Peter Kennan presented his in-depth investment thesis on Elders – Hybrids (Australia: ELDPA) at Asian Investing Summit 2014.
Elders – Hybrids: Hybrids are the fulcrum security in what remains a distressed common equity (Australia: ELD) at Elders Limited, Australia’s oldest rural services business. Both Elder’s common and hybrids suffered significant declines in value as the company embarked on a disastrous diversification into forestry and five years of workout followed. Now, the hybrids are trading at A$21 versus face value of A$100. Face value of the hybrids is A$150 million relative to current ordinary market cap of A$50 million. Senior debt is not trading but is not impaired and any equity value upside goes first to the hybrids. Hybrids need to be converted to allow company to raise new equity. While additional equity capital is ideally required, there is very low likelihood of aggressive action by creditors and light at the end of the tunnel: forestry exit completed, other non core business sold, seasonal conditions improving, cost reductions are ongoing.
About the instructor:
Peter Kennan is Managing Partner and CIO of Black Crane Capital. He has 15 years of corporate finance experience across a diverse range of sectors and transactions with UBS Asia and Australia. With UBS, Peter was formerly the Head of Asian Industrials Group for UBS Asia, a corporate finance sector team covering energy, infrastructure, resources, consumer/retail and general industrial companies. He achieved number 1 team rating in Asia with revenues of US$400m in 2007, grown from just US$20m over a four year period. Peter was also the Head of Telecoms and Media sector team for UBS Australia specializing in M&A, advising on many large, complex transactions. Prior to UBS, Peter spent 7 years with BP in a variety of engineering and commercial roles.
Members, log in below to access the full session.
Not a member?
Thank you for your interest. Please note that MOI Global is closed to new members at this time. If you would like to join the waiting list, complete the following form:
About The Author: MOI Global Editorial Team
The MOI Global Editorial Team, led by John Mihaljevic, CFA, includes community builders, event organizers, writers, editors, research associates, security analysts, and fanatical member support advocates. Our sole purpose is to serve the members of MOI Global as well as we possibly can in order to help them learn, invest intelligently, and build lifelong friendships with like-minded people.
Who is MOI Global? In recent years, The Manual of Ideas has expanded to become more than simply “the very best investing newsletter on the planet” (Mohnish Pabrai). We are now a thriving global community of intelligent investors, connected through great ideas, thought-provoking interviews, online conferences, live member events, and much more.
Members of MOI Global enjoy complimentary access to a growing array of resources and content related to the art of intelligent investing. Members also enjoy preferential access to selected offline events as well as exclusive access to other events hosted by MOI Global, including the Zurich Project Summit, the Latticework Conference, and Ideaweek.
More posts by MOI Global Editorial Team