MCY Mercury NZ ( MRP Mighty River Power)

[macduffy]

I don't think MCY will "go broke" over this issue but labelling it "green" is the fashionable thing to do, most MCY assets qualify, and it won't cost the company any more - or less!

[peat]

so ,,, MCY are not buying the power generating capabilities of TPW but they're buying the customers

and yet they havent been able to generate enough recently

???

[Snoopy]

so ,,, MCY are not buying the power generating capabilities of TPW but they're buying the customers

and yet they havent been able to generate enough recently

???

The wind generation assets of Trustpower were moved into Tilt when Tilt Renewables was formed. So Mercury has bought the wind generation assets of the 'old' Trustpower. The Turitea Wind farm (total capacity 222MW when North and South sections are finished) is under construction and a second windfarm in the same area is already consented. All these wind farms are close enough to the Waikato catchment to allow dovetailing between the two generation sources (Wind & Hydro). The Waikato river system effectively becomes the battery for a wind/hydro system. It is true that hydro generation from the Waikato catchment has underperformed this financial year. But that doesn't mean a long term strategy as described will underperform over many years.

SNOOPY

[artemis]

Let's not forget who is the majority shareholder. And that there will have been quiet chats to make sure the narrative is being correctly followed.

[trader_jackson]

not just a disaster for GNE, but a disaster for MCY as well - huge (and huge is an understatement) premium paid for what is really not much.

[Norwest]

not just a disaster for GNE, but a disaster for MCY as well - huge (and huge is an understatement) premium paid for what is really not much.

To put this into perspective.

MCY acquired their initial holding in TLT for $144M in 2018 @ $2.30 per share.
They contributed another $55M in 2019 @ $1.75 per share.
They received $55M from capital distribution in 2020.
Along the way they got a couple of divvies as well.

Ultimately they're only putting up another ~$180M to own outright TLT's current NZ assets AND their development options.

[Norwest]

I can see why they were so coy about it on the last analysts call, I knew they must have been very close to them getting this over the line, congratulations to the MCY team.

I haven't read all 97 pages of the SIA in detail, however from first glance it doesn't state anything about the requirements around pre-existing agreements, it only state's that TLT cannot enter into any further agreements.

When the PPA/DSA was signed for Waipipi its extremely likely that MCY had some input into them and would have factored a potential takeover and/or sale of assets into it. The way the SIA is structured MCY are absolutely in the driving seat over any PPA/DSA's.

This is massive for MCY and further cements them as the best gentailer listed on the NZX.

[bullfrog]

As a TLT shareholder since 2018, getting in at around $1.7, I have mixed feelings about the takeover. I'm disappointed that I'm loosing what I hoped was a long-term dividend earner, but happy with the price. Yes, MCY are paying a premium but as Norwest pointed out, they already have a substantial holding at a realistic price.

The company that's impressed me in all this is IFT. Yet again they make a tidy sum by playing their cards right.

[trader_jackson]

huge downgrade for MCY indeed... yet despite announcing a shock over 10% drop in guidance, the share price (despite being the most expensive in the sector with the highest Price to EBITDAF in the sector I believe) isn't even down 4%... bizarre

[mfd]

huge downgrade for MCY indeed... yet despite announcing a shock over 10% drop in guidance, the share price (despite being the most expensive in the sector with the highest Price to EBITDAF in the sector I believe) isn't even down 4%... bizarre

4% down seems a lot to me, for an issue likely affecting one year only, and related to weather and a power plant being down. 10% drop in guidance for one year, valuing over the next few decades, isn't a particularly big deal.

That said, it's not down enough for me to buy more yet...