Member Info for Hounddog10

Also there should be no leakage on IPO discussions - it is clearly price sensitive. I will have a think about complaining to Investec or the company but will likely get the brush off. I am in court today on the Lloyds litigation where one of the (many) matters the claim is testing is management assertions outside formal documents.

No it�s 75%. Kailas has 60% and Capital Research, PAM and Osrano (Caparo) 25%. 25/85 is 29% - enough to block. So Kailas is going to have to get those guys on board to delist. Why would they, like any minority shareholder, vote for it?

I was trying to get my mind around the delisting implications. I doubt they have decided exactly what to do. Firstly, I would be a bit surprised if they delist prior to relisting in India. Secondly, Kailas and some big institutions have stakes in topco and I find it difficult to think they want to be stranded in an unlisted entity. Thirdly, without checking Indian listing rules I would be fairly certain they would need to go off the back of audited 2017 full year as 2016 is too old. I expect those results to be good. It was always my fear that they would drag it off the market once it reached an inflection point. These issues must have arisen on the companies Monk and Eddie mention - so it would be interesting for the views of others. I can�t remeber how many votes you need to delist - probably 50% (ordinary resolution); if so Kailas can do that by himself and possibly do things outside Panel protections (although I seem to remember Panel rules also govern any company that has been a plc in the last ten years).

Yes that was the point I was making. If it was a loan for a property purchase one would expect it to be in one go.

They have done this before (about ten years ago) and no dividends eventuated. This time around I am more optimistic. It costs quite a bit to do this (I think c£100k last time) as you have to go to Court. There is no other reason I know they would be doing this but to clear the way for dividends.

Oddly it looks like the loan was in tranches.

I agree with your posts 4kandles. The worrying point is not so much the loan itself, which is being dealt with, but is there anything else. I had long suspected he ruled the company with an iron rod and this confirms it. I had always drawn comfort that, as the largest shareholder his interests were aligned with the other shareholders. The problem is he is the company. The non execs have done a good job - so often toothless.

Not so good but I guess shows the non-execs doing their job.

Thanks 4kandles. My reading of the cashflow is that the outlook on being able to pay their interest is positive. There is now a comfortable margin of operating cashlow ($83m) being above interest paid ($67m). Operating cash flow very close to EBITDA. I can see them being self financing by end next year at which point interest costs should start to drop. One odd point in the accounts is that the recent refinancing is sort of explained at the end of the results and it seems to involve taking on/replacing about $250m of debt at c15%. In part this replaces debt of 12%. I wonder why they have not explained this better. I had expected the refinancing to be at much lower rates. I may be reading the note wrongly - it is a bit mangled. Generally, their explanation of their borrowings is poor. I think most of their borrowings are at floating rates but it is not absolutely clear.

OK although I had expected a small profit rather than a small loss. Pity no mention of second half trend or exactly what the latest refinancing meant. I fear the share price will drift until year end results.

My apologies Monkf6. I dropped away from this board for a month for specific reasons. Thank you for your 14 July post which was very informative. My two main concerns are that they will take on uneconomic projects in the rush to grow and they may run into a problem with debt. However, they have a large corpus of projects where the tariff was fixed prior to a more competitive environment and the debt looks entirely manageable. Indeed it looks as though they should be able to refinance some very expensive 12% debt next year. Nearly all their debt is floating I think (accounts not very informative on this) and Indian rates are declining and forecast to decline further. The DISCOMs are an issue which I watch quite carefully - but they seem to be paying and as MYT point out they are diversified by State. The mystery remains the share price and someone willing to sell which I think makes everyone think they are missing something. I think there is a variety of issues here. India being one. Another is track record; 2015 was a bad wind year so loss, 2016 they refinanced which led to a small loss and it was ramp up year which was not in time to catch the wind season and new accounting. All this has made the results very difficult to follow. However, these issues are falling away. The benefit of the refinancing and lower rates will start coming through, last year's ramp up will be fully in this year's results, solar will balance wind seasonality and importantly gearing should start to fall as profits are made albeit reinvested. I expect the half year results to show a modest profit (say $5m) although it may be more with the new accounting which seem to recognise construction profit on projects being built.

Thanks Monkf6. I should say my revenue calculation was a crude one. Last year was $120m. Opening MW c540, end 1,000. So I guessed on a fully loaded basis (much of the new capacity would have been ramping up to full load) average 750MW last year. So 1,000MW a third higher - $160m. I would be interested in your and others view that the turbines are now being depreciated over only 15 years (see accounting policies). Do they really only last that long or is there an assumption of replacement by bigger and better ones?

I agree that the Mail article is an absolutely useless piece of analysis but amazing what it can do. The herd is joining us. I was looking at the accounts over the weekend and I reckon on the 1,000MW, they have at the moment to pay $100m interest per annum but should generate $150-160m per annum of power revenue. In other words they should clear each year $50m plus. This appears to be similar to their annual repayments on loans. At a rate of c10% that means interest drops by $5m per year and profit increases by that much. According to Bob they are tidying up their complex mezz financing. Also next year some expensive 12% $100m bonds mature and they should be able to refinance those more cheaply. Frustratingly they do not disclose the average rate on most of their borrowings but they seem to be variable because there is the usual disclosure that ifIndian interest rates drop by 1% that makes a $7m difference. Indian rates are falling as inflation abates. Looks like at the moment the force is with them.

