Member Info for parkside13

I'll check. Might teach me (again) not to trust an analyst. If it is capped at 29.9% then need to model that and the other loan (which I think is 29.9% too) then model impact rest in cash. But I checked the (basic) loan docs and there it says 29.9% as you described but analyst report def says unlimited dilution!! So need to check.

The equity value of GKO is nigh on impossible to ascertain. So many projects, non recourse finance and then they have the Dollar loan which is swapped into Rupees I guess. So the capital structure is messy too, compounded by these loans. I share your annoyance at the idiocy of the GEF loan but I can't believe they don't have a containment to the equity dilution, being a cash option for repayment. Surely to goodness they are not that stupid although I've heard they are pretty naive! Which might be the same thing in effect. But I guess (at least I hope) they are working on this and we aren't going to get hit with a "shocker" of an RNS saying that either we are being annihilated else they have come up with some other crazy quasi equity structure else they are just issuing equity and be damned. They own 35% of it so they should be motivated but my point remains about the LTIPs which are truly based on MW installed!! They or the Board can clearly be stupid!

Conversion is based on delivering a notional return of 16% to GEF and 18% to GIC with the number of ordinary shares issued at the price on the day of conversion being equal to a sum that would equate to this return. GEF gets no additional return beyond 1 July 2015 but for GIC the value of the conversion is likely to be maximised the longer the holding period all other things being equal (payment of a dividend might encourage early conversion). Conversion is subject to a minimum number of shares being issued. The minimums are 29,123,371 shares in the case of GEF and 44,861,538 in the case of GIC. There is no maximum number of shares that can be issued in the case of GEF. In the case of GIC, the number of new plc shares that can be issued is limited at 29.9%, equivalent to 79.2m shares. Any entitlement over and above this limit would simply remain unconverted as subsidiary shares. However GIC can convert in two tranches so that if it converted so as to result in a plc holding of 29.9% it could then sell some or all of these shares and then convert again subject to an overall limit of 49.0%. Any remaining holding in the subsidiary has no rights to any dividend or distribution and is therefore worthless. Additionally if conversion is left until the end point of 30 June 2017 anything over 29.9% is paid in cash. Think key to recover this is to try and buy out GEF for cash and the notional price could be say $106m. They might have the cash for this or sell assets. That might mean the shares rise and as they rise then they rise as the GIC loan becomes less dilutive. But GEF is key I think. Would they want control of GKO? I hope not!!

Lucky you!! I'm retired from fund management but still working as my wife wont let me stop as I'll go bonkers and so will she. Good luck with the printer.

And you believe anything GKO says? Frankly, and I say this with 25 years of managing unit and investment trusts, if you do you are deluded. GKO generally has focussed on MW targets. Its LTIPs are based on MWs in the ground not on profits as measured by say EBITDA or better ROE or EPS. That is not a way to align management and shareholder interests - even you might admit that. So that is why they continuously focus on MW targets, whether wind or solar. Secondly, their financing is incredibly risky for the Ordinary shares in that the GEF loan has a potentially unending dilution - the other at least is capped. Therefore when the shares are rising all is well but clearly when they fall that creates a big issue, as you are seeing. Also operationally it doesn't look so great; the last set of numbers were poor so whilst they sort of hit revenue numbers they totally missed at the level that might be expected to drive returns to shareholders ie earnings. I can accept that, to a degree, earnings are a bit meaningless as wind assets are not particularly earnings producing, at least in the early years, a result of heavy depreciation and finance costs eating into EBITDA but nonetheless the real measure - cash - wasn't that great either. Nonetheless, I think at this level they are worth a "punt" as if they get the loans sorted the numbers, as published by Arden and Cantors, sort of look okay. And generally Indians are alright engineers and modellers so you'd hope the projects themselves are reasonable. I'd also note the value of recent wind transactions in India although there is no direct read across as equity value depends heavily on wind resource, grid cost, PPA structure etc etc. So I do read quite a bit, I understand wind and value from wind projects and I understand the Company's balance sheet. What I do treat sceptically is anything management says.

You are delusional if you really believe GKO can pay a dividend given its straitened balance sheet and particularly the GEF issue. You also clearly don't understand the (possible) implications of the GEF loan to the existing equity. Anyhow, yes it is my only remaining equity holding only because I think there is value if they sort out the loan(s). That despite the lack of communication from management.

Spike to analyst and no results today as year end changed. So don't worry.

The operating results tomorrow will matter little. The main focus will be on whether they have done a deal with GEF to stem the dilution issue for the Ords. I worry more around this as the Chairman has not responded to e mails not only from me but, I'm aware, from institutions as well. They have also not RNS'd the results tomorrow and just generally give the impression either of a Board not well run or a Board that simply doesn't care. But we will see what they have done. I fear they simply may acknowledge the issue whilst not having yet divined a solution - which would be bad!

It's on tickerreport. 17th is Wednesday obviously. Be interesting!!

Not really negative but a possible what could happen! I've taken the view it won't or at least won't be terminal. We will see!!

Ok well in for a penny etc. Another barrow load!! Maybe Sanjeev Whaddacockup and his chums will come through next week. All equities now sold bar this one. All bonds sold and into cash. This six year bull run is drawing to a close.

No word yet. Rather depressing in truth. Might try the corporate guy Sunil Eesanasbeen who works out of downtown Jaipur.

Which is extremely poor as Keith Henry chairs it and he has some considerable experience. I know also that one of the analysts has tried to elicit some update but can't and so you are right it is utterly hopeless and the non execs need to get a grip.

I'm really not convinced this will do a breakout of its own accord until we get some news from Anil Peanutbutterjars and his merry men regarding whether we are going to be diluted into the middle of next week or not. Letters and e mails to the Chairman remain unanswered and so we will have to wait to see if they have managed to cut a deal. If they do and if the shares rise then I'm going to buy the Finance Director, Vasu Littlegoalongway a new suit and get him a decent haircut.

Not a great start to the week from Indian central. I'm assuming that no word has been received from Sanjeev Downabit in their IR department?

Hmm not sure that's going to work here. What will work is some positive news on the dilution. Once again note management/IR saying two weeks on the 14th and so far nada. Over promising and under delivering again and again.

They've been banging on about divis for two years and haven't delivered. I really wouldn't get too excited. They need to sort out the B/S then if they have surplus cashflow pay some out. But I feel they are too capital constrained to do that. In short they are a team who have vastly over promised but under delivered. Consistently over three years! Nonetheless the value is there if they can stop the dilution.

Rocket you really need to think about blithe comments re a dividend. The Ords could (could) be worth little if anything unless they get their capital structure sorted and to mention dividends at this stage is frankly ridiculous. Again if you have done any in depth research you'd recognise that you are being totally misleading.

Who knows frankly. The wording/grammar of the e mail is poor and for me it carries no weight at all. They need to make an RNS.

I'm also not sure why you are rehashing old LSE posts? I thought you'd done your own in depth analysis? In that context you'll understand the importance of the two loans particularly the GEF one.