SLF Realisation Share Discussion Threads

[spectoacc] 24/2/2022 14:46

Well there's a turn-up. Did we prod them?

10p coming back to us C's.

[gregatimb] 23/2/2022 16:09

i emailed them as well. no indication of timing in their response. "in due course"

[spectoacc] 20/2/2022 16:49

Emailed them, and let's just say their definition of "..The near future.." doesn't accord with mine.

[gregatimb] 16/2/2022 16:11

Yes, definitely feeling like a mushroom on this.

[spectoacc] 16/2/2022 16:05

Agree we're overdue another capital return, and I'd forgotten that line at the end of the 6th October RNS:

"The Directors intend to convene a board meeting in the near future to consider a further return of capital."


Not sure what constitutes "..The near future..", but since then we've had two sets of RNS on incentive fee arrangements, and the news on Dawn Kendall not returning, but can't recall anything that would have prevented them concluding a capital return by now.

[a0002577] 16/2/2022 13:40

The full name of this 'security is now : " Slf Realisation Fund Limited"

which of course tells it own story that it is about realizing the assets and returning cash to some rather woefully treated shareholders.

Despite a promise made last October that the board would meet soon to discuss the next tranche to be paid out - the board has done very little to meet this.

worrying : what is happening?

[spectoacc] 09/2/2022 06:57

It's the triumph of hope over experience to assume there's any value in the AD assets - they managed to sell a single one, a good while ago.

[wilwak] 08/2/2022 23:20

My thoughts are the AD assets are potentially worth a lot more than their WDV.

With the new incentive scheme in place for the manager there’s an aligned objective of maximising the return on these assets.

I suspect they could sell them off pretty easily to another fund as a job lot at WDV but are trying to do a lot better.

I’m still hoping the overall NAV of about 20p really is a worst case return from here.

[spectoacc] 26/1/2022 08:22

Quite a while ago, I thought "If they've not been able to shift the rest of the AD's by now, will they ever be able to". Passage of time has increased that feeling.

Then again, anything other than wipeout would be a positive.

On the C's - had hoped for another payout by now, hopefully coming before too long.

[cousinit] 17/1/2022 18:28

Just wondering on the AD assets whether the current energy price environment is helpful or not? I've not been involved from the start here so don't know if the deal structure and tariff regime was ever disclosed in detail.

The Nottinghamshire plant exposure that was sold seemed to be a subordinated debt position placed below senior debt and above (insufficient) equity below.

If the plants are generally now more productive and have some exposure to spot electricity prices then subordinated cash flows could be looking somewhat healthier than previously. Appreciate that there are a number of "ifs" in that sentence!

[wilwak] 06/1/2022 18:04

I’ve nibbled at a few more Ords today.

Can’t help thinking that there’s potential for a big return on the AD assets. They’re written down so hard to give the 20p current overall NAV.

Anybody's guess really but with the shares at 12pm there’s got to be huge scope for a good gain.

Hoping for a nice announcement at some point!

[chucko1] 24/12/2021 13:48

chucko1 - 17 Nov 2021 - 10:43:01 - 683 of 723 KKVL with Charts and News - KKVL
It is clear that there have been decent amortisation on the loans within the Cs portfolio. This has the effect of increasing the capital repayments (28pps since June 30th). the problem is that there have been further amortisation since the June 30th NAV publication and which will have been included in the 28pps. I estimate just about 2pps attributable to this, in which case the NAV is likely nearer to 32p which is not far at all from what I had modelled. But we should still add into this the effective IRR of the loans which I estimate to be around 0.8p.

I see little point looking at the Ords in detail as the loans are effectively equities with no bond/loan analysis as relevant as it is with the Cs.

As Siobhan Sharpe would say - "Go ADs".

So the published NAV was 31.95p. My estimate was 32p, so I am pleased the model is doing what it ought. This is important as I have modelled the amortisations and I think I really understand what is going on here. I bought even more just before the close today as I feel that no one is bothered with this any more and not taking advantage of what is on offer. Worth noting the market cap of just £29.52mn basically takes this off many radar screens. Not mine.

I have given up analysing the Ords as they are ADs or a French glass loan. Anything might happen, although I retain a few for the pure cheapness/optionality. Should break even at worst from here after huge gains from buying when the share price was a totally idiotic 14.5p a few months back (16.5p of capital already repaid!). But it is worth noting that a largish holder is the Foresight Group who specialise in renewables. Hmmmmmm.

Also worth noting that retail only hold a small % of Cs and Ords. Not many retail properly understand asset-backed, especially smashed-up loan funds. Those who originally held likely harbour a hatred for its management, which leaves the coast clear for the clear-minded.

[ctrader3] 24/12/2021 11:08

happy xmas to all fellow mushrooms.

[chucko1] 23/12/2021 13:34

I actually thought yesterday's "update" was positive for the Cs. Why? WIth the short average life and heavy amortisation schedule, no news is good news and that will play out in the coming months as capital repayments are made (though with random announcements, as is par for the course!).

On Loan 44, they made it clear in the previous asset by asset update that this inability to refund had a high likelihood, but that then the repayments would occur over 12-18 months, but likely in full.

