into why the things just keep going. IMO there is a very real risk that all of these units could fail at once. I regard the declared maintenance program for these units as irresponsible.

Now getting onto the subject of transformers:

"The cooling oil in the transformers at Manapouri contains an anti-oxidising corrosive sulphur compound that is known to lead to the deposition of conductive copper sulphide on the winding insulation of the power transformers that may over time lead to transformer failure. This is an unquantifiable risk as there is uncertainty as to the level of deposition that may lead to transformer failure. Meridian has a programme to monitor the situation, replace the oil and continue monitoring the situation after the oil is replaced, in an effort to mitigate the risk of failure."

To me this reads as though Meridian is responsible for these transformers. I just wasn't happy reading this. If Manapouri is at risk of going down I would put a new transformer on site as a back up and have it ready to be hooked up as soon as the old transformer fails.

This whole section reads like maintenance by an accountant, being prepared to take any commercial risk to stretch out the life of equipment that really should be replaced, all in the interests of shoring up the float financially. Once you have a culture like this in a company I feel it will be difficult to eradicate.

SNOOPY

[percy]

[QUOTE=Snoopy;434159]

"The generator stators at the Waitaki power station are considered to be in imminent failure condition, but have been operating this way since 1992. A single non earth surge could affect more than one unit. Given the number of units there is spare generating capacity so a run to first unit failure mode has been adopted. Upon first failure the upgrade program for the generators will be initiated."

Nice to see Meridian using common sense.
Must admit I agree with this policy.

[Snoopy]

[QUOTE=percy;434161]

"The generator stators at the Waitaki power station are considered to be in imminent failure condition, but have been operating this way since 1992. A single non earth surge could affect more than one unit. Given the number of units there is spare generating capacity so a run to first unit failure mode has been adopted. Upon first failure the upgrade program for the generators will be initiated."

Nice to see Meridian using common sense.
Must admit I agree with this policy.

The policy is only sensible if there is sufficient lead time to fix the generator that fails before the others fail. If all of these generators are on a rotation cycle it is possible that all will fail together. The generators have been operating for 20 years in imminent failure condition. This alone suggests to me that Meridian don't know why they have kept going for so long, but have apparently been warned that they are in imminent failure condition and chosen to ignore that warning.

Perhaps the people charged with maintaining these generators don't have a full understanding of what is going on inside these generators either? The sure way to settle this is to take one apart and find out. If it all checks out, then the maintenance policy is wrong. If the maintenance policy is wrong it should be changed. If the service engineers are right though, that means Meridian has just been saved an unwelcome outage. Whatever the actual condition of those generators, the only sensible course of action is to pull one out of the loop, strip it down and check.

Whatever the actual condition of those turbines, I might be tempted to leave it if it were say a couple of years or even five years outside its design life. But these things have apparently been running on a knife edge for twenty years! I can't see how anyone could come to the conclusion that just leaving things be is good policy.

SNOOPY

[RTM]

I'm really not sure any of us have enough information to second guess the Meridian engineers and management.
Surely they will have done a professional job with a decent understanding of the risks. There are also probably external measurements they can do to be relatively confident that they are still running OK. Sounds like they were a good buy !

[percy]

[QUOTE=Snoopy;434167]

The policy is only sensible if there is sufficient lead time to fix the generator that fails before the others fail. If all of these generators are on a rotation cycle it is possible that all will fail together. The generators have been operating for 20 years in imminent failure condition. This alone suggests to me that Meridian don't know why they have kept going for so long, but have apparently been warned that they are in imminent failure condition and chosen to ignore that warning.

Perhaps the people charged with maintaining these generators don't have a full understanding of what is going on inside these generators either? The sure way to settle this is to take one apart and find out. If it all checks out, then the maintenance policy is wrong. If the maintenance policy is wrong it should be changed. If the service engineers are right though, that means Meridian has just been saved an unwelcome outage. Whatever the actual condition of those generators, the only sensible course of action is to pull one out of the loop, strip it down and check.

Whatever the actual condition of those turbines, I might be tempted to leave it if it were say a couple of years or even five years outside its design life. But these things have apparently been running on a knife edge for twenty years! I can't see how anyone could come to the conclusion that just leaving things be is good policy.

SNOOPY

The statement is very clear;
"Given the number of units there is spare generating capacity so a run to first failure mode has been adopted.Upon the first failure the upgrade program for the generators will be initiated."
Seems to me they have been '"well prepared" for 20 years.
Excellent long term common sense.!

[Newman]

Guess how many people applied for shares

Yesterday when I applied for Meridian shares I got a number of MEL696771xx. Today 1 hour before closing I got another number of MEL697881xx. Does the numbers suggest there were about 110000 new applications just in one day?