Hi Golong76, I will try and give a current overview of some developments in EWC, these represent only my opinion and views. Oddly enough I will start with the statements of 2 different analysts current that summarises the EWC conundrum. No1 "what they need is a new generation of suckers" No2 " regardless of the past and those who invested in it 10 years ago ,you now need to focus on what is being offered now not in the past"
On hearing of the current roadshow I thought like 10 years ago this was a preamble to a equity raise. I assumed from recent events ie Elliott paying out the convertible notes 2 years early at 50c from his own pocket that any raising would have to be at greater or equal to that amount. Given that they can raise up to 15% of issued stock without the need for a extraordinary AGM this would amount to a $120mill raising.
At the presentations it was noted that Elliott was quite relaxed about their financial situation and was quoted in a passing reference to not wanting to dilute shareholder value. People were also very impressed with Stuart Wilson's presentations and performance with financials ,valuations of assets current and future earnings. Notable points. EWC currently negotiating new / extension of Sengkang PSC . Even if they do not extend the LNG plant can be used as a LNG distribution hub.But for Indonesia to take over the power plant and to run it, would be more expensive than allowing EWC to operate it and collect taxes and royalties off EWC. Indonesian discussions are proceeding very well and because to LNG prices have fluctuated the price charged at the well head by SKMigas is being negotiated .
HERE IS THE KICKER only in the past few weeks the head of the Indonesian Stockexchange has approached EWC about possible interest in listing on the Indonesian exchange. Indonesian pension and sovereign funds can only invest nationally and require more local companies to invest in. The head of the Exchange reports directly to the Indonesian President. If EWC were to do so it would formally engage and nationally legitimize its assets and standing in Indonesia also allowing for favourable recognition for extensions renewal and expansion ( gas and power)of its Indonesian operations. Such a listing would require a local capital raising and stock to be held there ,thus minimizing the effect on current shareholders but releasing new liquidity from current capital assets.
Philippines is so close with moves already afoot for permits for further possible expansion given that the newly approved dedicated line connection to the new sub station can handle more than 2000MW load. The current site has the capacity for 5 LNG tanks with construction of the second underway. Each tank has the capacity of enough gas for 3000MW OR 3MTPA It is envisaged that it willbe used as a wholesale tolling plant for LNG offtake by 3rd parties. Singapore currently charges $65 per ton.
Asset valuations were discussed and highlighted with recent acquisitions in the area reflecting very favourably on its asset valuations. Stated with plant and equipment operational in 2years time a valuation of$4 billion , in view of recent acquisitions nearer $ 6 billion USD ie $ 7.5 billion AUD. Debt around $1 billion . Current market cap about $400 USD
Several funds large and small along with some high worth indviduals are giving due consideration. The point here is that the stock is tightly held 90% by the top 20 shareholders, it owes several of those more than 65cps. Last time someone wanted a large position in the stock (Chander) pushed the sp to 80c very quickly. The stock is now more tightly held, think anyone wanting a firm position in the stock would have to consider that position or entry via a equity raise. What the stock valuation is another story for another posting along with lots of other changes underway.
Whether you go with analyst one or two depends on your own analysis research and experience with this company . Nothing is certain until its done and history but due consideration may indicate the future. For your consideration Cheers Doc
EWC Price at posting:
31.0¢ Sentiment: None Disclosure: Held
(20min delay)
