Rdl Realisation Share Discussion Threads

[spectoacc] 15/8/2019 08:53

255p XD, keep up Dave! ;)

[robizm] 09/8/2019 11:36

It is hard to work out the nav. Assets in dollars no harm though

[davebowler] 09/8/2019 11:04

7 August 2019

RDL Realisation PLC

(the "Company" or "RDL")

Portfolio Update

As previously announced by the Company and pursuant to the Company's ultimate objective of effecting a managed wind down of its portfolio with a view to realising all of its investments, the Board continues to work with the management teams of each of the platforms through which it has invested.

In connection with these efforts, the Company has entered into an agreement that has refinanced the entire balance of the loans, secured by vehicle service contracts ("VSC").

As of 6 August 2019, the effective date of the refinancing, the Company received a payoff of all of the outstanding obligations secured by VSCs, including principal, interest and reimbursable expenses totalling USD 27.9 million. With the repayment at par, the Company will recognise income, reversing the amount reserved on the loan in the 31 December 2018 financial statements.

The Company still has a USD 4.5 million enterprise value loan outstanding to a related entity of the VSC platform. This loan was due in May 2019; the Company continues to receive monthly interest. RDL is in active discussions with the management of the VSC platform to restructure the loan owed in a mutually agreed upon and timely manner.

The Company intends to announce a further special dividend following the refinancing of the loan. The amount and timing of the special dividend will be determined with regard to the obligations of the Company and the maintenance of sufficient reserves. The Company will also look to structure its dividend payments to maintain investment trust status for so long as it remains listed. Further announcements regarding dividend payments will be made in due course.

This announcement contains inside information.

For further information, please contact:


Link Company Matters Limited
Secretary

[rndm355] 21/6/2019 12:11

discussed in SCVR today:

[davebowler] 21/6/2019 10:31

Liberum;
Positive month for distributions in April

Mkt Cap £64m | Prem/(disc) -36.5% | Div yield n/a

Event

RDL Realisation's portfolio update for April highlights a $13m increase in the cash position in the month to $89m. The main reason for the increase was $10m of repayments from real estate loans. This included a $6m loan that was in default which was repaid at a slight premium to book value.

The majority of the company's cash balance (£55.7m) will be used to redeem the ZDP shares following the agreement on the redemption price.

The remaining portfolio was $104.8m at 30 April. A defaulted real estate loan with a book value of $2.8m is under contract to sell for $2.5m. The expected writedown after costs is $0.5m. In relation to the remaining Princeton position, Microbilt has put together an informal group of minority investors to support an alternative liquidation plan to the one proposed by the Chapter 11 Trustee. Microbilt's plan would leave the fund in bankruptcy for an indefinite period of time. RDL Realisation will support the plan put forward by the Trustee. Under the plan, RDL Realisation will be paid $2.5m in priority to other investors in the fund as a result of the arbitration findings. Aside from that, it would be treated in the same way as other investors.

Liberum view

April was a relatively positive month given the level of distributions which has been achieved broadly in line with book values. Over $30m of loans have redeemed in the four months to April and the company finally reached an agreement with ZDP holders. The board is aiming to have the majority of the run-off portfolio repaid by late-2019. Other residual positions involving bankruptcy proceedings (Princeton) are expected to take longer.

[epistrophy] 06/6/2019 21:40

Thanks Dave for the updates. Is there anything newer from Liberum by any chance?

[davebowler] 12/2/2019 10:07

Liberum;
Event

Based on information provided by the chapter 11 Trustee in the bankruptcy proceeding of Princeton Alternative Income Fund, Ranger has decided to write down the carrying value of its investment in Princeton by $13.5m to $15m.

Ranger has been actively engaged with the Trustee since its appointment in early November. The potential recovery value of $15m is based on a number of variables, including the final structure of the creditor and investor waterfall and distribution scheme. This will not be finalised for a number of months. Other factors that may impact the final amount include recoveries from the performing and payday loans in the portfolio as the current estimates are based on assumptions using historic sector benchmarks.

As previously announced, the investment management agreement with with the current investment manager terminates with effect from today. Joe Kenary has recently been appointed to the executive board in addition to Dominik Dolenec and Brett Miller. A third party valuer will be used to value the portfolio on a half-yearly basis. The board believes half-yearly valuations are more appropriate than monthly valuations given the ongoing realisation process. Net asset value will be reported for 30 June and 31 December in future.

