Fayrewood Share Discussion Threads

[old boy returns] 12/2/2009 17:32

I went for the all cash option as well in the end. Low interest rates and strengthening pound swung it for me in the end and I am looking at building a high yielding portfolio of corporate bonds, preference shares and PIBS with the cash. If it works out it could provide a nice little pension income to fall back on. It is the end of a long and ultimately rewarding journey for me with FWY although I will keep an eye on Letchworth shares which IIRC will be tradeable and may have a little dabble at some point if they look good value.

[gengulphus] 12/2/2009 14:24

Well, as someone who took the cash, it's probably time for me to say goodbye - and good luck with Letchworth!

Gengulphus

[scburbs] 12/2/2009 14:23

Good idea Des. Whilst I have no remaining skin in the game I will refresh my predictions and stop by to make an estimate of the final recovery.

[deswalker] 12/2/2009 13:51

Seeing as the second court hearing has passed and the Scheme looks certain to become effective in the next few hours, I have now created a Letchworth thread.

If anyone has any comments about Letchworth then it's probably worth keeping them all together over there.

[deswalker] 12/2/2009 13:47

This is a thread to monitor the development of Letchworth Investments Limited, a company spun out of Fayrewood plc (FWY) to manage the wind down of the FWY assets which couldn't be returned to shareholders in February 2009.

Letchworth shares in issue = 10,492,127

Register:

Mario Legoboru = 3,268,020
David Kleeman = 828,681
Keith Negal = 30,245
Richard Templeton = 9,000
Sir Tim Chessells = 7,259
North Atlantic Value Fund LLP = 3,500,000
Stefan Link = 474,289
Richmond Nominees Limited = 400,000
Simon Wharmby = 200,000
Unnamed Others = 1,774,633

Relevant websites for Letchworth info:

[deswalker] 10/2/2009 12:51

By my calculations things look as follows ...

Cash prior to IS settlement and running costs (using €/£ = 1.14) = £10.23 mill
IS Settlement = £2 mill
Estimated Running Costs = £1.3 mill

Total Letchworth Assets after IS Settle & Running Costs but before any more claims = £6.93 mill

Number of Letchworth Shares = 10.492 mill

Letchworth Assets after IS Settle, Running Costs but before other claims per Share = 66p.

Assume a further £2 mill of claims & discount the result at 5% pa for 4 years (all of which which looks conservative based on claim profile, low cash rates and likely cash return profile) gives a conservative fair value per share of 38.7p.

I've turned down 28p today for this exposure. I'm comfortable with it.

Fingers crossed.

Des

[deswalker] 10/2/2009 12:02

By my calculations of the 11,438,758 shares who hadn't declared their intentions previously, 9,664,125 (84.49%) chose the full cash option and the remaining 1,774,633 (15.51%) chose the PCA. That's just about exactly what I was guessing at in my model.

[thedaidai] 09/2/2009 21:07

cheers scburbs thats what I thought would happen - I'm hoping they will close me out at 126p without applying a spread

[scburbs] 09/2/2009 20:46

thedaidai,

I have a spreadbet with IG. If you haven't been in touch with them then they should close you out at 126p as that is the default option (i.e. you had to elect for the part share option). Not sure exactly when this will happen perhaps not until around 25th February when other positions are cashed out. If you are on a rolling quarterly then you need to make sure they cash you out before it rolls in mid-March.

[thedaidai] 09/2/2009 19:54

anyone got these on a spreadbet?

I've got them with IG but haven't heard anything from them - does anyone know how they will be handled?

[stewjames] 09/2/2009 16:53

It'll be very interesting to see how well you do, Des. I suspect it'll work out very nicely for you.

I've gone for all cash, purely because I will probably need it elsewhere.

[deswalker] 09/2/2009 14:20

scburbs,

I intend to create a Letchworth thread on here once it's all sorted. I doubt there'll be many contributors but it will be good to have a point of contact for when stuff happens. I'm hopeful of a reasonable return. Certainly more than cash.

I'm already about 30% cash so I'm not desperate for funds to reinvest. Consequently I decided to tuck a few Letchworth away. Hopefully nobody else did likewise :0)

Des

[scburbs] 09/2/2009 14:04

DesWalker,

Good Luck! Keep us posted on how it goes. I suspect you will make a very good IRR on the Letchworth portion.

[deswalker] 09/2/2009 12:55

I've gone for one-third full cash and two-thirds Letchworth.

[scburbs] 09/2/2009 12:34

Shares being suspended today. I think there is a good return left for Letchworth shareholders, but have in the end gone with the 126p cash which is an ok result.

[stewjames] 23/1/2009 15:17

I think I would take the part cash offer if the cash was just going back into my portfolio (it's not...I need it for something else) I think you'll get at least a 10% annualised return on it.

[deswalker] 23/1/2009 11:22

Is anyone considering taking the PCA here or is everyone anxious to get their 126p ?

[old boy returns] 16/1/2009 12:08

As suspected it was just a well timed ploy by the IS purchasers to get a quick settlement on the £2M warrantee. Has obviously put a dent in the Theoretical Max Value of Letchworth shares. That together with very low interest rates (lower return on cash tied up) and the pound starting to strengthen against the Euro (lower sterling value of big Euro deposits retained against warrantees) are pushing me in the direction of the all cash option. I quite fancy constructing my own corporate bonds and preference shares portfolio out of the £75K I would get. Some excellent yields around right now relative to base rates and a £75K fund invested in a spread of bank preference shares could cover the interest on a £300K tracker rate mortgage.

[scburbs] 16/1/2009 11:03

StewJames,

Looks that way. From the purchasers perspective they had £1m they could access in escrow and £1m that they would have had to claim off the remaining FWY company stripped of most of its cash. It is quite understandable that they wanted to use the massive leverage created by the cash return needing court sanction to secure the full £2m without argument.

From FWY's perspective I suspect this has also played into the hands of the Letchworth shareholders. Whilst they have lost the £2m I suspect this was always expected to be the case and it is likely that the percentage of FWY shareholders that accept the case sum will be materially increased by this little drama! The more shareholders that accept the cash the better return for Letchworth shareholders if they can outperform on the remaining claims.

[stewjames] 16/1/2009 09:33

That's better, and quite amusing. ISI appear to have settled for exactly what they'd have got anyway. Perhaps all they were after was speeding up the process.

[etarip] 16/1/2009 08:14

Further to the announcements made on 30 December 2008 and 7 January 2009, with
respect to claims from the ISI Purchasers totalling GBP4,564,754, the Company is pleased to report that agreement has been reached for the settlement of all
present and (with limited exceptions) future, known and unknown claims arising
from ISI SPA for a cash consideration of GBP2.0 million payable by Fayrewood
(the "Settlement").

You were right Des.

[deswalker] 08/1/2009 11:19

This is a very good buy at 112p IMO.

[stewjames] 05/1/2009 22:09

I'm surprised they made no mention at all of the IS situation. Didn't want to potentially prejudice proceedings?

If they are forced to alter the terms, will we definitely be given the opportunity to modify our votes?

[scburbs] 05/1/2009 16:18

Court hearing date is 10 February, so they have until then to confirm that the IS claim is capped at £2m. Provided they can do this then the return should hopefully go ahead as planned.

[etarip] 04/1/2009 14:24

StewJames:

Yes, I agree. If the new figures were say 115p or 87p and shares (both down 11p) then the latter is more attractive.

In fact 87p and shares would be even more attractive than 98p and shares taking into consideration my supposed 11p drop in the cash offer.

However, this is all speculation and we will find out more next week.