Jz Capital Partners Share Discussion Threads

[jonwig] 10/3/2009 13:28

ROBIZM - the currency hedge basically just keeps the dollar liability constant. I wouldn't worry about it.

As for your suggestion, they'd need to raise 'new' money first, which could be zeros, convertibles, or even bank debt (though that would be a last resort).

[robizm] 10/3/2009 12:59

Glad it is not my real name up there.

[donaceaceace] 10/3/2009 12:55

Rob - Insider dealing is illegal :-

[robizm] 10/3/2009 12:54

I dont see why if you are paying off the old Zero's. I bought some at 19p and if they go any lower will buy more. I need to look at the currency hedge and see what is the most that can cost.

[jonwig] 10/3/2009 12:47

ROBIZM - that's a possibility, but would require a certain % majority at a Zero-EGM sort of thing.

14p now mid-price - nearer the bottom than yesterday!

[robizm] 10/3/2009 12:32

They could just issue new ZDP,s and use cash to mop up the rest if their is low demand. They have probably already sounded out large ZDP holders to see what they would want to do.

[jonwig] 10/3/2009 09:22

Had a closer look.
The market is valuing this like a commercial property company with high gearing due for early repayment but a big slug of illiquid assets.
A discount to NAV of over 90% isn't too unusual in that context.

Basically:

Assets ($m) -
Cash ............ 109
Listed equity .... 65
Listed debt ...... 26
Unlisted ........ 272

ZDP liability ... 181 ($ number plus hedge)

Cash will pay all but $72m of the ZDP.
Listed stuff = $91m and might not realise $72m in a market sale. (Also look at performance of TAL and Safety since the date of these numbers (IMS 9 Feb).

So the focus turns to unlisted stuff, which might not be realisable at anything close to valuation in the current market.

I see they are looking at alternatives to redeeming the ZDPs. I suppose they could try to arrange something like partial repayment together with a scrip issue of ords, but that would need ords holders' consent.

Something like 160p plus 3.5 new ords for each ZDP.
Then there are 260m ords in issue covering assets of $363m, or 96p/sh, ungeared.
Write that down due to worsening markets to say 60p/sh.

So if they can manage some sort of restructuring like this, the current share price of 16p will be very cheap.
They need to get a move on as the key date is 24 June.

[jonwig] 09/3/2009 18:19

Hi, Robert - TAL is down about 60% this month, and Safety is down too. So the quoted stuff in their portfolio has taken a knock.

I'd be a bit cautious about projecting the divi level, as this has only been in existence in its current form for less than a year.
The 4.5c might be the safest guide for the full year ... about 3p. (Even that's 18% yield!)

I'll have a closer look tomorrow with a view to buying some - relieved to have held off so far.

[robertsbb0] 09/3/2009 17:44

Hi John,

What on earth is going on here?

SP now 17p.

If the ZDPs are repaid in June then the $188m required wipes out all the cash plus the listeds leaving about $280m in unlisted (£200m) or £2 per share with NO DEBT.

I can't see any write-downs bringing the £2 down to anything near the current share price

At 31st December 19 out of the 21 unlisteds were up to date with their interest payments so the income stream should only be down 10% or so. They paid 2.9p at the interim for 3 months so the final should be 4-6p.

All last week the share price dropped with more purchases than sales.


Jordan & Zalaznick between them own about 20% so this is not doing their personal wealth any good. Or are they planning to take this private?

As far as I am concerned that is the only thing preventing me making a big bet on this.

I would be interested to hear your thoughts.

Cheers

[jonwig] 02/3/2009 12:23

The unaudited monthly net asset value of the shares of the Company at the close of business on 30th January 2009 was as follows: $2.92 per share.

So an (ungeared) discount of around 86% @ 27p.
Unbelievable.

[jonwig] 18/1/2009 11:41

TAL International Inc, 6.8% of portfolio.





From latest filing:

While our business environment may become more challenging as we move forward into the end of this year and 2009, we remain optimistic about the performance for TAL. As mentioned above, containerized trade growth is still expected to be positive in 2009, and we believe that direct container purchases by our shipping line customers will continue to be constrained, moving more container demand to leasing companies like TAL.

