Forum Archive Index - February 2000

["Paul Frost" <frostpt@ihug.co.nz>]

Former utilities investor South Eastern Utilities, now cashed up, has assets
of over $60,000,000.
This represents an asset backing per share of over $1.05 (predominately
cash).
When compared to their current market price of .91c, one could come to the
conclusion that they are under-valued.

Obviously, what is important is what the directors plan to do with the cash.
SEU's last announcement tells the story better than I can :

"South Eastern Utilities advised that further to its announcement on
06/10/99 it is continuing to explore the most practical manner in which to
return the company's equity to its shareholders.  At the same time the
company has continued to look for acquisitions that are capable of creating
substantial shareholder value.      Currently some promising investment
opportunities that should be capable of meeting the company's investment
criteria are being investigated.  Whilst these investigations may not result
in an investment,good progress is being made.  This together with findings
to date regarding the return of equity have led the Board to conclude that
it is not in shareholder's best interests to initiate a return of the
company's equity at the present time.  "One of two things will happen during
the coming year.Either we will have entered into an investment or
investments, which meet the company's investment criteria, and I have to say
this has always been ourfirst priority.  Alternatively, investment will not
have occurred, and return of equity will follow", said Chairman Norman
Geary.  As advised to shareholders some months ago the matter of dividend
payments would be kept under review."

With over $60,000,000 in liquid assets SEU would have more cash in the bank
than AQL,SPE,
ITC,EPH etc put together.They should be capable of making a substantial
investment of some significance.

My understanding is that an update on the companies future will be made
later this month, when they announce their intrim result.

Now could be a good time to take positions in this company, with limited
downside and substantial upside, should a positive announcement be made
later this month.

Disclosure : I own SEU shares.


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