Geodynamics (ASX: GDY) has been downgraded in our portfolio, but remains an investment quality speculative. We allocate speculative equities to one of three categories; Geodynamics has been downgraded from the top to the middle category.
The downgrade is based on the lack of defined project completion in the short term and the proposed takeover of Kuth Energy (ASX: KEN). (We are also investors in Kuth Energy.) Geodyanics will have projects in SA, NT, Vanuatu and the Solomon Islands. All may proceed, but are stalled because of lack of power off-take agreements or local politics. The takeover could also distract management in the short term.