Sunday 28 December 2014

Sale of NTR’s US wind assets looks like best option for company

Published 05/09/2014 | 10:45

Nothing is agreed until everything is agreed, appears to the philosophy at energy group NTR.

This may be the most prudent approach when it comes to matters of business but sometimes other realities move at a faster pace.

NTR’s three biggest shareholders, Tom Roches’s Woodford Capital Group, One51 and Pageant Holdings, came to an outline agreement in late July on selling NTR’s US wind assets and using the proceeds to tender for a share buyback.

This would have seen One51 and Pageant sell their shareholdings and exit. Woodford would have stuck with the company and not sold back its shares, something that would have seen Woodford own most if not all of the shares in NTR.

However, a final and detailed agreement was not reached, so the plan was never put to the board.

In fact the plan was never discussed outside of the three main shareholders and the board when the investors wrote to directors informing them of how the talks had gone. Because no deal was finalised, small shareholders were not told anything about the talks, until details emerged in a Sunday newspaper.

In what NTR said was a totally separate development, it hired outside consultants to value the US assets and advise on future options – hold them, sell them or grow them. Speaking after the agm on Thursday, NTR chief executive Rosheen McGuckian said the company would have to wait until the end of that process before deciding what course of action to take.

Once again, that seems pretty prudent. But you wouldn’t have to be Nostradamus to figure out which of the three options NTR is opting for.

Chairman Tom Roche, all but announced the sale of the US wind assets in his agm statement. He said: “The current position therefore is that provided that the Board is satisfied with, and accepts the findings and recommendations of the expert advisors report, then the Board may commence a formal sales process for the US wind assets and complete a sale of the assets subject of course to achieving a satisfactory price and terms.”

So, the report recommends a sale and subject to the board not going directly against the recommendations of the consultants it hired, the US wind assets will be put up for sale.

NTR has not done anything wrong in its handling of this awkward situation with two big shareholders wanting out of the business. However, it could have been more upfront about telling all shareholders what is going on.

McGuckian told the Irish Independent that “having a public airing of particular views is not conducive and not supportive of the company.” Perhaps a full airing of all views among all shareholders on these very important topics was exactly what was needed.

Without newspaper reports on the talks between the three biggest shareholders, it is hard to envisage that any of this would have been communicated to small shareholders at the agm.

Yet look at what has taken place. The three shareholders representing over 70pc of the stock reached a broad agreement in principle on the sale of the company’s biggest asset followed by a tender to buy back shares which could have resulted in the privatisation of the company.

Furthermore, outside consultants have clearly recommended the sale of the US wind assets as the best option. 

The plan from Woodford, One51 and Pageant looks like it will happen. It is just a matter of time and price.

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