Liberum view

Ranger had flagged the writedown in Princeton as far back as October. The company has stressed the uncertainty regarding the latest recovery estimate for Princeton and we believe there is potential for a further impairment in this investment. The remaining value of $15m is equivalent to 11% of pro-forma NAV. 73% of the original $56m investment in Princeton has now been written off.

Following the writedown, we estimate the cover ratio on the ZDP shares is 2.65x. This is below the minimum cover covenant of 2.75x which is tested on an incurrence basis (e.g. at the time of dividend distribution etc). As a result, the company cannot make any further distributions to ordinary shareholders (outside of what is required to maintain investment trust status) without being in breach of the ZDP covenants.

[davebowler] 14/1/2019 09:36

Liberum;
Event

Ranger Direct Lending has received full repayment of a $38m loan from an international MCA platform. The loan has been repaid at par.

Liberum view

We estimate the loan accounts for 26% of remaining NAV adjusted for the second special dividend. The large loan repayment at par is helpful but there is limited capacity to make further distributions to ordinary shareholders as we estimate the ZDP cover is currently 2.9x (2.75x covenant). We believe a c.$10m distribution would reduce asset cover to the minimum required level.

Asset cover is expected to decline as the company previously disclosed that it expects to take a further impairment against the Princeton position. The investment in Princeton is valued at $28.5m (c.19% of NAV adjusted for the special dividend). There are also concerns over the company's loans to the SME lending platform that finances vehicle service contracts (32% of NAV).

[mmc71] 03/1/2019 08:21

I agree Plasybryn. Not going to multibag or make a killing here, but a virtually guaranteed double digit growth over next 12-18 months is good enough for me in these markets. Currently one of my largest long positions.

[plasybryn] 27/12/2018 15:35

Special dividend of £1.45 - goes Ex dividend on 3rd.
NAV still around £9 I believe with a S.P. of £6.60
Looks sensible.Anyone care to comment?

[davebowler] 21/12/2018 10:51

Liberum.% NAV reduction from impairments Mkt Cap £104m | Prem/(disc) -26.1% | Div yield n/aEventRanger Direct Lending will increase impairments by $5.8m. This is comprised of a $4.8m impairment against the value of the loans originated by the Canadian SME lending platform and a $1.0m impairment on the SME/CRE loan portfolio. Liberum viewThe Canadian SME lending platform provides loans to business with government grants. The president of the platform left in early 2018. A review revealed that the loans had not been adequately serviced and Ranger subsequently took over the servicing of the loans.At 31 October, Ranger's remaining exposure to the Canadian SME portfolio was valued at $12.4m (6.7% of NAV). The company reported in the October factsheet that 10% of the remaining exposure to this portfolio is made up of non-performing loans and 30% is being restructured. The $4.8m impairment reduces the company's exposure to 4.3% of NAV. The total impairments of $5.8m will reduce NAV by 3.1%. We would also expect a writedown in the near-term on the Princeton investment (16% of NAV) and there are also concerns over the company's loans to the SME lending platform that finances vehicle service contracts (27% of NAV). 

[davebowler] 18/12/2018 10:12

Liberum
Concerns over exposure to SME lending platform

Mkt Cap £106m | Prem/(disc) -27.5% | Div yield n/a

Event

Ranger Direct Lending's NAV return in October was -0.26%. This was mainly due to a loss reserve of -0.67% in the month (-0.54% related to the Canadian SME platform). Princeton legal expenses also reduced NAV by -0.1%.

Ranger has provided an update on the remaining assets in the portfolio:

SME/CRE lending platform (29% of NAV) - Discussions have begun to enable the platform to sell Ranger's loans to other investors.
SME lending platform (26% of NAV) - The funding notes are secured by vehicle service contracts. Ranger has stopped making new investments in the platform. The company has breached its LTV requirement due to the reduced volume of new loans and losses in related entities. Mandatory prepayments have also not been made. The platform has found a new funding source and has offered a revised repayment schedule and security package. Ranger is also in discussions with a potential acquirer of its funding notes. The outstanding balance of $47.8m includes a $4.5m loan to the platform to finance an acquisition.
Real estate platform (23% of NAV) - Ranger's exposure to this platform has reduced by $11m in the month mainly due to the sale of loans to other investors. A further loan sold for $1.8m in November in addition to $0.9m of repayments.
International SME platform (21% of NAV) - Ranger's credit facility is expected to be refinanced in the near-term. The company is in the final stages of negotiating a facility with a new lender.
Canadian SME lending platform (7% of NAV) - Loss reserves increased by c.$1.3m in the month. 10% of the remaining portfolio is made up of non-performing loans and 30% is being restructured.
Princeton (15% of NAV) - The US trustee has appointed Matthew Cantor as chapter 11 Trustee. He previously served as Chief Counsel for Lehman Brothers Holdings. He displaced the Princeton management on appointment and has assumed control over Princeton and its assets. The Trustee is assessing the assets and formulating a plan of liquidation.
Liberum view

