Sequoia Economic Infrast... Share Discussion Threads

[ramellous] 15/11/2022 14:08

At first glance it looks like Sequoia investment management is an independent entity.

[scburbs] 15/11/2022 13:41

I saw that, couldn't immediately see any connection other than the name. Is there a link there or are they entirely different groups?

[ramellous] 15/11/2022 13:29

A bit like Sequoia being involved in the FTX crypto debacle. Not much due diligence going on.

[williamcooper104] 15/11/2022 13:09

Bulb got into problems because it didn't hedge Gov took over and then lost another couple of billion - because they too thought they knew better and also didn't hedge SAR didn't do SEQI over; as was pretty obvious that that was the intent of SARS - so fault lays with SEQI for putting themselves in a position to be done over

[scburbs] 15/11/2022 10:02

Let's not pretend that SEQI have been done over by the government! That paints a picture very far from reality when the government have lost billions.

Absent government intervention Bulb would have gone bankrupt and there would have been no value to the senior loan (at Bulb level) as Bulb was heavily loss making due to energy price movements and no one would have paid to take over that business (which is why the government had to step in).

The reality is probably that SEQI have done better from the SAR than they would from a free market because the government have continued funding payments to Simple Energy for brand/employees etc.

[apollocreed1] 15/11/2022 00:46

@williamcooper104 - Thanks

[apollocreed1] 14/11/2022 15:22

Why can't that overturning of seniority be challenged in court? It's just a form of theft by government.

[williamcooper104] 14/11/2022 08:46

As I thought might happen; the SAR would overturn normal creditor seniority ranking Fortunately while this was a stupid loan, suggesting a lack of sufficient legal dd; it appears not to be indicative of overall portfolio

[speedsgh] 14/11/2022 08:14

NAV and Investment Update -

The NAV for SEQI, the specialist investor in economic infrastructure debt, increased to 92.14 pence per share from the prior month's NAV of 92.08, (being the 30 September 2022 cum-income NAV of 93.64 less the dividend of 1.5625 pence per share declared in respect of the quarter ended September 2022), representing an increase of 0.06 pence per share...

... Bulb Energy: on 28 October 2022 the administrators of Bulb Energy Limited (Bulb) entered into a sale transaction that will move Bulb's customers to Octopus Energy. As has previously been disclosed to investors, Bulb is in a special administration regime (SAR), during which the Company has been prevented from enforcing its senior security over the assets of Bulb. Moreover, during the SAR, Bulb has remained loss-making and has needed Government funding to continue to provide electricity and gas to its customers. Administrators' expectation is that the overall financial effect of the sale will result in significant funds being paid to the purchaser for taking on (presently) loss making customers, and that to the extent that there are any proceeds from the sale of Bulb's customers, these will be used to repay in part the funding that the Government has provided to Bulb and (subject to potential legal challenges) not to repay the Company's senior debt.

Following the sale, Octopus is expected to continue to use the Bulb brand name and IT systems, both of which are owned by Simple Energy, for an interim period. Simple Energy is the parent of Bulb and is a guarantor of the Company's loan. The fees payable in the future by Octopus for the brand name and IT systems, together with Simple's other assets, will provide a further recovery for the Company on its loan to Bulb. To date, the Company has received £14.0 million from Simple Energy. The mark on the Bulb loan has fallen slightly this month, driven by minor changes to the assumptions made with regards to the timing of future recoveries.

[SEQI's loan to Bulb was £55m]

[scburbs] 01/11/2022 14:30

The NAV carrying value should already have assumed no material recovery from the sale of Bulb (as all the proceeds were expected to go towards reducing government losses). They have already communicated this. They might have got some recovery given the parent company has brand assets, employees, nuisance value etc.

"During the SAR, the Fund is unable to enforce its senior security over the assets of Bulb. Moreover, any funding that the Government provides to Bulb, to support its ongoing operations during the SAR or to pursue other Government policy objectives, may rank senior to the Fund's secured loan. As such, the Government has, in effect, nationalised Bulb and deprived the Company of the value of its security.

However, the Company's loan to Bulb is also secured on the substantial assets of its parent, Simple. These assets are not included in the scope of the SAR and therefore continue to provide collateral for our loan to Bulb. The administrators of Simple continue to make progress on realising the value of its assets.

[cocopah] 01/11/2022 09:29

Yes pretty poor from the company not to do a mid-month update, if nothing else other than to stabilise the share price. Unfortunately investors are usually bottom of the pile when it comes to thinking and communicating! 🤷‍a94;️

[catch007] 31/10/2022 15:55

Be good to learn the final agreed seqi impairment impact on Nav now that this deal has completed.

[zeppo] 30/10/2022 18:42

Sequoia Economic Infrastructure Income Fund Limited have declared that an interim dividend of 1.5625 pence per share will be payable to holders of Ordinary Shares as follows in respect of the three-month period ended 30 September 2022:

Ex-Dividend Date of 27 October 2022,

Record Date of 28 October 2022

Payment Date of 25 November 2022.

[cocopah] 30/10/2022 07:08

I wonder if that was the specific reason for the sell-off on Friday (relative to peers). As far as I knew any losses were baked into the share price but we will see. 🤷‍a94;️

[williamcooper104] 29/10/2022 12:48

Octopus Bulb accusation closed Looks like it's £100m payment and a future profit share - big hit for the tax payer Can't see anything on SEQI loan

[scburbs] 29/10/2022 12:13

Possibly some limited amounts for SEQI from the transitionary period as I think the parent company owns the Bulb brand.

[rik shaw] 29/10/2022 12:02

Now confirmed that Octopus will take over bulb.

[catch007] 23/10/2022 13:44

I note OVO Energy have entered the fray to buy Bulb at the eleventh hour.

[williamcooper104] 14/10/2022 09:01

Yep; so so far not looking too bad

[cocopah] 14/10/2022 08:28

#Williamcooper104 … so the investment & NAV update confirms £14m of the £50m Bulb loan repaid, no indication of any write-off. Income materially better now and dividend cover will increase (perhaps the divi will too?). NAV bound to be lower and subdued (for reasons given) but will recover over time. No more news on impaired loans so far.

[williamcooper104] 12/10/2022 01:00

Yep and when I read that I thought there was a good chance we were senior Albeit also possible that it was a total mess and SEQI had litigation/frustration value and the 48/52 was an agreed compromise

[cocopah] 11/10/2022 21:51

#Williamcooper104 … okay, after some further research, I happened upon an article where SEQI said that they were confident of receiving a (conservative) minimum of 52% of the loan from Simple and had already adjusted the NAV for the other 48%. Anyway no doubt we will be informed in a few days either via an RNS or via the monthly factsheet.🤷‍♂️;🤞🏻🤞🏻

[williamcooper104] 11/10/2022 21:24

It's complicated because there's a special insolvency regime for Bulb - that prioritises interests customers (essentially trade creditors) Last I looked from a conventional analysis SEQI was first ranking; but no clue how the special admin regime effected that

[cocopah] 11/10/2022 17:02

#scburbs I thought that the senior ranking debt was secured not just against the assets of Bulb but also its parent company Simple and that the SEQI BOD were confident that the latter had substantial assets which could be relied upon for total recovery. Have I got this wrong? Either way I guess we’re going find out very soon.🤔