Hwsi Realisation Share Discussion Threads

[acquisitor] 30/9/2019 17:57

I think the term "secured" might be misleading. Will need to go back and check the small print, but don't think there is real security involved. Still think the whole sector is dangerous at this stage of the cycle. Read my comment on Funding Circle. When at 430p I said fair value is 80p and they are now at 90p. I think FCH could drop below fair value.

[spectoacc] 24/9/2019 09:09

Distribute the pellets in specie to shareholders if it goes t*ts up? ;)

Drax can't get enough wood to burn but I guess it's like most boom areas - over-investment, more competitive pricing, lots of co's going bust.

[jonwig] 24/9/2019 09:00

I'd guess it's to a "leading wood pellet manufacturer". Maybe ring up their trade body, The UK Pellet Council. (I bet their get-togethers are a bag of laughs!)

As for HWSL, if their loans are in fact secured it might be a good investment. I'll wait for news on this dodgy loan.

[spectoacc] 24/9/2019 08:42

@Jonwig - I woke up in the night thinking the Holdings may have been misinterpreted. I need to get out more. I must still be smarting from the Woody ones I got wrong :)

Hmm interesting re £10.5m to £13m - are they rolling up the interest maybe? Surely they didn't lend more to a co that's barely hanging on? Reminds me of SQN & their Suniva fiasco.

I'm in for a few tho - the discount accounts for quite a bit.

...Tho I'm assuming the £13m isn't to TCG ;)

[jonwig] 24/9/2019 08:34

Spec - according to their H1 Report dated March 2019, their largest loan was of £10.5m. Then in July it was £13m! Strange!

Sorry about the misread of the holdings statements!

[spectoacc] 24/9/2019 07:53

1. Anyone know who the £13m iffy loan, referenced in June, is made to?
"...One of the Company's borrowers is in the process of undertaking an equity raise or company sale. Although the Board does not anticipate this process having an adverse impact on the ultimate repayment of the loan, which has a face value of GBP13 million, it understands that this process may take longer than expected, which could present the borrower with working capital cash flow issues. "

2. The Holdings RNS's showing increases in stake are not due to major shareholders buying more - they're due to the 1m shares the co bought back, reducing shares in issue & increasing % holdings.

[spectoacc] 21/9/2019 16:17

Lol @Jonwig.

[jonwig] 21/9/2019 15:20

Spec - in the Citywire Z-scores lists, it's maybe worthwhile looking at the big moves, and trusts you've never heard of.

For instance, a trust called WPCT suddenly appeared on the cheap list a while ago. I looked and it seemed a bit naff.

hiddendepths - a seller? Maybe, but the last two holdings announcements seem to have been adding to positions.

[spectoacc] 21/9/2019 15:01

Also come to this based on it appearing in the "cheap" list, tho Citywire's Z-scores are something of a farce - they see "cheap" as a Trust moving from eg a 2% premium to a 2% discount.

Some of the other lenders aren't fairing too well - the SQN twins have gone from premia to discount, and SSIF (which I hold) is on a perma-discount. More esoteric stuff (P2P, VPC, TORO) equally maligned.

Can't make up my mind about HWSL.

[hiddendepths] 31/7/2019 09:42

Seems the overhang is not over and the company has no firepower to buy back more shares.

I haven't got any idea why the seller didn't approach the company before they started and get the shares placed instead. Some institutions these days seem remarkably clueless.

Oh well, these situations eventually run their course!

[hiddendepths] 30/7/2019 21:41

Jonwig - I spotted this when it popped up as top of the cheap Investment Trusts list as the discount had widened so much.Yes, the three investments not behaving has been around for a while. They've had an impact on the NAV but more importantly the issue has clearly unsettled a large or largish holder, presumably one who thought the risks were lower, and they have been trying to exit - the stock is pretty illiquid and it's taken quite a while.I see this as a moderately low risk investment with a good yield and bought it as a long term position for my SIPP.

[vacendak] 30/7/2019 20:18

Not a pip in three years and four posts within a day.
Watching this thread as a favourite has paid off at last! :)

I have been looking into this one for a while now with the idea of buying into it at some point. Keeping the powder dry, maybe until early November when the doomsters drop anything with a UK tag on it.

[jonwig] 30/7/2019 18:56

The only negative thing I can find is in the 30/06 quarterly report:

During the quarter, much of the Company’s efforts were focused on working to achieve a successful resolution to three investments which are in the midst of a restructuring process. The Investment Adviser expects that these restructurings will ultimately be resolved in a manner that does not result in a material loss to the
Company.

Two of these borrowers are in the wood pellet manufacturing business and each are in the process of agreeing joint venture agreements with companies in the pellet and biomass industries to operate their respective businesses. The third borrower is in the process of raising third party equity. The Company has downgraded each of these investments and allocated increased amounts of IFRS 9 loss reserves, which are reflected in the NAV. A case loss reserve has not been established at this time, however, the Company continues to monitor the situation closely.
But it must have been in earlier announcements as well.

[elgordo] 30/7/2019 17:09

"Why the waterfall?" - something I'd be interested to understand too, having bought in April...

[jonwig] 30/7/2019 16:50

Strange, I've never heard of this. But it does look interesting, and why the waterfall since May?

Quote looks tight enough for a buyer, and yield is about 7.5%.

[hiddendepths] 30/7/2019 16:33

Hopefully that's the overhang gone then!

Bought some yesterday - it looked to me as though the fall was overdone.