The key development in the month is that the SME lender that finances vehicle service contracts is showing signs of stress. The overall exposure to the platform is equivalent to 26% of NAV. $4.5m (2.4% of NAV) relates to a loan to the TopCo and is secured on share pledges over the operating entities of the platform, which appear to be experiencing difficulties. Ranger is exposed to counterparty risk due to the nature of these funding notes. Any early cancellations of these contracts by consumers means that the lender has to recover the remaining proceeds from the operating entity or insurer.

On a positive note, a significant portion of the real estate debt exposure has reduced in the month. The international SME lender (21% of NAV) is also close to agreeing a loan refinancing.

The shares currently trade on a -27.5% discount to NAV but that is before any further writedown is taken on Princeton. The company previously flagged that a significant writedown is forthcoming. Assuming a full writedown of Princeton, the pro-forma discount would be -14.2%. We expect the writedown will be implemented relatively soon given the appointment of the chapter 11 trustee.

[davebowler] 13/11/2018 10:58

Liberum;

Progressing asset sales

Mkt Cap £117m | Prem/(disc) -17.0% | Div yield n/a

Event

Ranger Direct Lending's NAV return in September was 0.15%. The portfolio produced a gross return of 0.63% before accounting for a loss reserve of 0.48%. Princeton legal expenses reduced returns by -10bps and a consumer loan portfolio was marked down to reflect the price achieved for the sale of the portfolio in October (-33bps impact on NAV).

The major recent newsflow from the company was the sale of a consumer portfolio in October for $18.2m (3.5% discount to par). The portfolio comprised performing loans and the company separately sold off a portfolio of charged off loans for $0.2m. The portfolio sale enabled Ranger to pay a special dividend of 85p per share in November.

Ranger has also provided an update on the remaining assets in the portfolio:

SME/CRE lending platform (30% of NAV) - Bids for the assets were below the reserve price. Ranger will continue to hold the loans and allow them to run off. Potential for future sale of loans.
Real estate platform (29% of NAV) - Performing loans will be offered for sale at par to the platform's existing and potential investors.
SME lending platform (26% of NAV) - The funding notes are secured by vehicle service contracts and several potential buyers are performing due diligence. Ranger is the platform's sole capital provider.
International SME platform (21% of NAV) - Ranger's credit facility is expected to be refinanced at par within 4-8 weeks.
Canadian SME lending platform (8% of NAV) - Ranger has taken over servicing of the portfolio and is restructuring payment obligations of a material proportion of the borrowers. The company currently expects that collection action will be necessary against 9.6% of the underlying borrowers.
Princeton (15% of NAV) - As previously disclosed, a chapter 11 Trustee will be appointed in the bankruptcy cases of Princeton. The appointed trustee will replace the current management of Princeton and assume control over the assets. The investment in Princeton is currently held at $28.5m in Ranger's accounts and an impairment is forthcoming.
A general meeting will be held on 16 November to approve proposals to formally amend the investment objective and investment policy of the company to reflect a realisation strategy.

Liberum view

The September monthly report provides a useful update on the company's progress in realising assets and returning capital to shareholders. There is potential for a number of large distributions from the portfolio in the near-term (refinancing of international SME platform credit facility and sale of SME platform funding notes). The outstanding issue of the ZDP repayment still needs to be resolved. To date, Ranger has acquired 12.5% of the ZDPs.

Our estimate of the pro-forma NAV is shown below following the consumer portfolio sale, ZDP buyback and special dividend. Our pro-forma estimate does not include any adjustment to Princeton, which we expect to be written down heavily. The existing carrying value represents 15.5% of our pro-forma NAV. One of the more recent filings in the bankruptcy case is a monthly operating report for July that was filed by Princeton. It includes bank statements showing cash of $7.9m at 31 July 2018. The statements also appear to show that Princeton has continued to fund credit lines in the months prior to 31 July but there is no detail on any credit lines in the report.


