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Dawney & Co Statement Regarding AWE Limited

2016-11-02 06:00
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Context, refer: http://en.prnasia.com/story/160105-0.shtml 

BRISBANE, Australia, Nov. 2, 2016 /PRNewswire/ -- Today, Dawney & Co issues a statement regarding AWE Limited. The full statement is as follows:

Dawney & Co Pty Ltd ("we" or "us") and our associates have recently increased the combined shareholding to 675,000 shares in AWE Limited ("AWE" or "the Company"). To date, the Board has not responded to the letter that was sent on October 4. For convenience, we have re-sent its questions to AWE Limited via the designated Annual General Meeting form. In the meantime, we wish to make some additional comments about the Company for Director and shareholder consideration:

  1. Substantial shareholders Ellerston Capital and Perennial Value, both reputable, long-term value investors, have reduced their holdings this year. We draw attention to the prices at which both have sold - well below, and effectively supportive of, the Lone Star offer. This should motivate the Board to allow shareholders to vote on the Company's sale.
  2. We acknowledge the Board's decision to sell assets and reduce debt. However, in doing so, they have begun a wind down process (getting smaller, perhaps irreversibly). The Company's remaining assets and plans are mostly known. Public markets tend to undervalue mature (known) assets, regardless of long-term value. Therefore, to maximise present value, AWE must be privatised or bought by a larger public company (with more capital to develop/retain assets and benefit from synergistic savings).
  3. The oil price recovery, selling assets and the Lone Star proposal have all helped AWE surge off 15 year lows, while, the forecast increases in contracted gas prices provide a solid foundation into the future. Again, these are known facts but the share price continues to linger. To us, the only appreciation catalyst is an active realisation or a debt-funded acquisition (the more risky and less favourable of the two).
  4. Origin Energy Ltd ("ORG") is seeking buyers for their WA interests held with AWE. This is an excellent opportunity to achieve a premium value for both companies and shareholders by offering potential bidders full ownership of Waitsia. Why don't AWE and ORG work together on an auction of common interests?

We stand by our recommendation to seek an outright sale of the Company and ask all likeminded shareholders to contact either the Board or ourselves to escalate the process. If the Board and management are confused about the next steps to take to maximise value, we are prepared to assist them.

Sincerely,

Mitch Dawney
Managing Director
Dawney & Co Pty Ltd

mdd@dawneyco.com.au  
www.dawneyco.com.au
Twitter: @MitchDawney

Source: Dawney & Co Pty Ltd

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