Author Topic: AT - Atlantic Power Corp  (Read 28161 times)

Cardboard

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Re: AT - Atlantic Power Corp
« Reply #100 on: January 12, 2018, 09:36:26 AM »
It is Mangrove proposing this option and not the company or a fund that has held AT shares for a few years now and likely fed up with the lack of share price appreciation.

If their power plants are used by blockchain mining so be it. It would be another industrial user to add to their clients list. The Chinese are apparently cracking down on bitcoin mining since it consumes a lot of power and they consider it not a key goal unlike AI, robots and EV.

If I recall properly from a recent article, the worldwide consumption is already at 0.17% which in my view is enormous for an activity that creates nothing. In other words, if the solving of these complex math equations was helping to solve some of the world's problems in parallel then, it could amount to something. That is not the case.

Even gold mining is useful to a degree as it is essential in many applications. So the capital and energy spent on mining gold is not entirely devoted to creating a store of value.

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doc75

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Re: AT - Atlantic Power Corp
« Reply #101 on: January 12, 2018, 11:04:25 AM »
Atlantic power released the following this afternoon:

Atlantic Power Corporation (NYSE: AT) (TSX: ATP) ("Atlantic Power" or the "Company") today released the following statement in response to news inquiries about an amended Schedule 13D filed earlier today by the Company's largest shareholder, Mangrove Partners and certain affiliated entities (collectively, "Mangrove"):

On January 10, 2018, management of Atlantic Power had a conference call with Mangrove, at Mangrove's request. During the call, Mangrove recommended that the Company explore commercial opportunities for those power plants that are currently not operational, those that have Power Purchase Agreements ("PPAs") scheduled to expire in the next few years, and those that may have excess power available for sale. The Company has had an active commercial effort with respect to these plants for some time, including pursuing potential alternative uses for existing sites and commercial arrangements with existing or new customers. The Company welcomed Mangrove's input and their interest in potential co-investment with the Company. During the call, Mangrove mentioned several types of businesses as potential areas of new customer demand. One area mentioned was cryptocurrency mining and related businesses. Although the Company may evaluate that sector, as it would other potential businesses, there are no ongoing discussions with cryptocurrency miners or related businesses or with Mangrove related to that sector. The Company would take a cautious view of counterparty credit risk for any such businesses.

SafetyinNumbers

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Re: AT - Atlantic Power Corp
« Reply #102 on: January 23, 2018, 04:00:24 AM »
Iím curious on peopleís thoughts on the new convertible announcement. It seems like a reasonable risk adjusted way to get exposure to the management team versus buying the common outright.

Also, there has been a debate on the preferred here in the past and I wanted to point out that the current yield on the AZP.PR.C slightly exceeds the AZP.PR.B. The total yield is significantly higher all else being equal as the AZP.PR.B and AZP.PR.C are inter convertible in than 2 years. I have seen other floaters begin trading at a premium to their fixed rate counterparts as their current yields have risen above but this one has lagged.
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spartansaver

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Re: AT - Atlantic Power Corp
« Reply #103 on: January 24, 2018, 07:18:26 PM »
When the company discloses project adjusted EBITDA on an equity method, I'm assuming this means that the EBITDA amount is ATP's proportionate amount of EBITDA (ex. ATP owns 50.15% of Frederickson and presents 2016 proj. adj. EBITDA of $12.1mm. This implies that actual EBITDA of the plant was $24.1mm). Is this correct?

petec

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Re: AT - Atlantic Power Corp
« Reply #104 on: January 25, 2018, 12:33:29 AM »
When the company discloses project adjusted EBITDA on an equity method, I'm assuming this means that the EBITDA amount is ATP's proportionate amount of EBITDA (ex. ATP owns 50.15% of Frederickson and presents 2016 proj. adj. EBITDA of $12.1mm. This implies that actual EBITDA of the plant was $24.1mm). Is this correct?

Where they specify that it is a proportionate number, that's how I read it, yes.

doc75

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Re: AT - Atlantic Power Corp
« Reply #105 on: January 30, 2018, 10:24:37 AM »
Does anyone have any insight into the steady (and continuing) decline since around beginning of December?

