In today’s briefing:
- Origin Energy: Gas Price Cap Compromises Brookfield’s Offer
- Gujarat Ambuja Exports
Origin Energy: Gas Price Cap Compromises Brookfield’s Offer
- On the 10 November, Brookfield and EIG/MidOcean offered Origin Energy (ORG AU) shareholders $9.00/share, a 54.9% premium to last close, by way of a Scheme. The Offer is non-binding.
- On the 9 December, the Aussie government said it would take action to limit the worst impacts of the forecast gas price increases to protect Australian households, industry, and manufacturers.
- This includes a temporary price cap on new domestic wholesale gas contracts by east coast producers, such as Origin, for 12 months.
Gujarat Ambuja Exports
- Company holds pole position in corn starch processing in India with ~ 25% market share; but accounts for a significant share of industry’s profit pool.
- Further expanded capacity by 40% (1200tpd) just last week and another 25% expansion is planned for Q4FY24E, the 60%+ capacity expansion will drive volume led growth forward.
- Cost pressures (commodity, energy) to abate in FY24E. Formidable player, capital efficient business, cost leadership, net cash stature, low valuations(<10x PER, <1x EV/Sales), favors investment.
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