Tiger Royalties And Inve... Share Discussion Threads

[witteklip] 17/1/2011 14:41

Simon Cawkwell - 14 Jan'11 - 19:57 - 72 of 90

Re: "Apparently Bruce Rowan has refused an offer around TNAV (i.e. 4.7p) for his stake."

That makes sense.

Bearing in mind that TIR appears, to me, to be run principally for the benefit of insiders it also makes sense that disregarded minority shareholders would benefit from group action in which we had the power to force an EGM. With that we would have a means to force positive action or redistribute the assets away from the control of otherwise disinterested insiders. (Surely we can put our funds to better use.)

Skyship correctly says that I have already attempted awaken the snoozing Tiger. I tried to get sufficient shareholder support to force an EGM and failed. Several people kindly offered their support but I was unable to get sufficient backing - partly because TIR failed to release the names and addresses of shareholders at my request (as they were required to do) Also, I was unable to find a willing and suitable front-man.

As for people not turning up at the AGM - I am afraid that many people believe that taking the effort to turn up to an AGM as a single minority shareholder is pointless. And they're probably right. What is required is a gang of us armed with proxy votes and an articulate, well informed representative.

I do not doubt that there are more than enough unhappy shareholders to flex our muscles meaningfully - it is simply a matter of getting us all to act as one.

If anyone has the time to try again - they will have my support.

How about SKYSHIP or Simon Cawkwell? Is there anyone able and willing to front us?

TraderABC is right - all we need is the ability to act in concert and the need to call an EGM becomes a last resort - the sleepers at TIR will then be forced to awaken, listen and act in our interest.

As a start; what about someone drafting a constructive letter to the sleepers at Tiger that we can put our signatures to?

Personally - unless we can put together a shareholder group with clout - I would prefer to dump the board, sell the assets and get our money back (even the listed shell also has a value) - so even after costs 4.7p should be achievable.

[skyship] 16/1/2011 15:55

As stated above CB answered the letter addressed to BR. However I received no reply to my follow-up letter:

Mr Colin Bird
TIGER RESOURCE FINANCE
4th Floor
2. Cromwell Place
London SW7 2JE
ROYAUME UNI 8th October 2007

Dear Mr Bird

RE: TIGER RESOURCE FINANCE – "TIR"

My thanks for your 25th September response to my letter of 24th August. From your opening remark it would seem as though my original copy addressed to Bruce Rowan must somehow have gone astray.

I feel sure you would not wish to enter into protracted correspondence, so let me assure you it is not my intention to do so. I would however like to comment upon a few of the points in your reply, leading to a final reminder for an answer to the principal point of my last letter.

Once again, following the order of items listed in my first letter:

1. "Moribund" may have been a harsh description of activity in the light of your remarks; however the outcome IS torpid. As it has remained torpid for more than three years, perhaps the time has come to question either your procedures or objectives

2. My thanks for a partial answer to my question. It would of course be interesting to know what MIT actually is, in the same way as you provide brief descriptions of all the other holdings

3. Point made and received. I am pleased to acknowledge my mistake and to hear that the Board is seeking to cap operating costs

4. We must agree to differ. I accept the exceptional performance of past investments; however I query the high cash balance and lack of new investment over the past three years – as per 1) above

5. We are agreed as to the advisability of share buybacks. However the lack of any outcome vis a vis a reduction in the excessive NAV discount surely merits at least a consideration of alternative measures to enhance shareholder value.

I was disappointed therefore that you failed to comment upon the principal content of my 24th August letter – namely the proposal of a General Tender Offer. As stated in my letter, the benefits can be summarised as:

a). Reducing the future NAV discount

b). Providing shareholders with a cash bonus more than compensating for past lack of dividends

c). Utilising a fair %age of the cash reserves for which TIR has had no apparent use over recent years


I hope that you will be able to comment upon this one particular aspect.


Yours sincerely

[simon cawkwell] 16/1/2011 15:54

SKYSHIP,

Please could you reproduce CB's reply.

SC

[skyship] 16/1/2011 15:49

Found the letter - I see I addressed it to BR rather than CB. It was CB who answered!

Mr Bruce Rowan
TIGER RESOURCE FINANCE PLC
2. Cromwell Place
London SW7 2JE
ROYAUME UNI 24th August 2007

Dear Mr Rowan

RE: TIGER RESOURCE FINANCE – "TIR"

Perhaps the only disadvantage of no longer living in the UK, is that I am in practical terms unable now to attend the AGMs of companies in which I invest both my pension & personal investment funds.