[jonwig] 18/1/2009 09:36

Safety Insurance Inc, 10.1% of portfolio:





From latest filing:

As of September 30, 2008, our portfolio of fixed maturity investments was comprised entirely of investment grade securities. We hold no subprime mortgage debt securities. All of our mortgage-backed securities are either U.S. Government or Agency guaranteed or are rated Aaa/AAA. We believe our current portfolio position and strong underlying operating cash flows provide sufficient liquidity to meet our needs. As of September 30, 2008, we maintained $107.8 million in cash and cash equivalents and we have no outstanding debt.

[jonwig] 17/1/2009 12:47

Thanks for that, Hoveite.
I come to similar conclusions, and their valuation principles look to be pretty standard.

I see that 34% of their portfolio is in debt or mezzanine security, and seems to have been written down pretty conservatively already, with a few companies having significant write-downs.

I've added the main investments to the header. Together they make up some 56% of their portfolio.

To be going on with, they're paying around 3p dividend pa (no tax credit attached), but that may have to change when the zeroes are redeemed, depending on just what they do.

[hoveite] 16/1/2009 16:59

I think it is worth considering what the picture will be like after the zeros are redeemed on 24 June 2009 (assuming that they aren't refinanced of course).

The NAV per share on 28th Nov was $3.33 per share. With 97,527,916 shares in issue this gives Net assets of $325m.

There are 45,662,313 zeros which will be redeemed at £2.1589 each which means £98.6m pounds will be due on 24 June 2009. At 1.53 £/$ (rate on 28 Nov) discounted by 8% * 7/12 (they accrue at 8% a year and had 7 months to go) this comes to $144m attributabal to the zeros on 28 Nov.
If we add that $144m onto the net assets we have gross assets of $469m.

If 47% of the $469m was in tradeable investments that gives us $220m worth of tradeable investments and $249m worth of unquoted securities.

However if £98.6m has to be raised at an exchange rate of 1.46 that means $144m of those tradeable investments will have to be sold to redeem the zeros, leaving $76m of tradeable investments.

So following the redemption of the zeros the NAV of $325m would be represented by tradeable investments of $76m and $249m of unquoted securities.

At a share price of 51.5p the market cap of JZCP is £49.73m which is $72.6m.

So if you look at the situation after the zeros are redeemed you could be getting the quoted investments at around fair value with around 3.3 times the value of unquoted stuff thrown in for free.

[jonwig] 16/1/2009 13:53

Prompted by this, read elsewhere, for which thanks:

davebowler - 16 Jan'09 - 12:56 - 816 of 817

JZCP-Jordan Zelaznick partners looks cheap . As at end Sept 47% of portfolio was in tradeable investments see page 9



yet it is at a 78% discount to asset value



Shows barely a blip in value since then.
So we can buy a portfolio of quoted investments half price with same amount
of unquoted ones for free.

[jonwig] 16/1/2009 13:51

. .



~~~~~~~~~~~~~~~~~~~~~~~~~~

Significant holdings (Dec 2015):
Edgewater growth CP ... 13,494,037 ... 20.8%
Jordan Family Trust .... 7,719,240 ... 11.8
D W Zalaznick .......... 6,000,443 .... 9.2
Abrams CP .............. 5,694,389 .... 8.8
Leucadia Fin Corp ...... 4,527,563 .... 7.0
Finepoint Capital ...... 4,413,067 .... 5.3
First Eagle I M ........ 4,366,136 .... 6.7

TOTAL ...................... 65.0m
~~~~~~~~~~~~~~~~~~~~~~~~~~

Net asset values;
31/03/16 ... $10.24 = 706p
31/05 ...... $10.32 = 711p [xd $0.15]
30/06 ...... $10.41 = 788p
31/07 ...... $10.41 = 853p.
31/08 ...... $10.40
30/09 ...... $10.41
31/12 ...... $10.12 = 816p
31/03 ...... $10.14 = 780p
30/04 ...... $10.08
31/05 ...... $ 9.93 = 766p