| Andrew Cooke | Contents | Latest | RSS | Twitter | Previous | Next

C[omp]ute

Welcome to my blog, which was once a mailing list of the same name and is still generated by mail. Please reply via the "comment" links.

Always interested in offers/projects/new ideas. Eclectic experience in fields like: numerical computing; Python web; Java enterprise; functional languages; GPGPU; SQL databases; etc. Based in Santiago, Chile; telecommute worldwide. CV; email.

Personal Projects

Lepl parser for Python.

Colorless Green.

Photography around Santiago.

SVG experiment.

Professional Portfolio

Calibration of seismometers.

Data access via web services.

Cache rewrite.

Extending OpenSSH.

C-ORM: docs, API.

Last 100 entries

Chutney v5; Weird Componentized Virus; Interesting Argentinian Author - Antonio Di Benedetto; Useful Thread on MetaPhysics; RAND on fighting online anarchy (2001); Now Is Cat Soft LLC's Chance To Save Up To 32% On Mail; NSA Hacked; Call Center Services for Cat Soft LLC; Very Good LRB Article on Brexit; Nussbaum on Anger; Credit Card Processing for Cat Soft LLC; Discover new movies on demand in our online cinema; Tasting; Credit Card Processing for Cat Soft LLC; Apple + Kiwi Jam; Hit Me; Increase Efficiency with GPS Vehicle Tracking for Cat Soft LLC; Sudoku - CSP + Chaos; Recycling Electronics In Santiago; Vector Displays in OpenGL; Call Center Services for Cat Soft LLC; And Anti-Aliased; OpenGL - Render via Intermediate Texture; And Garmin Connect; Using Garmin Forerunner 230 With Linux; Payroll Service Quotes for Cat Soft LLC; (Beating Dead Horse) StackOverflow; Current State of Justice in China; Now Is Cat Soft LLC's Chance To Save Up To 32% On Mail; Axiom of Determinacy; Ewww; Fee Chaos Book; Course on Differential Geometry; Increase Efficiency with GPS Vehicle Tracking for Cat Soft LLC; Okay, but...; Sparse Matrices, Deep Learning; Sounds Bad; Applebaum Rape; Tomato Chutney v4; Have to add...; Culturally Liberal and Nothing More; Weird Finite / Infinite Result; Your diamond is a beaten up mess; Maths Books; Good Bike Route from Providencia / Las Condes to Panul\; Iain Pears (Author of Complex Plots); Plum Jam; Excellent; More Recently; For a moment I forgot StackOverflow sucked; A Few Weeks On...; Chilean Book Recommendations; How To Write Shared Libraries; Jenny Erpenbeck (Author); Dijkstra, Coins, Tables; Python libraries error on OpenSuse; Deserving Trump; And Smugness; McCloskey Economics Trilogy; cmocka - Mocks for C; Concept Creep (Americans); Futhark - OpenCL Language; Moved / Gone; Fan and USB issues; Burgers in Santiago; The Origin of Icosahedral Symmetry in Viruses; autoenum on PyPI; Jars Explains; Tomato Chutney v3; REST; US Elections and Gender: 24 Point Swing; PPPoE on OpenSuse Leap 42.1; SuperMicro X10SDV-TLN4F/F with Opensuse Leap 42.1; Big Data AI Could Be Very Bad Indeed....; Cornering; Postcapitalism (Paul Mason); Black Science Fiction; Git is not a CDN; Mining of Massive Data Sets; Rachel Kaadzi Ghansah; How great republics meet their end; Raspberry, Strawberry and Banana Jam; Interesting Dead Areas of Math; Later Taste; For Sale; Death By Bean; It's Good!; Tomato Chutney v2; Time ATAC MX 2 Pedals - First Impressions; Online Chilean Crafts; Intellectual Variety; Taste + Texture; Time Invariance and Gauge Symmetry; Jodorowsky; Tomato Chutney; Analysis of Support for Trump; Indian SF; TP-Link TL-WR841N DNS TCP Bug; TP-Link TL-WR841N as Wireless Bridge; Sending Email On Time; Maybe run a command

© 2006-2015 Andrew Cooke (site) / post authors (content).

