Well, well, well – how’s this for an impressive start for GEV’s...

Well, well, well – how’s this for an impressive start for GEV’s first offtake to India?

Although IOC is much closer to its 52-week low than high, it’s still an ˜AUD27 billion company.

When was the last time you saw a company GEV’s size partner up with a $27bn company? And why do you think IOC would bother partnering up with a company GEV’s size with its technology still unproven?

Rest assured IOC have done their DD on the Optimum Technology and it has passed muster. MB has stated previously that ABS approval should be granted in the next few weeks. That will allay any fears that Optimum is not the real deal and open the door for serious institutional interest in the stock.

It’s also interesting, at least to me, that this will be GEV’s second offtake agreement after Uniper (only an AUD15.5 billion company) . Isn’t it amazing how LNG is YET TO CONCLUDE ONE OFFTAKE after all these years…

So now GEV has 2 offtakes with Tier 1, investment grade companies. This should make the ship financing process much easier and achievable at very advantageous rates.

Similarly, MB stated in an investor webinar that there were multiple potential deals being negotiated for India, so this is just the start of things in what is estimated to be the fastest growing economy in the world for at least the next decade.

It also wouldn’t surprise that this announcement – which has obviously taken longer than what MB anticipated (at least it was worth the wait); will be the impetus for the prompt conclusion of these other negotiations in India. Anyone with even a little business experience knows that most people/companies are followers rather than leaders, and now that a company the calibre of IOC has given its endorsement of GEV and Optimum with this deal, I anticipate that the other negotiations GEV have in India will reach a positive conclusion rather quickly.

To conclude, this deal is highly significant for GEV. The magnitude of the counterparty answers many questions as to why it has taken so long to conclude, but kudos to MB and the team at GEV for keeping their eye on the ball not becoming waylaid by a falling share price. Ultimately it is the fundamentals that will take GEV to a billion dollar plus market cap and MB is doing a great job lining up all the ducks in a row for GEV shareholders.

I believe that the remainder of the year (assuming no exogenous market shocks) will have people shaking their heads in disbelief when they see that they were gifted the opportunity of buying GEV at these bargain basement prices. Opportunity rarely knocks twice, but with GEV it surely has.