My guesses:

- The recent $100mm convertible issue putting a lid on the equity upside.  I was surprised at the size of the offering and the conversion price of $4.20 was lower than I'd expect, given management's belief earlier this year that the equity was undervalued even in the $3.50 range.

- The San Diego naval assets were supposed to end operation in February 2018, if no progress was made on alternative arrangements.  Unclear to me if the termination was at the beginning or end of February, but lack of news on this front suggests those assets are indeed destined to be decommissioned.

Any other thoughts?


Cardboard

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Re: AT - Atlantic Power Corp
« Reply #106 on: January 30, 2018, 11:23:41 AM »
You piss publicly on your largest shareholder who is trying to bring up some new ideas, find new customers, while you find none. Then you upsize an already large convertible issue with capped upside at $4.20 while your mission is supposedly to reduce debt and deliver shareholder value. This issue attracts a bunch of short sellers who are trying to hedge their new convertible position and voila!

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doc75

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Re: AT - Atlantic Power Corp
« Reply #107 on: January 30, 2018, 11:43:56 AM »
You piss publicly on your largest shareholder who is trying to bring up some new ideas, find new customers, while you find none. Then you upsize an already large convertible issue with capped upside at $4.20 while your mission is supposedly to reduce debt and deliver shareholder value. This issue attracts a bunch of short sellers who are trying to hedge their new convertible position and voila!

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Interesting, thanks for your take.  For what it's worth, I didn't read their response to Mangrove as a public flogging.  The shares spiked on crypto hype and my guess is that the legal team felt compelled to issue a statement.  Here's what they said:

"The Company welcomed Mangrove's input and their interest in potential co-investment with the Company.  During the call, Mangrove mentioned several types of businesses as potential areas of new customer demand.  One area mentioned was cryptocurrency mining and related businesses.   Although the Company may evaluate that sector, as it would other potential businesses, there are no ongoing discussions with cryptocurrency miners or related businesses or with Mangrove related to that sector.  The Company would take a cautious view of counterparty credit risk for any such businesses."

This seems generally open to Mangrove's input.  They're just confirming that they are not jumping into the crypto craziness with both feet.   I'm unclear on the legal requirements, but I assumed this was equivalent to the common "company X is not aware of any material news that would cause the recent trading activity" release.

Good point about hedging the convertible.

mike

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Re: AT - Atlantic Power Corp
« Reply #108 on: March 03, 2018, 06:22:18 PM »
Just listened to the call and read the remarks. As good as usual.

Debt: Will pay back approx. $100m per year and be debt free by 2025.
Stock Repurchase: "More than happy" to buy back 10% this year, approx. $25m. Didn't buy back any yet due to blackout.
Investment in business: Low hanging fruits are gone. Don't expect much in the future.
M&A: Actively looking for bargains. Everything is on the table and they specially mentioned wind and biomass. They spent quite some time talking about M&A in the call.
« Last Edit: March 04, 2018, 09:28:22 AM by mike »

doc75

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Re: AT - Atlantic Power Corp
« Reply #109 on: March 04, 2018, 12:57:45 PM »
Just listened to the call and read the remarks. As good as usual.

Debt: Will pay back approx. $100m per year and be debt free by 2025.
Stock Repurchase: "More than happy" to buy back 10% this year, approx. $25m. Didn't buy back any yet due to blackout.
Investment in business: Low hanging fruits are gone. Don't expect much in the future.
M&A: Actively looking for bargains. Everything is on the table and they specially mentioned wind and biomass. They spent quite some time talking about M&A in the call.

Nobody could accuse these guys of being promotional, that's for sure!  I really like listening to the calls.  Very clear, thoughtful responses to questions.

I was a bit put off by the $4.20 convertible issuance.  But it's clear upon listening to the call how keen they have been to set up a strong enough defensive position to allow them to go on offence if/when the right prices come along over the next few years.  The balance sheet strength that comes with pushing out those maturities was worth the price.

It was also interesting to hear them address the different uses of capital, with regards to dividends (not a good idea), NCIB, SIB.

I doubled my position around C$2.40.