More positive news from Infratil.
Now, if they can get the Glasgow airport freight trend sorted out then it will be a full house. But, MG Rover is just another example how manufacturing is struggling in the U.K.

Infratil says energy developments investment coming right
12 April 2005

Utilities investor Infratil has played a game of patience with its stake in Australian company Energy Developments - lifted last month to 19.9 per cent with the purchase of close to $40 million of shares.


Infratil director Lloyd Morrison describes the investment as one which "has not been that happy for us" - but which is starting to come right.

Energy Developments, of Brisbane, generates power from landfill gases and coal mine waste methane, in several countries and often in remote areas.

The sector has been re-rated upwards by the sharemarket because of the global interest in reducing greenhouse gases and the increased government funding of projects with that aim.

Two years ago, Infratil saw the share price of Energy Developments fall below $A1.80 ($NZ1.95), compared to the $A3.25 a share paid in July 2002 for its initial shareholding. Christchurch electricity lines company Orion bought a similar stake at the same time and both topped up at the lower prices to give an average of about $A3.03 a share.

Currency movements have worked against the investors but, by the time Energy Developments' share price recovered - it closed yesterday at $A3.94 - both investors were well in the money.

After the work that both investors had put into the company - with Orion's chief executive Chris Laurie taking the top job in Brisbane - it was a surprise when Orion said it was getting out.

Infratil increased its shareholding to 19.9 per cent from 13.6 per cent by paying Orion $A4 a share for a chunk of its stake.

Orion will clear up to $76 million and has said its profit from the foray will be about $16 million.

Orion - originally drawn into the investment by Infratil - is selling for reasons including debt reduction and a focus on investing closer to home.

Mr Morrison said he would have been just as happy for Orion to stay. "They looked to exit and we had to work out the best arrangement we could."

He describes the transaction as a "very good deal" for Orion.

Energy Developments reported a record interim after tax profit of $A12.1 million for the half year to December 31 and has a string of projects in the pipeline.

Infratil has a reputation for thorough research but, looking back, Mr Morrison said it had not anticipated some of the problems within the company when it invested.

"We weren't given a clear picture of what was happening and we were not happy with that. The type of disclosures did not provide a fair picture."

Infratil believed the core business was worth more than the price it paid back in July 2002.

This discounted any value on the then Swerf project, designed to convert domestic waste into electricity.