29 March 2020:  Latest update:  I see no good reason why the PE takeover of ZEN at $1.01 in cash will NOT go ahead, i.e. I think it WILL go ahead.  I don't think there were too many conditions that would allow the PE (private equity) consortium to pull out of the deal.  It seem to me that it's really down to the ZEN shareholder vote, and that should be a resounding "YES" in the absence of a superior alternative offer.

See here, here or here.

They have said that they are also exploring the possibility of announcing a special dividend to release franking credits that they have, and that the $1.01 cash price offered for every ZEN share aquired would be reduced by the amount of any special dividend.  So, for those who can use the franking credits, they (the franking credits) would be in addition to the $1.01.  For those who can't use them, they would still get the $1.01 (+ franking credits that they can't use) - if the special dividend goes ahead.  

The market however seems skeptical that this deal will go ahead, with ZEN recently trading at around the 80c mark, implying a 25% upside to that price if the deal goes ahead at $1.01.  During the past week (23-Mar to 27-Mar 2020), ZEN has traded in a range between 79c and 90c, and they closed around the middle of that range at 85.5c.  Even at 85.5c, there is still 18% upside if you get paid $1.01 for your ZEN shares in a few months time.

If the deal does fall through, ZEN's SP would obviously fall, but they're still a good company that will most likely be taken over by somebody at some point (at a premium), particularly if they're trading at 80c or below.  Their main listed competitor Pacific Energy (ASX: PEA) were acquired by another PE group (QIC) after a bidding battle with a Canadian and Australian consortium.  These companies build, run and maintain remote area power stations, mostly for miners, and most of those miners in ZEN's case have been gold miners, who are less affected by the current lower base metals prices that have resulted from this COVID-19 crisis and the associated global downturn.  Gold is still flying.  There will likely be disruptions at some mines - particularly those who rely on FIFO workers - but the majority (if not all) of ZEN's contracts are multi-year "take or pay" contracts.  That means ZEN get paid regardless of whether the power they generate is used by their clients or not.  It's an attractive business model, particularly to PE groups who have medium to long term investment horizons.

Previous Updates:

Updated 22-Dec-2018:  Relatively new listing.  Providing stand-alone energy (electricity) solutions to gold miners like Northern Star (ASX: NST), Newmont (NYSE: NEM), Gascoyne Resources (ASX: GCY) and Dacian Gold (ASX: DCN), plus other public companies (like Incitec Pivot: ASX: IPL).  Their MD does a good presentation here (link below) at a recent Investment Forum hosted by the ASX for Alex Waislitz's Thorney Opportunities (TIGA, ASX: TOP, ASX: TEK) - scroll down to the Hamish Moffat - Zenith Energy video:

http://thorneyopportunities.com.au/sydney-investment-forum/

Thorney went in at the ZEN IPO, and recently bought more stock, and now hold 22.18% of ZEN.  John Rubino, the Chairman of Monadelphous Group (ASX: MND) is also a substantial shareholder of ZEN, holding 9.78%.

ZEN do have direct competition; the most obvious competitor is Pacific Energy (ASX: PEA).

There are other players who build/operate remote power plants including Monadelphous (MND) via their "Zenviron" JV with ZEM Energy.  CIMIC (CIM) and Downer EDI (DOW) also have interests in power/energy infrastructure construction, maintenance, & operations.  However, the two current main players (whose primary focus is on stand-alone energy solution provision - in remote areas) are PEA and ZEN.

ZEN are the new kids on the block.  They have Thorney backing them.  The have John Rubino backing them.  Their market cap is back under $70 million with an SP under 70 cents per share, despite being as high as $1.24 in July.  PEA has a market cap of around $250m.  ZEN look like a prime takeover target to me, for PEA or even MND.  Thorney have a blocking stake, so would have a big say in the outcome of any takeover attempt, but if the premium was big enough, who knows?

ZEN are only supplying energy (electricity) solutions to the mining and energy (oil/gas) sectors at this stage, but they have plans to expand their offering to communities who want to be self-sufficient, and who want to either disconnect from "the grid" (existing energy infrastructure) or else never got connected to "the grid" in the first place (which could be due to geographic isolation or other challenges).  Regardless of any possible M&A activity, it looks to me like ZEN have a lot of growth ahead of them.

http://www.zenithenergyltd.com/

Zenith Energy (ZEN) Corporate Presentation, May 2018

29 May: 2 New Power Stations Commissioned

Disclosure:  I hold ZEN shares.

They look like good buying below 80c.

