Eredene Capitalwww.eredene.com TICKER: ERE EXCHANGE: L
Eredene Capital PLC ('Eredene') is an investment company specialising primarily in infrastructure (the movement, treatment and distribution of goods, whether imports, exports or internally generated) in India. The company has investments in three critical areas: Ports and port related activities. The company's biggest commitment to date is as part of a consortium to develop and operate the new container terminal at Ennore. The company's current deal pipeline is also heavily accented towards ports, including bids for privatisation projects in: Mumbai Port Trust (break-bulk cargo), New Mangalore Port Trust (containers), and Jawaharlal Nehru Port Trust (containers). Eredene is also involved in container freight stations and inland container depots, with revenue producing investments in Chennai and Pipavav, and is building on these with follow-on investments in Ennore and Baroda. It is also involved in logistics parks and third party logistics, with investments in Haldia, Kalinganagar and near Delhi. It raised an additional £30 m of equity from its shareholders in early 2011.
Eredene is an investment company specialising primarily in infrastructure in India.
In the last twelve months Eredene has expanded its r.each substantially, with a major emphasis on investment in the high growth port operations sector, adding to its existing infrastructure investments in container handling, third party logistics and logistics parks.
In May Eredene raised a net £29.5m providing not only funding for the massive Ennore project but also a solid platform for further deals.
On adjusted numbers we set a fair value of 25p per share, well above current 17.5p level.
Eredene's successful bid for the new container terminal at Ennore has established its credentials as a new entrant to India's burgeoning port sector, as has also its investment in Ocean Sparkle.
We maintain our short to medium price target of 30p per share for Eredene (on existing issued capital). This is based on our conservative assumptions of value for existing investments, and does not recognise what we believe to be serious upside potential in the most recent investments and the project pipeline.
Eredene continues its commitment to Indian infrastructure through its most recent investments in a new container terminal and a port services company.Its investments are targeted at India‟s need for the modern infrastructure necessary in a fast growing and ever more sophisticated economy. Recorded net asset value is 23p per share. Our less conservative estimates suggest a potential medium term value of 30p per share. We would expect to return to these estimates at a later stage, probably with higher numbers as investments achieve greater maturity.
Recent successful win of concession for Ennore port is a 'company changing' event
Results show NAV rising from 21.9p / share to 23.0p with further scope for growth
More than 90% of fund now invested in nine projects
The management and Eredene's partners in India bring extensive knowledge and experience
With early investments now producing revenue, fair value per share set at 37.5p, versus current 10p level