Enersis, Endesa, Rights Issue

From: andrew cooke <andrew@...>

Date: Sun, 12 Aug 2012 10:59:42 -0400

There's been a lot of news in the Chilean press recently about Enersis.  The
bare facts are here -
http://www.ft.com/intl/cms/s/0/e6867bf8-d727-11e1-8e7d-00144feabdc0.html - but
there's no explanation of why there has been such a big fuss.

There's a bit more background at
http://blogs.ft.com/beyond-brics/2012/07/26/chile-enersiss-8bn-cash-call


To understand what's happening you need to understand what a rights issue is.

So pretend that I am a company worth a billion dollars.  I am a publicly
traded company with just 1 share (also worth a billion dollars) that you own.

And I want some money.  Maybe I want that money because I want to invest and
grow.  Or maybe I want it because I am in desperate financial trouble back in
Europe.

Either way, I decide to create a second share.  I offer this share to you for
another billion dollars.  Why would you buy it?  At first glance it seems like
an odd/crazy thing to do - you already own all the company.  Why would you pay
to buy it again?

But if you buy the share I will have a billion dollars in extra cash.  So I
will no longer be worth one billion dollars (assuming my previous value was
fair) - I will be worth two billion!  So you will have paid 2 billion for a
company that is worth 2 billion.  So you don't lose anything!  Assuming that
the shares are liquid (that you can easily find a buyer) you could sell one of
those shares and get your money back.

Meanwhile, I am going to be busy investing that money, making my company
better.  Which will make my value increase further.  Which will make you
richer (since the value of the shares will increase).  Profit!


That took me a while to get my head around.  But in summary it's a way for a
company to raise money from its shareholders so that it can grow while
providing some guarantees that the profits from that growth go back to the
people that provided the money.

And if everyone is happy with the numbers then it makes a lot of sense.
Because it doesn't really "cost" the investors anything - in return for their
money they get an equal value in shares.

But there are risks.  What if the company doesn't grow?  What if it wastes all
that cash?  What if the current value of the company isn't a fair reflection
of what it is worth?  What if the company is going to use that money to pay
debts it's been keeping secret?

The Chilean economy is in pretty good shape.  Europe (especially Italy and
Spain, where the parent company of Enersis trases - the one that is making
this offer) is in a mess.

As the FT notes in the second link above:

  The problem is that the valuation given to the assets looks rich – some 25
  per cent more than Barclays had estimated, Invernizzi said in her note. And
  shareholders have little power to stop the deal from going through as
  proposed. The capital increase plan only needs two thirds of the votes to
  pass; Endesa already has 60 per cent of them.

So the company was going to push through a deal that would hurt Chilean
stakeholders (particularly the large pension funds, particularly mine - and
they sent me and everyone else an email about this just last week).

So all hell broke lose.

Andrew

Regulator's Response

From: andrew cooke <andrew@...>

Date: Sun, 12 Aug 2012 11:10:34 -0400

And here's what happened:
http://blogs.ft.com/beyond-brics/2012/08/03/chilean-regulator-calls-foul-on-enersis-cash-call/

  On Friday Chile's securities regulator (SVS, for its initials in Spanish)
  put up a roadblock to Enersis’s novel plan for an $8bn cash call. [...]

  The SVS [regulators] made two requests that could make Enersis’s plan that
  much harder to pass. First, Coloma said that Enersis should get a new and
  independent (and presumably lower) valuation of the Endesa assets. And,
  second, the SVS said the deal should be approved by a majority of board
  members who don’t represent Endesa, not by a 2/3 shareholder majority.

Andrew

Comment on this post