CARIBBEAN STOCK REPORT 26 September to 30 September 2011
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This again.
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LPH seems to be cash rich to be buying significant a chuck of St. Lucia light and power Co.
What can we read into this transaction?
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@David: “What can we read into this transaction?
That Barbados Light and Power is a very well managed company, while the St. Lucia operations are not so well managed.
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They are consolidating their caribbean holding while taking cash back home to canada david.
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@anthony
Expand please!
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anthony wrote “They are consolidating their Caribbean holding while taking cash back home to Canada David.”
Canadian shareholders of Emera are investors not philanthropists.
Let us hope that in return you get a well managed company and excellent service.
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Emera Caribbean Limited paid for the LUCELEC shares of which Emera own. Emera paid for LPH shares. LPH has vast retained earning. Now while i don’t know if LUCELEC share have gone up or down let suggest they went up. Now central bank is never going to let them ship off the retain earnings and due to exchange control they have to get their permission. Now transfer ownership of shares of LUCELEC give Emera opportunity to take back some of the money they spent on lph as a proper expense. sale put thru central bank and money passes on. Now Emera caribbean operates in the ec which has no exchange control so money can zoom to canada. What they would need to do is rebalance emera caribbean assets & liability and equity sheet so that it make happy music and money heads north.
Now for consolidation part. Emera LPH represent their biggest holdings in the caribbean by control majority of the stock they can decide which way they want to carry the company. Now suppose LPH decide for takeover bid for LUCELEC. Emera doesn’t have to come up with all the cash infact majority if not all will be source true LPH retained earnings. By consolidation their caribbean assets with the greatest percentage to lph if make the option for takeover by lph feasible due to their already have some share ownership. end result is that emera doesn’t have to use it money for any of their other take over bid .
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@hants
It was already well managed company that had excellent service. Let hope Emera keeps it that way.
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@anthony
Thanks!
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Who gives a shit about well managed, being well managed is not a foreign thing, all the shit is about expense, ie cost to consumers and cost to foreign reserves …. enough of this well managed technology transfer bullshit.
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