Est NAV 891.9p

[davebowler] 07/11/2018 13:27

Liberum;
Event

The US Bankruptcy Court for the District of New Jersey yesterday entered a ruling granting Ranger's motion for the appointment of a chapter 11 Trustee in the bankruptcy cases of Princeton. Ranger will be able to suggest candidates for the chapter 11 trustee but the final decision will be made by the Office of the United States Trustee. The appointed trustee will replace the current management of Princeton and assume control over the assets. The appointment is expected to be made within "several days". In the meantime, Ranger will request that the court enter an order requiring Princeton to maintain the status quo and to prevent further investments being made.

The court found that the existence of irreconcilable conflicts of interest between the Princeton fund and its insider management and the existence of an outstanding claim filed in the cases by the Securities and Exchange Commission required an independent trustee to be appointed.

Liberum view

The appointment of an independent trustee is a positive development as Ranger should, at the very least, have better visibility on the remaining cash and assets within Princeton. It should also help to prevent any unnecessary cost or fee leakage from Princeton. One of the more recent filings in the bankruptcy case is a monthly operating report for July that was filed by Princeton. It includes bank statements showing cash of $7.9m at 31 July 2018. The statements also appear to show that Princeton has continued to fund credit lines in the months prior to 31 July but there is no detail on any credit lines in the report.

The investment in Princeton is currently held at $28.5m (c16% of NAV) in Ranger's accounts and the board recently indicated an impairment was forthcoming. The company should now be able to access the required information to form a reasonable opinion of the remaining value of the investment. The shares trade on a -17.2% discount to NAV (-2% discount excluding Princeton assets).

[dodgyknees] 01/11/2018 09:25

Ex dividend by 85p today. Return of capital as income.

[davebowler] 30/10/2018 12:22

Liberum;

Proposed amendment to investment policy and director fees

Event

Ranger Direct Lending published a circular yesterday regarding a number of proposals including a change in the company's investment policy and an amendment to directors' fees:

The investment objective and investment policy of the company will be formally modified to reflect a realisation strategy and the company will cease making any further new investments. A delisting will be considered once a significant proportion of the assets have been realised and returned to shareholders. If the managed wind-down process progresses as expected, a delisting could be proposed in early 2019.
The board has approved an increase in annual directors' fees to £50,000 pa (subject to shareholder approval). This is due to the increased level of engagement in managing the wind-down process. A new incentive bonus scheme for the directros has also been proposed based on returns delivered to shareholders (no bonus if IRR<5%, £0.25m bonus pool if IRR is 5-10%, £0.5m if IRR is 10-15%, £0.75m if IRR>15%). The IRR calculation is based on a starting share price of 800p (share price at AGM on 19 June).
In terms of returning capital, the board expects to continue returning capital by way of dividends. The company will return capital by way of ad-hoc special dividends when cash is available, as opposed to quarterly dividend payments.

[spectoacc] 25/9/2018 07:41

"Outlook

The Board plans to commence capital returns in the coming months. These will be generated on the back of orderly asset disposals and re-financings are currently being negotiated. We are encouraged by the progress of our discussions with interested parties. The positive credit market backdrop further aids our efforts and adds to our resolve to exit the majority of the Company's portfolio before year end."

The rest is well worth reading too - not nearly so positive! Haven't even been able to wade through the Princeton fiasco.

[davebowler] 23/8/2018 09:54

Liberum;
Ranger Direct Lending (Mkt Cap £125m)

Negative month following increased loss reserves

Event

Ranger Direct Lending's NAV at 30 June 2018 was $12.88 per share, representing a total return of -0.14% in the month. Gross income returns prior to any loss reserves was 0.70%. This was offset by a monthly loss reserve of -0.41%, Princeton net losses of -0.37% and Princeton legal expenses of -0.07%.

The monthly loss reserve of -0.41% was relatively high as a result of $0.4m (0.19% of NAV) of writedowns related to real estate loans and a $0.1m writedown related to an international loan from the international SME lending platform.

In total, $14.8m of real estate loans are in default/impairment status ($22.4m at December 2017). $8.2m relates to two properties which are in contract status. The $0.4m impairment in June relates to these loans due to lower projected recovery prices. Foreclosure proceedings have completed for two properties with carrying values of $5.1m. The assets are expected to be sold in Q4 2019 and a $0.3m writedown (0.14% of NAV) will be taken against one of these assets in July. One remaining asset with a $1.5m carrying value is in foreclosure and is expected to be sold in late 2019.

Princeton reported a net loss in June which reduced NAV by -0.37%. It has not provided any information as to what caused the loss. The company is uncertain whether it was a cash item from legal expenses or an additional impairment.