This Irish wind company led me to an existing listed company from the same stable that I did not realise existed - Greencoat UK Wind. NAV £800m, market cap £880m, debt £100m, PAT £61m and 400MW installed capacity. Dividend yield over 5%. They buy into existing wind farms or get someone else to build them. I only had a quick scan but I was trying to work out why profit was so much higher. I presume it must be better prices (incl subsidy) but also in terms of the cost of building the wind farms bought much lower interest cost. Anyway, the market cap is basically at a bit of a premium to NAV and on a sensible 15x p/e. Interestingly they also disclose a Gross Asset Value, which appears to be a DCF valuation. That is in line with market cap. Something MYT may want to look at. MYT trades at a discount to its £55m NAV, has no profits yet to do a p/e but will be miles under its DCF. It is also much more heavily geared than Greencoat UK which has a policy of max 40% leverage. I think there is quite a big discount for that leverage. Monk, I was trying to find ReNew that you mentioned. If it a LSE stock and please could you let me know its ticker. Many thanks.

Thanks for your posts Monk - interesting points. I see today Greencoat Renewables is about to admit to AiM. Irish wind plus moving into solar. Current portfolio 137MW (aiming for 4.3GW by 2020). Run by bankers, looks like purchase rather than develop strategy. And anticipated market cap? 219m !! Anyway may do us some good having a comparator on AiM.

I guess the other point is whether they could do a Fusionex and simply delist or otherwise circumvent Blue Book rules. As you know 75% is the key voting threshold for delisting. Ravi owns a bit over 50% and Esrano 20% or so - just under 75%. You may remember the company was originally called Caparo Energy. It was named that way because a significant investor was Caparo Industries and it was felt that Caparo was a good name in India. Caparo Industries was an Anglo-Indian company owned by the Paul's and run by the son Angad Paul. Esrano is his investment vehicle. Fairly shortly post IPO the name was changed to Mytrah and Angad Paul left the Board. I think there was possibly some falling out but anyway Caparo seemed no longer to be involved operationally. Angad Paul sadly committted suicide in 2015 after Caparo Industries went into administration. My guess therefore would be they would not necessarily act with Ravi. Overall therefore I would hope that we cannot easily be delisted and that we would get the protection of the Blue Book if an offer is made.

Monk, many thanks. I agree with you there are differences and I have looked at it a bit more carefully. I know quite a bit about GKO because I was fortunate to do very well on that, catching the bottom more or less and doubling my money in a very short space of time. I am pondering whether to put more in here but I am already heavily committed and heavily underwater. I would probably be diving in here at this price otherwise. GKO signed up to two bits of mezz finance - the problematic one being the one with GIC, the Singapore sovereign wealth fund. Unbelievably this had only a cap on the price of the shares they were entitled to under the implicit option in the mezz lending but no floor price. The effect of this was that if the share price fell sharply they could dilute existing shareholders out of sight when the option became exercisable. Simon Thompson at IC spotted this and wrote about it triggering a sharp decline in share price. Of course as the price falls it becomes a sort of death spiral. Anyway it sort of bottomed out at 45p or so and GIC eventually made an offer of 98p. Having researched it quite diligently I felt that although GIC had a lot of leverage under Blue Book rules the situation was not quite as extreme as suggested (as you are suggesting here how much downside was there) and took a punt. I was rather annoyed GKO was taken out because I felt it was about to achieve escape velocity. Would be interesting to see how it is doing now. MYT do not appear to have this problem. However, it is worth noting that they do have instruments which do convert into shares (cannot recall at what price) and could dilute shareholders but up to 30%. However, I think the strike price of those arrangements is generally way above the current share price so not an immediate concern.

I should say that I am expecting $5-10m pretax statutory in first half and $15-20m full year. If so a p/e of about 4. It is worth seeing what IC say on these results (although that can be the kiss of death). They have consistently tipped MYT in the past.

Thanks for your posts Monk and SP7. If it's any consolation my average price is c50p odd. I thought it was cheap then. The share price is mystifying and Monk has identified all the various points but I will add a little. I think the company comes across as making not much profit with huge debt. It's profit last year was an underlying number. Combine that with the massive ramp up and accounting policy change makes the 2016 financials very difficult to appraise. The herd probably look at profit and p/es rather than ebitda or cash. The institutions may find it difficult to build a worthwhile stake given tightly held and their mandates may not permit investment. I also think the China frauds on AiM may be impacting. The main concern I have is it being taken off market like Greenko or worse Fusionex style before the value is appreciated. To put it bluntly Asian comapnies are not the best at worrying about UK minority investors. My concern is mitigated by the fact Ravi is London based, he is very driven (I have met him a couple of times) and has an international perspective (Stanford MBA).

More or less as expected on the old basis but new accounting needs to be digested further. No mention of IPO, refinancing or operational performance in 2017. Very strongly cash generative. If they stopped building now they could pay off their debt in 7 years or so.