Ocean Wilsons (holdings)... Share Discussion Threads

[last of the mohicans] 09/12/2024 05:45

Mancman1,

Well OCN are up 100% from where they were 5 years ago if you look at the chart at the top of this thread. given they make up so much of Hansa's valuation it leaves very little for the rest of the portfolio to have grown in that time especially once you factor in Findlay Park America's performance over that time period as well!

Also OCN are barely higher now than they were in 2011, in other words 13 years of zero performance equals the same for Hansa effectively but I guess Mr Edelsten didn't bother to go back that far!

More fool him

LOTM

[mancman1] 08/12/2024 21:09

The FT today has a number of articles on the rather downtrodden Investment Trust sector. There are some interesting comments by Simon Edelsten in today's FT re Hansa.

He concludes that the large discounts on IT's "look more like opportunities than warning signs", and indicates that his largest investment is in the Hansa Investment Company. "Its model is the family trading business of history and building family wealth over generations." He points out that says its assets have grown 50% over five years. He makes what I suppose is a positive reference to William Salomon who has "guided Hansa over the decades" and speculates that the sale of Wilson Sons would "most likely lead Hansa to focus on its holdings in liquid investment funds. A smaller discount is likely to follow."

This is not strictly related to OCN, of which there is no mention, but I thought the positive spin on Salomon was interesting. A look at the ten year HAN chart indicates strong NAV growth but a very small share price increase, and a widening of the discount in the past five years. I guess his assumption is that the discount will revert to the mean, and that the sale of Wilson Sons will be a catalyst. I imagine that he has had some contact with the management of HAN before writing the article, and they would I am sure welcome any positive comment on a fund that is beneath most people's radar.

[last of the mohicans] 07/12/2024 21:11

Hi varies,

Yes there is the 3 way currency situation.

The dollar has strengthened a little against the £ (which help on dividend conversions if it continues)

However the biggest concern has to be the outlook for the R$ which looks to be very poor indeed, now whether that turns around in 9 months time is anyone's guess, but right now I'd say its quite possible it will drop to R$6.5 to the $ & the deal was done at R$5.65.

Given how much of Wilson & Sons income is in $ I'd say there is going to be more than enough profits for the $22M per quarter dividend to continue.

The 2 families look to have made another massive blunder its just like 2007 all over again.

LOTM

[varies] 07/12/2024 16:55

LOTM
Your warnings about the Brazilian currency are proving well justified.
There seems to be little movement at present in the £/US$ rate but, if this rate changed, the value of the Brazilian Real in relation to the £ would surely be of greater consequence to OCN shareholders.

[mancman1] 07/12/2024 16:09

Many thanks for your comments. I thought it seemed over-optimistic, but I don't have your in-depth knowledge.

[last of the mohicans] 07/12/2024 07:14

Positive write-up but he didn't take into account the R$ issue, 7% loss of value over 7 weeks ! on the sale price.

While he did a lot of work on the Investment portfolio, he failed to see that the portfolio has only increased by what was it 20% in 17 years!

The dividend data is incorrect maximum that can be issued is $22M per quarter & therefore the maximum amount OCN would receive is around $12M per quarter (thankfully that amount was priced in $ not R$).

The tender offer stuff is just rubbish, 50% of holders taking it up ! the 2 families control over 50% for goodness sake, a Material Fact never mentioned in the whole document!

A counter offer isn't coming SAS have already snapped up 12% of Wilson & Sons shares in the open market on the cheap (as disclosed by them overnight.

LOTM

[galeforce1] 05/12/2024 16:39

Thanks for that. I've got out of date on OCN. This article seems like a good way to catch up.
So the shareholding in Wilson Sons in Brazil is now sold, and the sale settles in 2025.
That's a pity, because I am invested here because Wilson Sons seemed like a good company in the right place.
But it seems foolish to sell out while there is such a big discount to NAV.

[mancman1] 05/12/2024 09:12

Not very proficient at this!

[-url]theoakbloke.substack.com/p/ocean-wilson-idea-10[/url-]

[mancman1] 05/12/2024 09:10

Very long positive piece on the oakblokesubstack.




[-url]hxxps://theoakbloke.substack.com/p/ocean-wilson-idea-10[/url-]

[last of the mohicans] 05/12/2024 00:07

Hi Piedro,

Yes can only live in hope ! the longer it takes the more dividends will accrue to!

