Media And Income Share Discussion Threads

[poolewe] 25/7/2002 01:56

Martin Gilbert has described investors in split-capital funds as naive.
No-one could have lost more than him(£20million and still counting!)he has offered in rather pathetic defence of both his own asset management skills and that of £7million salary over two years Fishwick.

[poolewe] 12/7/2002 17:15

After todays falls I suspect it will be the receivers next.

[poolewe] 11/7/2002 23:23

Despite much analysis of how this trust(and splits in general)worked it is now evident that Fishwick,Gilbert and other directors were never up to the job.
Irrespective of markets in general it is becoming evident that it is Aberdeen itself which has failed miserably to properly manage these funds.
This has been obvious for a long time as dialogue over on ADN thread would seem to support.
Aberdeen's mauling before the Treasury Select Committee was predictable.

[bumpy dog [new]] 11/7/2002 00:25

Maybe not such a good gamble...

"security has been temporarily suspended from trading on the London
Stock Exchange from 10/07/2002 9:15am at the request of the company pending
clarification of the company's financial position."

[novision] 04/7/2002 13:09

But you can still buy 'em for 2p - must be a bargain (not!)- sympathies to any holders.

[redsonning] 18/6/2002 20:17

The trust finally appears to have reached the point where the only party currently having any concern in the affairs is the bank! All classes of share, including Zeros (MEDZ) are now being quoted at zero net asset value.
This gives a new, albeit unintended meaning, to the term "Zeros" !!!

[novision] 23/5/2002 08:49

Leader board again. But the bid ain't moving .... and that's what counts.

[bsg] 23/5/2002 08:28

Why are the going up ?

[bpoole] 22/5/2002 14:48

Why are people buying these shares for 2.5p when they know they
will never get more than .5p?

[bsg] 01/5/2002 19:31

Still looking grim.

[novision] 25/3/2002 11:30

be patient.
look before you leap.
only invest money you can afford to lose.

[rk23] 24/3/2002 23:13

Hi guys any thoughts for this week?

[redsonning] 22/3/2002 12:23

bsg - I see we discussed some time ago (see numbers 36 and 37 above)

Q) What are the three types of shares in this fund, i.e what are zps - thanks.

A) The zero preference shares (zps) have capital entitlement and predetermined growth (if enough assets are there) but receive no income.
The income shares receive dividends as detailed in the original listing.
The Ords get dividends and the capital growth if there is any after all other classes of share have been paid their prior entitlements on wind-up of the trust.

Basically each class of share has it's various entitlements and characteristics as described above, and this is the very essence of splits, in that the different classes have different rights. The zeros have a predetermined (theoretical) rate of asset accrual, but of course real assets have to be there at wind up to pay them off. If there are assets left over after paying the zeros, then the income shares get the next slice. After them come the Ords. At present there is under 30p per zero available in real assets, so even the zeros are well off getting their money back. The Incs are out of the money, as of course are the Ords.

The trust can't pay dividends because it has breached it's bank covenants and fails the companies act test section 265 which requires it to have assets 50% higher than liabilities.

Hope this helps a bit - if you want to understand it further ring up the AITC (Association of Investment Trust Companies) and ask them to send you some of their free blurb on splits.

[bsg] 22/3/2002 08:18

Thanks very much redsonning.

[rk23] 21/3/2002 23:05

I think I may have been wrong is saying that these were dead and buried, hopefully I may have spoke to early. Todays price move has left me feeling a lot :)

[bsg] 21/3/2002 19:01

redsonning ... could you please explain or point me to the information about the different types of shares in this trust, I know what ord shares are but the other two types not so sure. Thanks in advance.

[redsonning] 21/3/2002 10:07

bpoole - Thank you for your kind words! By now I guess you understand the risks you are contemplating. I wouldn't like to influence you on this, except to say that your thinking has some logic to it.... if indeed the NAVs are going to turn up more significantly. Since there are so many cross holdings it is possible that once we get some upward movement that this will feed itself around the sector in much the same way that the downward spiral has done, and to this extent the small upward movement in MEI over yesterday and today may have more impact than might appear on the face of it.

My own feeling on this is that the downward spiral has been overdone in terms of its punishment of the splits (even of those with heavy cross holdings). However you can't argue with the market! It is the market which determines the NAVs for these trusts. But getting the situation back to some sort of normality is not so easy.

Your mention of the dividend situation is very important. This is crucial to getting some sense of value back into the market. The cuts result from a combination of adverse circumstances, including cuts in other trusts feeding around, breaching of bank covenants, and the companies act test (section 265) which many of those dividend cutters are now failing. The next problem will be that if they continue to accrue income which they can't pay out (because of the companies act test) then they may be in danger of losing their investment trust status too if they haven't paid out at least 85% of their income in dividends.... which is required for them to maintain their status.

Complex.... but if you can jump in at the right moment....

[bpoole] 21/3/2002 09:22

I am thinking of buying back in.
I have been looking at the NAV of a lot of
splits and they seem to have bottomed and are on the way
up. Some are up to 45% discount to NAV.
If only Aberdeen stopped announcing dividend
suspensions they might recover.
PS: Did they suspend MEI dividends or cancel them?
redsonning :- I would also like to thank you for
your informative postings.

[rk23] 20/3/2002 23:01

Dont need the £375, just hope to get my capital investment back some day! I hope :)

[rk23] 20/3/2002 12:32

ok people, I have 75'000 MEI shares which cost me £1900, should I cash in and get back 375 based on the bid cost of (0.5p) or should I wait for a climb if its ever going ot happen!

Is it likley that these shares can make any form of a recovery, all views & opinions welcome

[redsonning] 20/3/2002 11:00

The game is not entirely up on these, but very difficult of course. However the zeros (see under MEDZ) have just recorded their first asset value uptick in a long time. This is partly market recovery, and partly the fact that so many other splits have fallen so far that there's not much further to fall!

rk23 you have to be prepared to wait, unless as Novision says you need the £375. However Novision is also correct in his comments about the upside if there is one. Dangerous but interesting.

[rk23] 20/3/2002 10:25

Well I opted to hold out, with a view of all or nothing!