That said, I was pleased to read that you welcome shareholder comment, so I would now like to pose a few questions and suggestions:

1. TRANSPARENCY

Over the past few years, in a time when every listed company has sought to improve shareholder communication and investment companies in particular have provided more regular asset valuations and portfolio declarations, you have moved in the opposite direction with now just Quarterly NAV declarations and Half-yearly portfolio declarations.

Over the same period the dealing activity of TIR has been almost moribund, so the previous reason given of "necessary secrecy so as not to hinder stake building or liquidation" clearly has no base in fact.

Might I therefore suggest that you immediately, in the interests of good shareholder communication, change your reporting to:

# NAV declarations - weekly
# Portfolio declarations - monthly

2. MIT VENTURES CORP.

Listed in the TIR portfolio is a holding valued at £40k and described merely as MIT Ventures Corp. Loan Note. Could you please provide some information on this investment, in particular whether we earn any interest, whether there is any capital upside and when it is due for repayment?

3. ADMINISTRATIVE EXPENSES

Over the 3 years of 2004/5/6 Administrative Expenses have escalated markedly as a %age of Shareholder Funds:

2004: 3.7%
2005: 4.2%
2006: 5.4%

In view of the relative inactivity over this period, could you please advise why such an escalation has occurred, how it can be justified and whether you recognise that a cap on costs should be instigated.

4. CHAIRMAN'S STATEMENT – 26th June 2007

A very brief study of the TIGER portfolio shows a bundle of frankly rather poorly performing mining companies, saved wholly by the holding in Franconia. Fortunately the overall performance of the portfolio relies on the two major investments in the junior oil & gas exploration sector – together accounting for over two-thirds of the TIR non-cash portfolio as at end May'07. In spite of this fact your Chairman's Statement of 26th June makes absolutely no mention of OIL. Could you tell me something as to your thoughts in that area?

5. INVESTMENT STRATEGY & PERFORMANCE

Again over the 3 years of 2004/5/6, a period of massively increasing commodity prices, soaring share prices and almost historically low interest rates you have been keeping an average of 45% of TIR net assets in CASH. This policy has quite naturally severely constrained the investment performance of TIR.

To respond that over this period there was a lack of assured good investments in the Natural Resource sector is patently absurd. With hindsight of course, just buying into the leading global miners (BHP Billiton, Anglo-American, Xstrata etc.) would have proved well worthwhile, as would have been a policy of delegating responsibility by buying into any of the leading Natural Resource investment trusts. Sitting on CASH in such boom conditions shows what can only be kindly described as questionable judgement.

Of course, we can't wind the clock back, but equally an alternative to the recent relative failure surely needs to be found.

The Board's principal responsibility to shareholders is to maximise shareholder value. Other than through investment performance, the Board in my view quite correctly sought and received shareholder approval for a series of Section 163(3) share buybacks with the stated objective of reducing the share price discount to the underlying NAV.

However, the Scheme has only partially been successful. By buying-in stock at such a discount to NAV, the underlying NAV per share has been improved; but over the period of the buybacks the NAV discount has simply widened further. A couple of weeks ago, when Ascent Resources was trading above 30p, the NAV discount exceeded 50%!

Might I recommend a solution:

GENERAL TENDER OFFER

Another tactic used by many listed companies has been to return cash to shareholders via a general tender offer. This has the subsidiary benefit of reducing the NAV discount as it confirms the Board's intent to more closely align the share price to underlying value. What can be done once, can be done again should the excess discount continue.

In the case of TIR a 1 for 3 buyback @ a price in the region of 4.5p-5.0p / share would seem to be appropriate bearing in mind the current Market price of 3.65p; the current Gross NAV of c.6.3p; and the recent share price intra-day high of 4.85p-5.0p.

Allowing for costs of 200k (perhaps too high an estimate), the cost of the tender would be £2.82m-£3.11m; ie an amount easily fundable from existing cash balances.

