SLF Realisation Share Discussion Threads

[chucko1] 25/6/2021 16:43

But did SQN have much idea about any legal agreement they entered into? With anyone, ever?

[ctrader3] 25/6/2021 16:16

KKV Secured Loan Fund Limited

("KKVL" or the "Company")



Portfolio Manager Update

The Board of KKVL is aware that, KKV Investment Management Limited ("KKVIM"), the Company's portfolio manager, is in a dispute with SQN Capital Management, LLC ("SQN"), in relation to amounts payable by KKVIM to SQN pursuant to an agreement reached at the time KKVIM was appointed as the Company's portfolio manager in June 2020 (the "Dispute"). SQN has appointed a Fixed Charge Receiver to seek to collect amounts it claims are owned to it by KKVIM.



While the Dispute does not concern the Company directly, the Fixed Charge Receiver has contacted the Company requesting that payments that would otherwise be made by the Company to KKVIM pursuant to the investment management agreement, be instead paid to SQN. KKVIM is challenging the appointment of the Fixed Charge Receiver.



The Dispute does not impact the ongoing management of the portfolio or the realisation of the Company's assets, however, the Company will continue to monitor the situation and any impact it may have on KKVIM and the Company.


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and just when u thought they couldn't get any more dysfunctional, they
achieve the impossible.

[ctrader3] 14/6/2021 11:36

although not keen on the management the investment case for
anyone new to the share looks compelling due to the discount
to NAV's.
I haven't researched the X shares so cannot offer an
opinion on which share to buy.
Most of the gain will most probably be from return of
cash with only a modest uptick in the share price.
GL
DYOR etc., etc.,

[chucko1] 14/6/2021 11:32

MB, I think that sums it up perfectly.

14.4p of current NAV (so basically 50% of total NAV) of KKVL is AD exposure. Even getting NAV would therefore benefit the share price by 6p or so. Stability is all that is required at this late stage, not improvement.

[makinbuks] 14/6/2021 11:24

Yes its pretty clear that the business models behind the plants KKV has lent to are not working. Now that the plants are producing energy they need to be restructured and once that's agreed further investment is required to optomise the model. This is the classic problem of being an early mover when the market hasn't yet properly formed. I'm pretty confident these plants will all end up as viable businesses and generate power for the next quarter of a century. If we were able to take a medium term view we could get all our money back probably including swapping debt for equity but alas that ship has sailed

[chucko1] 14/6/2021 11:08

Everyone has! It's a comedy.

[ctrader3] 14/6/2021 10:28

tks but I've had more than enough of KKV management.

[chucko1] 14/6/2021 10:08

Why not take a look at KKVX? That has, I think, far more possibilities.

[ctrader3] 14/6/2021 09:35

yep, will do me and then I could say goodbye to the share. although
I reckon I will leave after they have sold their best assets.

[chucko1] 14/6/2021 09:18

But I am not convinced it is sufficiently timely to benefit the stricken KKVL portfolio. The best if it underpins KPMG valuations which leads to a 60% uplift in realised values. 60% is certainly worth having!

[ctrader3] 14/6/2021 06:44

Compelling market drivers in Biogas

The anaerobic digestion sector offers significant growth potential. At its full potential in the UK, 170 million tonnes of organic waste can be recycled through this process, providing 30% of the saving needed to meet the 5th carbon budget for 2030. This is equivalent to 27 million tonnes of CO2 saved.

Previously, there has been widespread deployment of renewable technology, but with a focus on investment, rather than the efficient deployment and operation of the technology. Particularly after 2015, with many investment firms raising capital funds through tax driven EIS schemes, significant capital was deployed into large-complicated Biogas and Synthetic gas projects which required full engineering teams and appropriate levels of operating experience.

These firms are now looking for experienced management teams and new capital to enable growth as the UK government continues to encourage a move to decarbonisation. With increasing pressure from the UK government and investors for more renewable sources of energy, there will be more demand for the Biogas sector.

For more details on the proposed deal, the Greenan plant acquisition, the Biogas sector and market drivers, please visit the following presentation at the Company's website at hxxp://www.sciroccoenergy.com

[jonathan49] 02/6/2021 18:31

I was invested in Alecentra Floating rate income fund which completed wind-up recently. I was pretty disappointed that they sold out of most of the loans as soon as the wind-up was decided which was when prices were still depressed due to covid. The managers argument was similar which is that they did not want to take the risk of prices of the assets falling further and didn't want to bet on future developments. The bigger issue here is that we have to hope that KKV will not use that argument when selling the non performing loans, ie that they hold on to get better than the revalued NAV. I am hoping that the bigger shareholders who KKV should be talking to are encouraging them to get best prices and not just revalued NAV. I have no problem waiting.

