Not even a complete trading day into the announcement and already up 20%. Well worth the weight. Not even the slightest inclination to take Some profits. |
'That would be if there were further anticipated realisations likely to go through in the next 8 weeks.'
That is entirely plausible of course. The sales announced on Friday mentioned the sale of the 'majority' of the superbonus bonds. They could have been more specific. They have used 3 ESCOs (splitting more or less equally) and it seems that it was the sale of 2 of these which occurred Friday. So, by my reckoning there should be around £9mn to come (hopefully soon).
Cash position at last results was 13.7 and then they paid a £5mn div leaving £8.7mn. The whole portfolio was £77mn so I would guess around 10% of that amount was needed as cash collateral. Hence the need to keep the cash in the company. Obviously, with the reduction in portfolio size with the sales more cash will be released. |
As far as I can figure there would only be one reason not to immediately get on and return capitalThat would be if there were further anticipated realisations likely to go through in the next 8 weeks. |
The Board of AEET have always felt to be very clunky/procedural.
I suspect that they will want a new NAV and maybe even the annual results to be out prior to the capital return.
It may be that there is a settlement period for the realisations (one is in Italy after all!) as the announcement said 'agreements' to realise.
Maybe that time allows the wealth managers to continue selling... |
10-20% cash is the norm for repayment of capital in wind down, although with ASLI it is as low as 6.5%.
It does make you wonder what they might mean by the word "months". |
Good analysis there. I would just caution costs are through the roof so not a huge amount of accrued filters through. Should really be trading higher than it is but happy for run off to work its way through. In reality I don't have much choice given how big my position is. |
 HE, yes, but must also add back net accruals since the published NAV date (30th June 2024). The net effect is around 4p.
Taking this into account, then the discount at 57p is 37.6%. But this is not the story; after adjusting for a repayment of £26.5mn (using FX of 1.205), the projected discount becomes 58.4%.
There is more - net cash as of 30th June was £9.6mn (adjusted for dividend payable and accounts payable but adding net accruals). What this means is that the two numbers above become 43.2% and 73.1%. You would have to be patient to derive all of that benefit (almost potentially quadrupling your money, except they have stated that they are a marked seller and this would have some effect, obviously). Offsetting this is that income appears to be healthy across most if not all remaining assets that have not been impaired (around 5% of assets, although this impairment is already reflected in the NAV).
If the share price was 65p, then the two numbers would be around 33% and 56% with the non-cash-adjusted future discount at 45% - something that is extremely feasible in the short term. The large seller is not bothered with the future, but the recent sales have to affect their strategy to some extent unless they are prone to frantic recklessness.
When an IT is at such a large discount and a material event such as Friday's (announcement) is made, something has to give from the pure arithmetic alone, absent of clear and obvious opposing factors of significant scale. Reading through the performance and description of their remaining assets, this is not the base case at all.
By the way, at Friday's pre 4.13pm share price of 51p mid, the future cash adjusted discount was 85.8%. But I'm sure Rathbones are analysing this assiduously. Even if you thought the liquidation of these Italian assets had but a 50% probability in 2025, 51p is/was not the right price, even for those high-flying intellectuals at Rathbones, to be selling. |
Fridays RNS details 2 transactions that have realised E31.84M. However I'm assuming the remaining approx E10M Superbonus investments are also currently being realised as per the timescale of end 24/early 25. |
You need to reduce nav by the 6p paid out |
I think, furthermore, that this BioLNG asset achieved €540k more than the June 2024 valuation, taking all income into account. Some of that will already have been realised by shareholders as I presume it formed part of the 6.1p ops paid a few months (4.5) back.
One might argue that they have lost a decent earner, but then that is not the point of this exercise anyway. |
The BioLNG loan was due to be repaid in 2031 so that's a big plus. |
I was doing everything from published information (ShareScope) but in a great hurry (obviously). I will do more due diligence over the weekend to sharpen things up.
Nevertheless, I will be pretty close as is. Now I need to look carefully at all the other investments remaining to see what is the reasonable set of outcomes. I do not look at this often as you could die of boredom - except every three months or so, when it goes Boooooooooooooom! The 6.14p dividend announcement was its previous hurrah. This more so, and I think we may see vigorous trading on Monday morning. |
I was surprised that I managed to pick up a few more also, Chucko.
That additional realisation is a bonus.
I've been working on a slightly lower NAV and that the rump (ex remaining Superbonus) might not be quite as attractive.
Euro area rates coming down must be helpful though. |
67p at 40% discount which was where it [discount] was prior to more Rathbones liquidations. |
What a time to publish! Got 10k before the world woke up.
This is stellar. The market cap was £43mn prior to the announcement and they are getting back £26mn in short order. NAV of 95pps meant that, after turning this stuff into cash, the new discount would theoretically be 66%.
To maintain, say, the 50% discount, the share price needs to be 60p or so. I did these calculations after buying the shares (adding) as it was so clear anyway. |
Little bit of good news just come out. Significant return to shareholders not far away all being well |
Added a few more at 52.22p this morning. Hopefully we will get news on some realisations soon. |
That divi was for the entire year. They are paying out infrequently now, as they stated they would, so this dividend was not inconsistent with income - hence the NAV, ceteris paribus, is more or less unaffected. |
Langland - don't forget we had the 6 odd pence 'divi' last year.
These small trusts in wind down do tend to find ways for the NAV to slip despite that not being the original pitch!
The superbonus monies (as others have said) should be substantial versus the share price. At least the penalty interest on them is attractive if further delays are experienced. |
Not a lot I can add to recent comments but....
Let's say NAV is reduced to 90p or say £73mn. Once superbonus is received cash should be about 50% of the NAV. As HP points out the portfolio gets income around 8%+ and probably about half the hedging collateral can be release since no longer required. Therefore, a purchase at 51/2 now may realise 70/75% upside for half your holding over the next few months via a tender offer mechanism. All IMO. |
The Rathbones effect is unhelpful to short termers. For long termers, it could hardly be more helpful. The discount post distribution of anything like the amount possible through current cash holdings plus Superbonus will be huge. Not that the remaining assets will be easy sales, but it does look a tremendous risk/reward. |
Thanks hughpants, I was hoping they were getting close to 40p in cash, even though the share price says otherwise |
On re-reading last results to end June they state they had £14.9M cash in August.
Take off the following;
£5M (dividends) + £2.5M (hedging euros) + £0.8M (commitments) + £1.05M (creditors)
which gives net cash of £5.5M or 6.7p. Can also add 6 month earnings on to that.
Then £28.8M of Superbonus investments anticipated to be redeemed by early 2025.
"...The Investment Adviser believes that the Superbonus investments are likely to be substantially redeemed by the 2024 year end with full redemption in early 2025 although timing remains uncertain."
That's another 35p per share if all redeemed. So AEET could have around 40p per share in cash now.
And have they managed to sell any of the other assets? They've stopped the quarterly updates so who knows.
I think NAV will be written down to about 90p just because the sector is in the doldrums but AEET is cash generative and ungeared so I don't think any NAV reduction should be too drastic. |
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