I suggest that the above course of action will:

a). Reduce the future NAV discount

b). Provide shareholders with a cash bonus more than compensating for past lack of dividends

c). Utilise a fair %age of the cash reserves for which TIR has had no apparent use over recent years

I assume that you will wish to discuss the contents of this letter with both other Board members and retained professional advisers, so I have forwarded copies to:

# Colin Bird
# Michael Nolan
# Davy Corporate Finance
# WH Ireland

I look forward to hearing from you regarding the various questions above; and most especially regarding the Tender Offer proposal. Please do feel free to respond by Email.

Yours sincerely

[simon cawkwell] 16/1/2011 14:07

maxbubble,

All appreciative comment is welcome. However, I do not think I was ranting. I was merely warning my fellow Britons that we are utterly needlessly sleepwalking to a considerable economic disadvantage.

Simon Cawkwell

[maxbubble] 16/1/2011 13:54

Bruce has done a number of deals with the Lenigas brothers, so it was just a matter of picking up the phone for some money.

Simon btw I enjoyed your jolly rant on the minesite forum.

[simon cawkwell] 16/1/2011 13:46

topvest,

Picky he may be. But he must comply with the company's declared objectives. Further, I think he would have quite a problem explaining to a Court why he personally took £150,000 of REM, now worth £1m+, but TIR did nothing. Indeed was any board minute prepared on this decision - you know, conflict of interest and all that?

The interesting law is S994 of the 2006 Companies Act.

I would also post here circa 22 pages of legal opinion that I was sent overnight by a really top flight solicitor (one of those £1,000 an hour corporate finance animals). However, the bulk is in the form of an attachment and published by Sweet and Maxwell who, I do not know how - I certainly know why, preclude copying and pasting. I await an estimate of what it will cost me to get into Court.

Simon Cawkwell

[traderabc] 16/1/2011 13:46

So is there anything we can do about this situation?
How about a shareholder revolt? Or more realistically the threat of one?
Could we start a TAG (Tiger action group) search out holders private and institutional, unite under a common agreement ie Tiger should return the cash to shareholders, and give 'em hell till they relent.

Or am I being naive?

[topvest] 16/1/2011 13:25

Simon - maybe you have put your finger on it. That would really explain the impasse. It's happened before with Bruce Rowan when he is on board with other high profile board members - a good example was Capricorn Resources with Brian Moritz and Phil Edmunds. At the end of the day Bruce is his own man, and with £1m+ invested here, I suspect he is rather picky on the deal to be done!

[simon cawkwell] 16/1/2011 13:14

Gentlemen,

I would add that Bruce Rowan personally bought 100m ZEST (now Rare Earth Minerals) at 0.15p about eight weeks ago. These have been circa 1.5p and are currently 1.1p. It is true that I think REM should really be 0.5p or lower (I traded them from 0.45p to 0.55p). But one must ask oneself why, if REM were to hand at 0.15p, TIR did not take a suitable tranche. This failure by TIR is not right or just.

Simon Cawkwell

[simon cawkwell] 16/1/2011 13:10

Gentlemen, Fordtin,

I have this morning received this opinion:

"The main problem is that Colin Bird and Bruce Rowan rarely, if ever, see eye to eye on investments. This probably accounts for Tiger's somewhat stagnant investment activity over the past few years.

Bruce has always preferred working with John Watkins and Tony Scutt, his wingman, at AIM-listed Starvest (SVE), which has the same business model as Tiger, but which has always been the vehicle of choice when attractive investment opportunities arise."

Needless to add, if this is true, I find this wholly unacceptable. If two grown men, acquainted with the imperative of doing something, in fact do nothing, they are squandering company assets and overheads.

Simon Cawkwell

[fordtin] 16/1/2011 12:02

Morning Simon.

the quotes in the header come from the following two pages of the company website;





--------------------------------------

As you must be with yours, I'm very happy with the gains I've made from Orosur and other resource companies and was very surprised that Tiger's management opted to stay mostly in cash.
I had expected the appointment of Colin Bird and Raju Samtani to the board of Tiger to be the catalyst for an awakening. However, after being on the board for nearly a year and in light of the company's stated strategy, it seems they are not worthy of their positions.

[simon cawkwell] 15/1/2011 18:29

Gentlemen,

I presume that what follows, extracted from the head of this thread, is taken from TIR's accounts:

"Tiger Resource Finance Plc is an Investment Fund focused on the Resource Sector. The company is listed on AIM, the London Stock Exchange's Alternative Investment Market. Its mission is to invest in natural resource companies globally, capitalising on early entry level in mineral projects, and adding technical and management expertise where necessary.

The company intends to be a unique player in the Mineral Resource Sector, offering investors the opportunity to invest in several well-managed and well-researched Mineral Resource projects."

But TIR has done nothing of which to speak for a long time other than one or two disposals. In the meantime the cash pot stands at perhaps £4.6m or perhaps 57.5% of assets with no effort made at all to meet the company's own declared objectives. Further, there is no sign of expertise of any description being applied to companies in which the company is invested or might be invested. I think Bruce Rowan is pulling shareholders' legs.

This must cease.

I doubt if I am alone in having made well over 300% on capital deployed in resource stock long positions since March 2009. This has not been through luck but because glaring opportunity after glaring opportunity presented themselves. It would have been hard not to make this sort of return and more. So how can Bruce Rowan and his colleagues claim to have made any effort at all? They have been paid a lot of money to do something worthwhile and the fixed overheads are ever present sores with little to show for them.

Simon Cawkwell

[curt3] 15/1/2011 11:25

Perhaps BR has not been well....like in a coma or something ! I spoke to him about 6 months ago and he said (A) he was an honest man and (B) the directors had done a fantastic job in looking after the cash pile!!! I sent several emails over the past months to Samtani and Bird pointing out glaring errors on the website but didnt even get an acknowledgement even though I specifically asked for one. So much for investor relations !! In my view they are arrogant and contemptuous. They should take a lok at Altus Resource Capital to see how a resource investment company should be operated. One does'nt like to be rude, but they are a bunch of self absorbed assHALLO ..anybody there ??

[ntv] 15/1/2011 10:00

Major ShareholdersShares in issue:172.6m1p Ords Name Amount % Holding
Ronald Bruce Rowan 48,366,239 28.03
GLC Limited No 1 FURBS 6,200,000 3.59
TD Waterhouse 0 4.69
Other Directors Name Amount % Holding
Colin Bird 1,635,000 0.947
Michael Henry Nolan 1,315,000 0.762
Raju Samtani 500,000 0.290

[ntv] 15/1/2011 09:57

simon
glc limited owned 3.6% in november last year
some years back they bought alot of shares which were then bought back by the company
i used that as a signal to exit as well and vice versa this time when they appeared on the share holder register again
my guess is that they support the board

[topvest] 15/1/2011 09:28

Interesting - do you know if Colin Bird wants to use this vehicle to build something bigger (i.e. through a reverse takeover)?

It's always been interesting here that Tiger have adopted a very different strategy to Starvest. Then again, it's very similar to Gledhow Investments on PLUS which also just sits on its cash.

[simon cawkwell] 14/1/2011 19:57

Gentlemen,

Apparently Bruce Rowan has refused an offer around TNAV (i.e. 4.7p) for his stake. I do not know why - I doubt if tax is inhibiting a sale.

But I think that it is completely ridiculous that shareholders should have to tolerate the failure of the company. It is going nowhere.

Of course there might be the sudden offer from nowhere which the directors have been working on for months. But, if so, they are being very quiet about it. And of course they have done nothing with the cash pile during this terrific bull run for resource stocks. That irritates me. I doubt if I am alone.

Besides, the directors are paid to do something. They owe a duty to do something.

Does anyone have a view as to how much is really held by BR and fans? And, if so, what chance might there be of unseating this presumptuous stupidity on the part of the board?

Simon Cawkwell - 020 7835 0868 / 0367

[chrisis33] 14/1/2011 17:07

Was tipped this a couple of months back by Fordtin - got around to buying in today. Good luck holders

[ntv] 14/1/2011 17:03

i was wondering whether BR is ready to sell his stake on to some party/parties who maybe more interested in building a resources fund
with very few new investments perhaps he has been waiting for an approach
TW and Tips have been using that statergy and have done well in building new funds ie:athol and DXR
maybe some new blood will inspire things to begin to happen here

[witteklip] 14/1/2011 16:25

P.S. - To the TIR directors - I for one don't give a hoot if your share prices doubles (as it ought to) - you're still on the hook. I expect to see you visibly running this business in the interests of all shareholders and earning your keep with visible, communicated deeds.

[kombimatec] 14/1/2011 14:09

It seems EK has spotted something I spotted 5 years ago if you read my old post. I guess we have to give them another chance to narrow the discount now EK is on board. Good luck to all.