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BN 09/27 06:09 *CAMCO JV WILL BE CAPITALISED WITH UP TO $46.05M :CAO LN
BN 09/27 06:09 *CAMCO FORMS JV WITH KHAZANAH NASIONAL :CAO LN
BN 09/27 06:09 *CAMCO INTL. CAO RE JV
RNS 09/27 06:07 Camco International CAO Re Joint Venture
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Camco Surges in London on Venture With Malaysian Fund (Update1)
2010-09-27 14:34:37.467 GMT
(Adds CEO comment starting in fifth paragraph.)
By Mathew Carr
Sept. 27 (Bloomberg) -- Camco International Ltd. rose the
most since December 2008 in London trading after announcing a
venture with the investment holding arm of the Malaysian
government to expand its carbon-trading operations in Asia.
Khazanah Nasional agreed to buy 9.28 million new shares of
Camco at 20 pence each, according to a statement distributed by
the Regulatory News Service. Stock in the London-based manager
of emission-reduction projects jumped as much as 41 percent to
20.5 pence and traded at 17.50 as of 3 p.m. The purchase would
give Khazanah a stake of about 5 percent.
Camco is down 42 percent from a year ago as the recession
sapped demand for emission credits and United Nations regulators
clamped down on the supply of new credits that the company
counts on to increase revenue. The UN program was created by the
1997 Kyoto Protocol, which capped emissions from rich nations.
Negotiators failed to extend the treaty at last year's summit in
Copenhagen, raising concern that the program may cease to exist
after 2012.
"This is a very clear commitment by a developing market
looking beyond 2012," said Andrew Shepherd-Barron, an analyst
at KBC Peel Hunt Ltd. in London, Camco's house broker. Asia will
continue to be a key supplier of credits, including from forest
protection, Shepherd-Barron said today in a phone interview.
The venture will receive a "significant portion" of its
revenue from selling products other than carbon credits,
including power and previously wasted heat and gas, said Scott
McGregor, Camco's chief executive officer. Projects will include
industrial-energy-efficiency investments and renewable-power
stations in Malaysia, Indonesia, Thailand and Vietnam, he said
today by phone. "We're not a pure carbon player."
'Not Pre-2012'
The agreement "is not a pre-2012 venture," McGregor said.
The deal, about a year in the making, is the first such
investment from a nation without a target in the Kyoto Protocol,
he said.
The joint venture will be capitalized with as much as
$46.05 million. At the start, it will have $30 million, made up
of $14.7 million from Khazanah as equity, $10.15 million as a
convertible bond and $5.15 million from Camco as equity, the
statement said.
"This is a nice way of financing new bits of business"
for Camco shareholders, said Gus Hochschild, an analyst in
London for Mirabaud Securities LLP. The dilution brought on by
Khazanah's purchase of the new shares is a "small price" for
those holders to pay, he said today by phone. He increased his
target price for the stock to 27 pence from 25 pence.
Camco Holding
Camco will hold a warrant, or option to subscribe for
additional equity of $3.7 million, the statement said. At the
start Camco will have a 60.1 percent holding and, assuming the
exercise and conversion of all outstanding options and
convertible bonds, a 51 percent interest, it said.
On Aug. 10, Camco bought a portfolio of waste-to-energy
projects in the agriculture industry in the U.S.
In the Malaysia venture, it will contribute its existing
carbon projects in Southeast Asia, excluding its China
portfolio, the statement said. Khazanah said it might contribute
an additional $16 million through 2013 subject to performance of
the transferred existing and future carbon contracts.
For Related News and Information:
European power-market stories TNI EUROPE PWRMARKET <GO>
Today's top power news PTOP <GO> and energy news ETOP <GO>
European electricity-markets home page EPWR <GO>
Asia emissions-trading stories TNI ASIAX ENVMARKET <GO>
--Editors: Mike Anderson, Alex Devine.
To contact the reporters on this story:
Mathew Carr in London at +44-20-7073-3531 or
m.carr@bloomberg.net
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or sev@bloomberg.net