LOTM

[piedro] 03/12/2024 16:19

From the latest Wilson Sons presentation ...

Change of Control Transaction Highlights

The closing of the Transaction is subject to the satisfaction of customary conditions for this type of Transaction, including, but not limited to, approvals from Brazilian antitrust authority (CADE) and Brazilian National Waterway Transportation Agency (ANTAQ).



- forever an optimist

[last of the mohicans] 02/12/2024 21:51

Hi All,

I'm not sure if anyone is really paying attention here any more or not ?

The preliminary November numbers are now out!

Tec RG = 87,000 TEU's against 65,300 that's up 33.2% on Nov23
Tec Sal = 48,800 TEU's against 35,300 that's up 38.1% on Nov23

Total year to date 1,243.8 against 971.4 that's up 28% on 2023

If you do the math's Tec Salvador's current capacity is around 550,000 TEU's a year, in other words its virtually at full capacity currently until the back area gets filled in (see latest presentation etc)

It is meant to have 2 new routes starting Manaus ( the 1st ship of which has just been cancelled which is annoying as it was meant to arrive in 3 days time).

COSCO which looks like it is going to start out fortnightly (this service has been running previously on an adhoc basis under the general "Tramp" route classification.

These additions will really stretch the terminal to its current limits in the month's ahead, which is great for profitability, just wait to you see the Tecon's Q4 numbers but sadly we won see any of it will we ! (unless the deal falls through)

Oh & the R$is now at over R$6.05 to the $ as opposed to R$5.66 on 18th Oct when used in the offer document, so the deal has already lost another 6%+ of its value in about 6 weeks.

The stupidity of these 2 families & the independent directors of OCN who signed off on this knows no bounds.

LOTM

[varies] 18/11/2024 11:38

LOTM
Thank you so much for digging these historical details out and posting them here.
I had never heard of the Alto Parana Development Company.
The share structure at Hansa is inequitable, as you say, giving the Salomon family control of OCN whilst owning only 26% of the capital but this has always been so and openly declared.
This sort of arrangement was not uncommon in the 1960s and applied, for example, at Savoy Hotels (where the great majority of shares held by the public had no votes) and, to cite a less known company, the Queen's shoemakers, H & M Rayne.
I believe that the Stock Exchange has for many years discouraged the issue of shares with different voting rights but, of course, this policy does not affect those already in existence.

[last of the mohicans] 18/11/2024 02:56

Hi xxx,

I found this in the Hansa Annual report I guess it answers your question regarding the history

"Hansa Investment Company traces its origins back to 1912 when the Alto Paranà Development Company was launched to develop forestry in Brazil. Having become an investment trust company in the late-1940s, the Company became closely associated with the Salomon Family, initially through Sir Walter Salomon, whose family trusts became substantial shareholders. The late-1950s also saw the acquisition of a significant shareholding of Ocean Wilsons Holdings Limited through the issuance of the 'A' non-voting Ordinary shares by the Company's predecessor, Hansa Trust. Over the following decades, the Salomon family helped to build the publicly-owned and independently run investment company we know today, with its focus on delivering reliable long-term asset growth for shareholders.

The wider Salomon family remain significant investors in the Company. William Salomon, Sir Walter's son, a director of HICL and Senior Partner of the Company's Portfolio Manager, is interested in 10,347,125 of the shares held by Victualia Limited Partnership, representing 25.9% of the voting share capital. In addition, William Salomon has further interests in the Company's shares; the total interest is detailed in the Directors' Interests section. Other members of the wider Salomon family, who are also descendants of Sir Walter, are interested in a further 12m shares in the Company."

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


Hansa own 9,352,770 shares in OCN.

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


Now here's the thing I've just worked out ......


The family have the voting rights to @ 55% of HANSA yet they actually only own around 1/6th of its assets. Yes that's right just 1/6th of its assets (40M voting shares + 80M non voting shares in issue). They own lots of the voting shares but very few of the non voting ones.

So if we exclude the OCN holding for now HANSA is otherwise worth roughly £320M & so the 2 family's have under £55M invested there.

Having that long running strategic review that boosted the share price of OCN shares's also boosted the total value of HANSA on which 1% management fee (as well as director fees) has to be paid, ie 5/6th of the fees are effectively paid by others for the last 2 years & most of 2025 as well now.