[chucko1] 02/6/2021 12:23

Of course you sell (effectively) at par when there is such a bid (unless there are compelling tactical reasons not to do so). Remember, the 10% coupon and principal is hardly without risk - that's why it's 10%!!

And to shareholders, the par value is being valued at 60%

[makinbuks] 02/6/2021 09:16

Yes, I guess thats the mentality

[ctrader3] 01/6/2021 17:56

yep, but if there is another black swan waiting
in the swamp.........

[makinbuks] 01/6/2021 16:43

I get that we are in a winding up, but I do question if going for an early exit on the good stuff when the problematic bits define the critical path for the project is in shareholders best interests. This could have carried on generating interest for us rather than Triple Point quite happily for longer and increased our overall return

[makinbuks] 01/6/2021 16:39

Here is the announcement from the refinancier

[ctrader3] 01/6/2021 15:35

if they can move borrowers 14 & 15 on, on similar terms, it
should equate to a cash return of around 5.5p per share.

[ctrader3] 01/6/2021 15:23

Borrower 17 - Electricity Generation



Stage 1 Credit Exposure £5.41m ECL £0.15m NCV £5.26m



This is the sister investment to Borrowers 14 and 15, which also has an Energy Services Agreement and a Power Purchase Agreement in place with a large UK tomato grower and large energy providers respectively. This farm-based CHP plant is performing well. Debt service is well covered.




Borrowers 14 & 15 - Electricity Generation



Stage 1 Credit Exposure £16.18m ECL £0.46m NCV £15.73m



The project comprises two Combined Heat and Power ('CHP') systems. Each generate electricity together with heat and CO2 to be consumed by the UK's largest tomato grower via two 20-year Energy Services Agreements. These energy centres are a critical part of the grower's business and the installed equipment has allowed the grower to significantly reduce costs and increase crop yields. Electricity not used on-site by the grower is exported to the grid via a Power Purchase Agreement with a large energy provider.



The two borrowers are separate SPVs and share the same sponsor. This loan was originally underwritten alongside the equity sponsor and all documentation is well structured with appropriate security. Both assets are performing and we are working with the Borrower on a potential refinance.

[rambutan2] 01/6/2021 15:12

Update on Assets

A further loan underwritten alongside an equity sponsor has now been refinanced with another provider. Spark Steam Ltd has been refinanced for a consideration payable to the Company of GBP5,111,113.60, being the total amount outstanding under the loan. As at 31 Dec 2020, Spark Steam Ltd had a carrying value of GBP5.09m and was marked as Borrower 17 in the December 2020 Half-Yearly Report and Accounts.

[ctrader3] 01/6/2021 07:50

Secured Income Fund plc



Review of Film Production Financing



Secured Income Fund plc (LSE: SSIF) (the "Company"), a specialist secured lending income investment trust, listed in the UK, announces that it is undertaking a review of its Film Production Financing portfolio, which had a book value for all six loans of £9,586,462 as of April 30, 2021.



The portfolio comprises six film financings and the Fund Manager, KKV, has established that the restrictions and changed operating practices resulting from the COVID pandemic are likely to have a significantly bigger detrimental impact on these assets than originally anticipated.



The review of the portfolio, is therefore expected to result in a substantial increase in provisioning against the book values of all six loans. KKV is working proactively with the borrower to ensure the best possible outcome for shareholders. A further announcement will be made once the review is concluded.


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the market hates uncertainty, a fact KKV seems to be unaware of ?

[rambutan2] 31/5/2021 04:14

Noted in CGT's recent finals. It was the 28/09/20 rns revealing that CGM had held a 5% stake since June, that pushed me over the edge and into buying a few. Peter Spiller and co have a good track record when they've been in these value extraction situations:

"As always we trod on a few banana skins, the most significant of which was KKV Secured Lending plc. During the height of the pandemic this direct loan fund traded down to huge discounts and we actively added to our position. It turned out that the discounts were illusory due to the exceptionally poor performance of the underlying portfolio. KKV Secured Lending plc is now in managed wind down and we have worked with other shareholders to replace the board of directors to ensure the asset recovery and return of capital is effectively overseen."

[ctrader3] 28/5/2021 14:36

tks, interesting.

[rambutan2] 28/5/2021 13:59

Worth a post I thought: