CDV’s directors, collectively holding of 6.37% of CDV’s ordinary shares, intend to accept the Offer. SGM has also provided an interim funding package of A$11.96mn via a placement of shares.
#Cardinal land company in mn full#
The next div could mean ₹9-10/share of Hindustan Zinc in terms of withholding – a full 5% of your position value. Pay attention to your tax regime and possibilities if you are long Hindustan Zinc.It doesn’t change things overall, just potentially jiggles the timing. The loan construct – which may involve a large HZL dividend – may affect things more than Travis had thought. The story has long been a US$2.5bn loan and perhaps offering terms to existing bondholders to lower covenants, but details were thin on the ground. For weeks the other Vedanta Resources funding story has been about how it would raise money to buy out Vedanta minorities.There is still a lot of room from here to there. If we think the RBB offer will be too high, and Vedanta will counter, Travis’d buy to a 20% discount to that counter. But how far? If we know Vedanta is willing to pay ₹150 in a counter-offer, do the shares need to drop sharply from where they are now? Travis Lundy thinks not. If they are willing to sell, but only at a high price, can the Promoter wear them down to ₹147.57? If not, what is the likelihood the Promoter accepts a higher price? Where does this fall if it breaks? This deal is “risky” because if it breaks because investors want to get ₹200 and the Promoter will only pay ₹150, it could fall post-deal. The question is whether investors are willing to sell at all.One expects that some of the combination above was an exercise of some of that skill (COVID-19 perhaps not, but the writedowns, the timing of the tax hits, of the special div from Hindustan Zinc, the timing of the Delisting Proposal, etc.) The promoter is cunning, and has been skillful in squeezing out minorities in other businesses.Going to 4x would get the stock price to ₹150/share. Even at the lowest combined de-constructed (pro-forma) EBITDA in years, the combined entity trades on a pro-forma basis of about 3x EBITDA. That impacted the stock price of the main asset – Hindustan Zinc. The company took a tax hit on dividends it did not receive, then took the dividend after the balance sheet photo.None of this is negative for the company given where things were on 31 March. As India comes off lockdown, volumes will pick up. All the commodity inputs are doing well at the start of this fiscal year from where they were written down to or indicated as of end-March. Other commodity prices are up since the fiscal year end. The oil price is up 60% since that write down. The company wrote down 22% of the book value of its non-Hindustan Zinc assets.The way this could unfold is a little complicated, involves the possible use of the Delisting Rules as yet untried, and there are discrete risk points (including Q2 earnings) between here and there. The stock price falling by half is a pretty good one. Vedanta Ltd (VEDL IN) (Mkt Cap: $5.5bn Liquidity: $42mn)īecause of the way that Indian Delisting Offers work (see Travis’ and Janaghan Jeyakumar‘s guide here), and the way opportunistic take-private situations work in general, it helps to have an opportunity. In Jardines: Holy Bargain Basements!, this was a clear Long JSH/ Short JMH trade.
I see JM at a 33% discount, which is historically wide.
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