The company recently provided an update on Princeton. On phase one of the arbitration, gross damages of $61.8m were awarded to Ranger Direct Lending and the US domestic fund which is managed by the investment manager. This represents the total amount invested by both funds. This has been adjusted to net damages of $30.7m, plus pre-judgement interest accruing from 30 November 2016. The adjustment reflects the amount previously received as a return of principal and the amount the panel attributed to the Argon sidepocket ($22m). The Bankruptcy Court had previously limited its grant of relief from the automatic bankruptcy stay to the entry of a final award by the arbitration panel. Ranger cannot seek confirmation or enforcement of the award without further relief from the bankruptcy court.

Liberum view

NAV total return in US Dollars in H1 2018 was 0.7% (3.0% in Sterling due to FX gains). Performance has been impacted by Princeton legal expenses and increased loss reserves in non-Princeton assets over the period. Given the ongoing issues in the portfolio, we believe it is unlikely there will be meaningful income returns in the wind-down period for the portfolio.

The recent award of damages in the Princeton arbitration is a positive development but it remains unclear what remaining assets Princeton has and how much can ultimately be recovered by the manager.

The key question following the strategy change and the appointment of the new board will be how quickly can funds be returned to investors. Oaktree stated in its open letters that it expected the majority of the portfolio could be realised within 18 months given the short duration. In the last quarterly portfolio update, 88% of the portfolio's payment status was classified as current (14 month average remaining term). The average remaining term of the various loan investments ranges from 4 months to 36 months.

The shares currently trade on a -22.7% discount to NAV (-10.1% discount assuming full writedown of Princeton position).

[spectoacc] 06/8/2018 09:47

Missed that RNS on Friday. Not sure what it's saying really - RDL has spent a lot of time and money pursuing Princeton, now notionally has money awarded to it, but can't enforce the reward without "...Further relief from the bankruptcy court" and isn't clear if there's any money to pay the award anyway?

No longer hold the shares but still in ZDPs.

[davebowler] 06/8/2018 09:42

Liberum;
Princeton update

Event

Ranger Direct Lending has provided an update on its investment in the Princeton Alternative Income Fund.

The arbitration panel has rendered a 'Partial Final Award' on phase one of the arbitration. Princeton breached the investment documents for a number of reasons including suspending the company's redemption rights when it was not permitted to do so. However, the panel found insufficient evidence to find Princeton liable on Ranger's claim of fraud and violation of 10b-5.

Gross damages of $61.8m were awarded to Ranger Direct Lending and the US domestic fund which is managed by the investment manager. This represents the total amount invested by both funds.This has been adjusted to net damages of $30.7m, plus pre-judgement interest accruing from 30 November 2016. The adjustment reflects the amount previously received as a return of principal and the amount the panel attributed to the Argon sidepocket ($22m). Ranger Direct Lending and the US domestic fund are entitled to 99% of the distributions from the Argon sidepocket.

The Bankruptcy Court had previously limited its grant of relief from the automatic bankruptcy stay to the entry of a final award by the arbitration panel. Ranger cannot seek confirmation or enforcement of the award without further relief from the bankruptcy court.

The company is considering whether to seek relief from the automatic bankruptcy stay to pursue phase two of the arbitration, which seeks damages against certain individuals and entities other than Princeton.

Liberum view

The award of damages is a positive development but it remains unclear how much remaining assets Princeton has in the portfolio to fund the judgement. In our view, the market has largely written the Princeton investment off and any meaningful return of capital would represent a favourable outcome. The shares trade on a -18.5% discount to NAV (-5.2% discount assuming full writedown of Princeton investment).

[spectoacc] 20/6/2018 07:19

"IDM: RDL

Oaktree Capital Management, L.P. ("Oaktree") welcomes the result of voting at the Ranger Direct Lending Fund PLC (LON: RDL) ("Ranger" or "RDLF") Annual General Meeting.


Oaktree and the new Directors Dominik Dolenec and Greg Share are grateful for the overwhelming shareholder support and look forward to working constructively with the Board to maximize returns at RDLF.


"Oaktree is confident that the refreshed Board will have the requisite experience to oversee RDLF and ensure a smooth and successful wind-down of the Company for the benefit of stakeholders," said Patrick M. McCaney, Managing Director and Portfolio Manager of Oaktree's Value Equities strategy. "On behalf of all shareholders, Oaktree would like to thank outgoing Ranger Chairman Christopher Waldron and Board members Matthew Mulford and Scott Canon for their contributions."
"

[spectoacc] 19/6/2018 06:50

Let's hope they know what they're doing :)