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ZEN releases Preliminary FY2018 Results, from August 6th 2018

Also, on August 10th, TOP (the Thorney Opportunities Fund LIC) and their associated trading company TIGA Trading (TIGA = Thorney Investment Group Australia) notified the ASX that Thorney had sold some ZEN (between June 25th and August 10th), reducing their exposure from 15.31% to 14.13%.  

Thorney remain the third largest shareholders, behind Doug Walker, ZEN's executive Chairman and co-founder, who owns 23.92% of ZEN (through his company Zanea Pty Ltd), and Gavin Great, the other ZEN co-founder, who resigned as Operations Director in January, but still holds 18.73% of ZEN.  Those top 3 holders (Doug Walker, Gavin Great & Thorney Opportunities) together hold 56.78% of the shares on issue. 

With a reduced free float of only ~43%, + a low market cap of only $78m (at 99.5c/share @ 12-Aug-18), it's not easy for TOP to sell out, if that is indeed Thorney's intention, without crashing the share price.  They may just be locking in some profits, as ZEN had a very good run, before their recent 20% SP fall from $1.235.

I sold all of my ZEN shares on July 27th at $1.08, as they seemed to be getting a bit toppy up there.  Thorney is the only fund manager with a substantial holding now, and they have been reducing their exposure lately, after loading up in May when ZEN were around 75c.  Westoz (WIC) lodged a "ceasing to be a substantial holder" notice on August 2nd, and Microequities Asset Management did the same on July 26th.  BT Investment Management dropped off the list back in September.  

There's plenty of growth left in ZEN certainly, but at over $1 up to $1.235 (where they got up to on August 1st) there is already a lot of future growth priced in.  

Here's the announcement they made when co-founder Gavin Great left the company at the beginning of the year:

ZEN: 24-Jan-2018: Resignation of Director of Operations

No reason was given.  Bit of a mystery.  He hasn't sold any shares yet though.

ZEN is the ASX code for Zenith Energy, and is not the same as private company ZEN Energy, which has Ross Garnaut as their company President and Sanjeev Gupta as their Executive Chairman:

http://www.zenenergy.com.au/team/

This straw is not about ZEN Energy.  Or about ZEM Energy, who have a JV with MND called Zenviron.  It's about Zenith Energy, whose ASX stock code is ZEN.  Clear as mud?

http://www.zenviron.com/

http://www.zenithenergyltd.com/our-team.html

A public company with a bright future.

11-Mar-2019:  Zenith Energy (ZEN) have this morning announced the appointment of Peter Torre as an independent non-executive director - see here.  Peter has been advising and working for ZEN since before they IPO'd - as an independent contractor providing services as ZEN's joint company secretary.  He runs his own business, Torre Corporate, an advisory firm providing Corporate Governance Services to publicly-listed companies  This announcement is NOT regarded as market sensitive information, and I would not normally comment on it.  However, I found some of the wording in the announcement interesting, particularly the part that I've highlighted below:

Zenith Energy Chairman, Doug Walker commented: “Peter has been an integral part of the Zenith Board since its IPO, not only assisting with Corporate Secretarial advice, but providing insightful input to the Board’s deliberations with his public company governance experience and strategic thinking.”

Mr Torre commented: “It has been a pleasure seeing Zenith embrace the public company environment since its successful IPO. The transition from private to public, and listing on the stock exchange, can be a challenging process for existing owners and management. Zenith has made that transition smoothly, fully embracing the enhanced governance framework required as a listed company, without hindering the strategic and entrepreneurial vision to deliver strong shareholder returns. I look forward to actively supporting the next phase of growth for Zenith.” 

It is true that some companies do struggle to make that leap from a private to a public company, with the transparency and reporting requirements that are involved, and that maintaining their previous growth trajectory can also certainly be challenging, especially if management focus is distracted.  It would appear that ZEN are doing OK in that regard.

23-Oct-2018:  ZEN-IGO sign PPA Amendment for Nova Solar Operation - see here

Nova is the main asset of Independence Group NL (IGO) and is a nickel/copper/cobalt mine that includes the Nova and Bollinger discoveries originally found by Sirius Resources (which was a Mark Creasy company).  IGO bought out Sirius, and Mark Creasy still owns 15.4% of IGO.

ZEN already had a PPA (power purchase agreement) in place with IGO, but that has now been amended to allow for the inclusion of solar energy production at Nova.

21-Jan-2019:  Disclosure:  I hold IGO shares, but not ZEN shares currently.  I have held ZEN shares previously, and may do so again in the future.