Sequoia Economic Infrast... Share Discussion Threads

[williamcooper104] 24/11/2021 21:44

Bulb has the feel of a Carillion The topco is in the creditor potentially very unfriendly Special Admin The main holdco is where the SEQI debt sits, is in regular admin, but the Admin won't have sufficient funds to run the company (and pay their fees) so the £1.7bn could end up going in as senior rescue/DIP financing That's almost certainly a simplification of a very complex situation; but as said, SEQI really ought to clarify

[williamcooper104] 24/11/2021 21:31

https://www.standard.co.uk/news/uk/bulb-governmnet-bail-out-adminstration-failed-energy-supplier-kwasi-kwarteng-treasury-b968123.htmlGovernment putting in £1.6bn loan "The £1.69 billion loan will be set aside by Government to support the administrator's work, and ensure that lights stay on for Bulb's 1.6 million customers." That could sound a little like an expense of administration (which come out at the top of any recovery) SEQI really ought to clarify where their loan sits in relation to the government fundingSounds like a £30m plus admin fee

[cocopah] 24/11/2021 10:13

Interesting to see what the next few days reaction to the half-yearly review will be. Valuation wise not too bad, EPS not very good and the BULB issue is an ugly overhang. I still think the downturn will be temporary and I’m not a chartist but US Stock Invest claims a 90% conference level of a three-month bottom between 98p and 102p. I will be surprised if the share price hits the lower level, although I wouldn’t be surprised if it hit 1.03ish and I will definitely be back in at that level. LTHs will no doubt be unfazed with a divi that is well in excess of returns that can be gained elsewhere for similar levels of risk. I think the board will be more circumspect in their investments in the energy sector in future too. All IMHO.

[chucko1] 22/11/2021 15:04

It’s not easy to see a haircut on senior secured exceeding 30% in any circumstance. Even a 2p drop on the news was excessive especially considering this was hardly a surprise.

[speedsgh] 22/11/2021 14:22

Portfolio Update -

On 22nd November 2021, SEQI learnt via a press article that Bulb Energy Ltd ("Bulb") is supportive of entering into the Special Administration Regime ("SAR") established by the Energy Act 2011. If this were to occur, the Investment Adviser notes that the parent company of Bulb, Simple Energy Limited ("Simple"), would enter into normal administration.

SEQI would like to note that its Investment Adviser remains actively engaged with all the relevant Bulb stakeholders. As previously noted, SEQI's loan to Bulb is GBP55.0 million (approximately 2.9% of NAV as at 31 October 2021) and is guaranteed by Simple.

The primary objective of SAR is for the administrator to ensure continuity of energy supply to consumers. In this regard, the Investment Adviser has been working openly and constructively with all stakeholders including Ofgem to ensure the best interests of customers and employees.

The loan is senior ranking debt, secured on all the assets of Bulb and Simple. As of today, the value of Bulb's and Simple's assets are in excess of the amount of the loan. However, one consequence of Special Administration is that, whilst it is continuing, secured lenders to Bulb are unable to enforce their security. The substantial assets of Simple are outside the Special Administration process and are also collateral for the Company's loan.

The Investment Adviser supported by the Company's Board of Directors will continue to work with stakeholders to ensure a fair outcome for all parties including our shareholders that include retail investors, funds managing individuals' savings and pensions and other investors.

Further information will be provided in due course.

[williamcooper104] 22/11/2021 12:32

Looks like government are putting in rescue funding; which will be senior to SEQI - "Under the SAR, the administrator has a legal duty to consider the interest of customers, unlike a conventional insolvency process where the primary duty is to creditors."

[williamcooper104] 22/11/2021 12:18

https://news.sky.com/story/bulb-on-brink-of-collapse-amid-government-talks-with-creditor-12475565Here's the link to the full sky story

[speedsgh] 22/11/2021 12:08

Exclusive: Bulb, Britain's seventh-biggest energy supplier, is close to collapse, a move that will lead to 1.7m UK households being forced to change energy supplier. The government is in talks with Bulb's secured creditor about the fate of its £50m loan to Bulb. Full story soon.

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

From NAV and Investment Update on 14 Oct...