Now turning to OCN, the 2 families own roughly 26% of OCN & if we add on 1/6th of the 25% of OCN that HANSA own, the 2 families effectively own just over 30% of the company despite having 51%+ of the voting rights.

If I exclude the cash for dividends for now, the OCN assets following the sale equate to around $925M or £740M. So the 2 family's effectively have roughly £225M invested in OCN.

That's roughly 4 times the amount they have invested in HANSA !

LOTM

[last of the mohicans] 17/11/2024 10:32

Hi xxx

Sorry, No I don't know when the Saloman family became involved in Ocean Wilson's.

varies

Would most likely be the person to be able to answer that for you as I think they are the longest standing shareholder here & often write about old Saloman in there posts.

LOTM

[xxx] 17/11/2024 10:17

Everyone wants to become a rentier. Earning fees regardless of service/product delivery. The management of Hanseatic are worse.
.
They are busy fools, selling the best bits and retaining the dross.

Uncomfortable feeling, but what does that make us [shareholders]?

ps.
LOTM do you know when the Saloman family became involved in OW ?

[last of the mohicans] 16/11/2024 14:54

Hi c3479z1,

I've not really looked at the Polar Tech fund to be honest. If it has matched the index the past few years then its a pity they didn't discover it earlier.

They've sold down the Findlay Park American fund at least 3 times during those 17 years & virtually sold out all of it or most of it at one point before buying a chunk of it back on another occasion. Why did they sell down the stake because the fund was outperforming everything else so much that it was becoming to big a percentage of the portfolio for there liking.

It will be hard to get a definitive figure for it because we only get to see 2 glimpse's of the actual holding a year, but I'd be very surprised if the Findlay Park American fund didn't account for well north of $30M of that $54M figure.

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

Hi jane deer,

See post 1822 from 11th October.

The 3 Dividend's paid in 2024 so far are worth R$5.32 per OCN share which means if OCN passed that amount fully on to shareholders the dividend would already be around £0.74-0.75 with Q4 still to be added on. So you'd be looking at roughly £1 for 2024 & then possibly another £0.25 accumulating each quarter in 2025 until completion.

After that you'll be lucky to see any annual dividend from what left. They won't be able to pay out what little income comes into the investment fund, because they have so many fees to pay & they need a buffer for bear market situations.

No minority OCN shareholder is going to want HANSA shares especially the non-voting ones & Hansa shareholders are going to want a payout themselves from the sale, or they will just vote down any proposals from the 2 familys. So Hansa won't have the cash to buy up OCN unless its in a very convoluted way.

HANSA shareholders have been royally scr ewed over, for many years now. Think of it this way OCN pay's fees to Hanseatic for managing the fund, the fund then pays fees to all those other funds it holds as well ( so 2 lots of fees paid). HANSA then pays additional fees to Hanseatic for managing the HANSA trust ! so on 40%+ of the portfolio they are paying 3 lots of management fees a year! talk about having an albatross around your neck!

LOTM

[jane deer] 15/11/2024 11:01

LOTM.

Good point on the divs. Hopefully OCN shareholders will get a one last meaningful dividend (85-100 cents) in 2025. Once the remaining funds are invested in funds by OWIL, I would expect the OCN div to fall sharply.


I wonder what chance a merger between Hansa and OCN - they will both have the same function and largely the same investments after the Wilson Sons disposal. The only reason for keeping them separate is that the structure will maintain family control.

[c3479z1] 14/11/2024 22:41

LOTM

they've also got Polar Tech fund in the portfolio which has a pretty good record though has only more or less matched the tech index in the last few years?

[last of the mohicans] 14/11/2024 21:29

I think this sum's up what a disaster Hanseatic has been since the end of 2007


"Investment portfolio performance


Funds under management (including cash) at 31 December 2007 were $274.0million

(2006: $79.2million). The large increase from 2006 is principally due to the

US$183 million added to the investment portfolio during the year from the

proceeds of the sale of the Wilson Sons shares. The following table shows

portfolio performance compared to the portfolio benchmark and MSCI World Index.


Over the last 5 years the portfolio has returned 83.90% against 72.58% for the

MSCI index in the same period.


1 Year 3 Year 5 Year

Portfolio Performance 15.95% 46.38% 83.90%

Benchmark 7.33% 17.27% 21.20%

MSCI World Index 9.04% 38.60% 72.58%

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


As you can see they actually did ok from end of 2003 to end of 2006 ( $42.6M) under management increased to $79.2M.

Then everything went pear shaped - $274M at the end of 2007 has increased to just $327.9M at the end of September 2024. That's an increase of just under $54M in 17 years, that's an increase of roughly 20% or a little over 1% a year.



If you want to look at it yourself.

LOTM

[last of the mohicans] 13/11/2024 18:13

Hi jane deer,

You also need to factor in the dividends OCN will receive in 2025.

They'll be able to declare dividends for Q1 & Q2 & quite likely Q3 & possibly Q4 depending on how long the confirmation takes. So they will get over $11 per quarter coming in that way.

Once Wilson & Sons is sold there will be no constant source of dividends to pay shareholders a dividend from ! another downside to this ill-conceived fiasco.

If shareholders hadn't been stupid enough to believe the 2 family's that this was the best thing to do in 2007. Then for the last 17 years shareholders would have received close to double the dividends that they did receive over all that time period.


Not only that, the value of the 43% of Wilson & Sons that we no longer own is worth more (even after taxes) than the investment portfolio is worth in total now & that's excluding the value of the investment portfolio as it was back in 2007.

Total value destruction all round .....

And if they had simply invested the proceeds in the index they constantly quote but never followed it with the cash, well it wouldn't be $327.9M it would be north of $800M possibly even $1 Billion in value ( if you'd done any savvy exits & re-entries more than that).


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

They need to be selling every single holding (not Private Equity ones unless they've matured) that make up less than 0.8% of the portfolio. They are immaterial & even a really good performance by an individual one will make very little difference to the value of the investment portfolio.

Findlay Park American fund our biggest holding & the only decent one they've actually uncovered in 17 years, is valued at over $10B & only holds 59 shares in it. Our so called investment fund (of funds effectively) with just $327.9M in it has well over 80 different holdings. Which is simply crazy & sums up Hanseatic & the 2 familys in a nutshell.

The proceeds from those sales should be going to a share buy-back in the meantime. OCN should be buying up every share it can below £13. That will outperform any other investment decision there likely to make by miles.

LOTM

[jane deer] 13/11/2024 09:50

LOTM agree. To buy the stock now you have to expect:

1). The MSC Wilson Sons deal completes.
2). There is no material depreciation of the BRL ahead of closure.
3). The OCN board agree to distribute a good proportion of the proceeds to shareholders.
4). That whatever balance is left in a vehicle that is invested by OWIL is not trading at too huge a discount to NAV and can be sold - as I struggle to see who will want to be invested in such a vehicle.


My back of an envelope calculatiin shows that the current price of OCN basically is consistent with no problem on 1) or 2) and with around $300m being returned to shareholders (either as div or capital return) and with the rump company trading at a 50% discount to NAV.


Interested if anyone has different numbers or thinks that the outcome will be materially different on any of these 4 assumptions.

[last of the mohicans] 12/11/2024 20:05

Wow no-one else ahs said a word about the Q3 results!

Well to put them into context equity markets in multiple countries are at record high's yet the OCN Investment portfolio's valuation is at just $327.9M

Compared to is high of $350.5M a couple of years ago, an absolutely pathetic performance over the past 2 years+.

Well in actual fact lets be brutally honest its been a horrendous performance since 2007.

The 2 family's, there friends & relatives should be absolutely ashamed of themselves & the money that's been missed out on for everyone just to keep them in over paid cushy jobs for the last 15 years+ .

LOTM

[last of the mohicans] 08/11/2024 07:59

I was trying to find something else & in doing so came across something that might be of interest to some!

You remember the announcement of 29th October whereby William Salomon gifted shares to 2 members of his family.

I found it curious at the time as to why 1 was given a single share more than the other!

I've now discovered the reason - William Salomon must have held 224,285 shares in his own name & the rest in the name of Victualia Limited. So it was those in his own name that he gifted to the 2 individuals & of course you can't split an odd number of shares in half!

LOTM

[last of the mohicans] 08/11/2024 07:14

OMG no OCN 3rd quarter announcement !!!

They must be to embarrassed to put it out.

If you go to the site you'll be able to view the Wilson & Sons results for yourself.

LOTM