Date :- 25/02/2023

Dear friends,

Over last few days I have received few queries on NAVA LTD regarding the receivable of arbitration award and lot of investors are doubting that will the payment be received ? or it will be stuck in courts as we have seen in few recent case like reliance infra and kiri industries.

Our take is that NAVA will easily receive payment as there is lot difference in the arbitration award itself and the situation that company is commanding right now.

Our take :-

The dispute was in between ZESCO which is owned by govt of Zambia and MAAMBA collieries which is subsidiary of NAVA ltd.

First of all the award received by NAVA is a consent award which means both parties have agreed mutually to certain terms and done settlement and filed consent terms in international court of London and things have been agreed and settled upon VS long fight and dispute seen in other cases.

Second from May 2022 zesco has again started buying power from MAAMBA collieries(NAVA LTD) and since then it is regularly paying 100% of its dues on time and there is no default.

Third Zambia and other African countries are having huge power shortage and loadshedding and they cant afford to disrupt power supply if they want economic growth going also IMF has given financial support on terms that they have to carry on reforms in power sector as without power economic growth is not possible.

Fourth MAAMBA has now become a member of SAPP (south Africa power pool) and has a new buyer for its power and has already supplied 20% of production in Q3 at higher realisation and cash payment due to this zesco will also wish to give the arbitration award quickly and secure power for their requirements post August 2023.

Fifth management of nava is now planning to add another 300 MW at existing plant and no one will put additional capacity if they have doubts on old receivable this indicates that management is expecting payment of arbitration award on or before time.

Sixth nava had planned a 16 day schedule maintenance for half of its power plant that is 150 mw starting 4 th jan which would have lasted till 20 th jan 2023. However president of Zambia Mr. Hakainde intervened and requested Maamba to complete it as early as possible and maamba resumed production before three days from schedule date.

We have attached few articles relating to power situation in Zambia and how important maamba is for Zambia and its development. All of the above factors indicate that payment of the arbitration award will be done before Aug 2023.

Old article how important maamba is for Zambia :- Calls for quick resolution to ZESCO – MCL debt impasse (miningreview.com)

Linkedin post by Maamba after starting plant 3 days before schedule :- Maamba Collieries Ltd on LinkedIn: MCL COMPLETES SCHEDULED MAINTENANCE THREE DAYS AHEAD OF SCHEDULE Maamba… | 21 comments

Nava becoming a member of south Africa power pool (sapp) :- Microsoft Word – Outcome2 (bseindia.com)

We @Dialwealth also expect NAVA to be debt free on consolidated basis infact have surplus cash for expansion. We also expect positive cash flow of 5000 cr plus( nava is also planning to sell some of its non core assets which they have mentioned in concall )  in FY 24 and PAT of 1600 cr plus in FY24 and current market cap is about 3500 cr.

If you have any doubt regarding any of our stock picks feel free to contact us.

To become a member of our whatsapp broadcast list by paying a one time fee of Rs 25000 you can whatsapp us your name to 9930441584.

@Dialwealth