... Given the recent media commentary around the UK energy market, SEQI has been in active dialogue with Bulb Energy Limited ("Bulb"). The drawn portion of SEQI's loan to Bulb is GBP55.0 million (approximately 2.9% of NAV). The loan is structured as senior ranking debt, secured on all the assets of Bulb, and accounts for all the senior ranking debt of Bulb. In the opinion of the Investment Adviser, the value of these assets exceeds the drawn loan amount. SEQI continues to actively engage with Bulb Energy Limited on an ongoing basis.

[williamcooper104] 12/11/2021 23:34

2.5 years duration On the positive front SEQIs balance sheet is strong so a few credit losses won't lead to catastrophic losses Though 50 percent mezz/hold co loans (hold co usually means structurally subordinated) Those loans are effectively leveraged in that the ratio of senior to junior gives you a leveraged loss (so basically one way negative leverage)

[williamcooper104] 12/11/2021 23:16

Bulbs got £600m of liabilities but only £50m of SEQI senior secured debt You'd like to think that that £50m would rank ahead of trade creditors but given that those creditors are mainly consumers and the special admin regime who knows how the debt stack will work??? You need to take great care under English law that you've actually secured debt agains fixed assets - calling it secured doesn't mean it's secured

[williamcooper104] 12/11/2021 23:11

Yep I liked having SEQI too; just concerned that a discount at the currently time is more in order than a premium At least it's big and liquid so super easy to trade in and out of

[williamcooper104] 12/11/2021 23:08

Interest rate rises (so long as they don't lead to credit issues with borrowers) shouldn't be too much of a problem, SEQIs loan duration is pretty low (which isnt what you'd expect for infra loans highlighting how what we've really got is mainly a high yield loan book with an infra flavour)

[cocopah] 12/11/2021 17:33

Yeah, I got out at 1.09 (my average was 1.08) just to try and get my price paid down before interest rates start rising next year. I didn’t really sell to make any profit (obviously) and I’ll be back in if it hits 1.02 to 1.04 again. I like having SEQI in my portfolio, so fingers crossed. Of the three investments in trouble, Bulb seems to be the real issue. I was surprised that the potash one went belly-up though. I was expecting a lower NAV on this update, so for those currently investing that’s great news. GLA

[williamcooper104] 12/11/2021 12:46

So sounds like the Aussie mining development loan is money good (I note my almost complete lack of experience in both mining and Australia) The Bulb loan, appreciate they are the only senior creditor, looks more concerning If it goes into administration it will be the first company to go into a new special form of admin set up to prioritise customers - which doesn't exactly sound good for a par or possibly any recovery I'm out and watching at moment - a bad loan loss and the premium is likely to go to a discount as well as the NAV credit losses

[williamcooper104] 30/10/2021 00:32

More on Bulb https://www.google.co.uk/amp/s/news.sky.com/story/amp/government-accelerates-planning-for-collapse-of-big-energy-supplier-bulb-12453948Seems that it could go into a special government led administration (which has never been done before) - but the administrator will owe a duty to Bulbs customers as opposed to a primary duty to Bulbs assets So looks like it would mean selling of Bulbs customers quickly

[williamcooper104] 29/10/2021 15:10

Bulb = £55m/3 percent of NAV SEQI seems to have a senior position and has said that it's comfortable that it's loan is money good Still means at least 5 percent of NAV in administration

[williamcooper104] 29/10/2021 15:07

Telegraph reporting that Bulb is likely to go into administration

[starpukka] 28/10/2021 12:53

My spreadbet a/c pays out divs after closing on the day before XD day. I recalled SEQI actually rose on last XD day; so I opened long SB yesterday. Sure enough it's risen again today; allowing me to close for a profit.
I wish more did this.

[gateside] 28/10/2021 12:48

Ex dividend and the share price is up!

[cwa1] 28/10/2021 07:09

As mentioned, XD this morning, pay day 3/12

[cwa1] 27/10/2021 15:11

Can't really see what it is myself. Tipped somewhere? Broker rec? It does go XD this Thursday but wouldn't have thought that would be much to do with it...

[chucko1] 27/10/2021 14:45

Cannot think what was said in the budget would have helped. Also, it did most of its moving prior to that.

[nicd] 27/10/2021 14:41

Budget news perhaps?

[williamcooper104] 27/10/2021 11:08

Any idea why the share price move up today