Infigen Energy Limited

 

IFN Details
 
Updates on UAC Takeover Bid, April’20 Production & Q3FY20 Performance: Infigen Energy Limited (ASX: IFN) provides Australian businesses with reliable and competitively price clean energy. It generates renewable energy from its own fleet of wind farms or from its portfolio of contracted assets.

Details on Takeover Bid By UAC Energy:In a recent press release, UAC Energy Holdings Pty Ltd, an Australian proprietary company that is owned by AC Energy Group (75%) and UPC Renewables Australia (25%), stated that it has acquired an aggregate interest in 12.82% of the Infigen stapled securities. This comprises a beneficial ownership of 9.90% of the Infigen stapled securities and an economic interest in a further 2.92% of the Infigen stapled securities via a Total Return Swap.

As per the offer, UAC intends to make an off-market takeover bid of $0.80 per stapled security, which implied a total equity value of $777 million for 100% of Infigen shares. The offer seems attractive, considering the recent falls in electricity prices, high debt servicing costs of IFN, suspended investments, deferred delivery of the development pipeline, and a limited track record of paying distributions.

UAC’s Chairman, Anton Rohner, also stated that the offer is well aligned with its strategy of investing in attractive opportunities in the renewable energy space and will provide IFN with access to capital and significant renewable energy expertise for its pipeline of projects.

The above offer, is however, subject to certain conditions, including the approval from Foreign Investment Review Board (FIRB) and the potential change of control provisions in Infigen’s debt financing agreements.
Response by IFN:On 3^rd June 2020, IFN released an announcement stating that the Board is considering its response to the Proposal and advised to take no further action based on UAC’s proposal or other any other document, until the Board releases a formal announcement. 

Monthly Production Update: In April 2020, production generated from owned renewable energy assets stood at 147 GWh, up 6% on April 2019 production of 138 GWh. Sales from owned assets stood at 143 GWh, up 8% on pcp sales of 133 GWh.


Unaudited Production Highlights for April 2020 (Source: Company Reports)
 
Third Quarter Highlights:During the quarter ended 31^st March 2020, the company reported net revenue amounting to $54.3 million, representing an increase of 17% on pcp. YTD revenue came in at $188.5 million, up 14% on pcp. On 1^st May 2020, the company informed that there has been no significant impact of COVID-19 on its usual business activities and it has taken the required safety measures to carry out operations as per the government’s guidelines.


Q3FY20 Sales Highlights (Source: Company Reports)
 
Outlook: In FY20, the company expects to sell 1.9TWh of its renewable energy generation. Asset operating costs for the period are anticipated between $50 million - $55 million and business operating costs are expected to be ~$25 million.Lower domestic economic activity and lower global energy prices are likely to impact merchant electricity revenues in FY21.
 
Stock Details: The stock of the company corrected by 7.81% in the last three months. In the past one month, the stock gave positive returns of 10.28%.Currently, the stock is trading very close to its 52-week high of $0.810 and has a P/E multiple of 12.29x. Based on the stock performance and other key updates covering the quarterly results, production update, and takeover bid by UAC Energy, we have kept a close eye on the upcoming developments with regards to the business and proposed takeover. The stock closed at $0.805 on 3^rd June 2020, up 36.441% on the previous day’s closing price.

 
IFN Daily Technical Chart (Source: Refinitiv, Thomson Reuters) 

Disclaimer

The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as personalised advice.