As for the Ords - clear as mud. The news on the French glass loan was pretty poor, though.

[spectoacc] 23/12/2021 13:20

Thanks @chucko1.

[chucko1] 22/12/2021 12:59

It is worth recalling that Loan 44 repaid a fair chunk of its principal last (financial) year.

Also, an NAV of 31.95pps reflects further amortisations as expected and collections of interest at an average of 10% or so.

On that basis, it is a mystery why a further moderate repayment cannot be made to shareholders, but nothing was ever normal with this outfit.

My own estimate of NAV was pretty well what they just announced, but the Cs have deviated somewhat lower and it is not easy to see why. Especially as they are now effectively marking the assets to market using a discount rate which may vary frequently.

[wilwak] 22/12/2021 11:38

I still feel that both classes are a ‘buy’ particularly the C Class. Hoping for a capital return announcement soon.

The share prices are drifting lower. Can’t be helped by the fact that the shares are ‘sell only’ at IWeb and Barclays!

[ctrader3] 22/12/2021 10:25

6 October 2021



KKV Secured Loan Fund Limited

(the "Company")




Update on Assets

The Board of the Company is pleased to announce that two loans within the C Share Class Portfolio, that provided regulatory capital for a US insurance business, have been purchased by another party. The loans have been purchased for consideration of US$4.0m. As at 31 December 2020, the loans had a carrying value of zero. The loans were marked as Borrower 42 and 58 within the C Share Class Portfolio in the December 2020 Half-Year Report and Accounts.

Additionally, a loan within the Ordinary Share Class Portfolio that financed domestic heating systems and associated maintenance contracts has been settled. The loan was purchased for consideration of £3.8m. As at 31 December 2020, the loan had a carrying value of £3.0m. The loan was marked as Borrower 10 within the Ordinary Share Class Portfolio in the December 2020 Half-Year Report and Accounts.

Finally, the Board of the Company would also like to notify investors of two smaller settlements of positions within the Ordinary Share Class Portfolio, as detailed below:


Borrower

Consideration

Date of Completion

December 2020 Carrying Value

Loan Description


181

£0.0m

12 July 2021

£0.0m

Farm scale AD Plant


35

£0.3m

31 August 2021

£0.0m

Moveable micro hotel


1. Position was written off post receiving nil value from administration

The Directors intend to convene a board meeting in the near future to consider a further return of capital.

[ctrader3] 22/12/2021 10:06

The Board will not distribute more than 50% of the Bonus Pool until such time as the Net Assets of the Company fall below £20m and no part of the Bonus Pool will be paid out until such time as a minimum of £80m has been returned to Shareholders cumulatively since 1 July 2021.



Bonus Payment



In light of the events during the last 12 months, the Board have been required to devote considerably more time to the affairs of the Company than would otherwise be expected of a board comprising a majority of non-executive directors. To recognise their efforts, the Board proposes a one-off cash bonus of £280,000 to the Directors, payable in such proportions as the Directors determine. The Bonus Payment shall be payable in two tranches, with half being payable prior to the end of 2021 and the balance to be deferred until the earlier of 1 January 2023 and the date at which a further £30m has been returned to shareholders.


-----------

not clear if the payment will lapse ? if it does they will simply
change the timescale.

[ctrader3] 22/12/2021 10:02

Borrower 44 – Wholesale Lender
Stage 1 Credit Exposure £8.43m ECL £0.07m NCV £8.36m
Same borrower as Borrower 20 in Ordinary Share Class
Stage 1 Credit Exposure £3.99m ECL £0.03m NCV £3.96m
Loans within the portfolio were affected at the start of the Covid-19 pandemic but management have reported that the position has steadily improved and has continued to do so throughout the second half of 2020. They have commenced amortisation and have being paying down additional sums since January 2021. We expect the whole facility to be repaid by October 2021 in accordance with their loan documentation.

--------
so it appears they were relying on receiving the above so they could pay
their bonuses.

[spectoacc] 22/12/2021 08:20

So they manage an RNS, but not a cash return, and for once some less rosy news, albeit not beyond the written down values.

[For the C's - not sure about that French glass maker in the Ords. And again no mention of ADs.]

[ctrader3] 22/12/2021 07:07

SLF Realisation Fund Limited

Quarterly Net Asset Value Updates



SLF Realisation Fund Limited (the "Company") announces the following NAV and trading updates. The borrower numbers are by reference to the Company's Annual Report and Accounts for the year to 30 June 2021.



Ordinary Shares:

As at 30 September 2021, the unaudited estimated NAV was £72.32m or 20.32 pence per Ordinary Share. This compares to £93.24m or 26.19 pence per Ordinary Share from the June 2021 audited NAV.

The total return per Ordinary Share during the period from 30 June 2021 to 30 September 2021 was therefore 0.5 per cent (after taking into account capital returns during the period). A total of £21.36m has been returned to Ordinary Shareholders during the period, reflecting 6 pence per Ordinary Share.

Since 30 September 2021 there have been the following notable developments:

Borrower 20: A wholesale lending position, has not refinanced prior to its maturity date, and it is not anticipated that it will repay in full in the near term. The interest on the position continues to be paid in full by the borrower. The Company expects the principal to be repaid over time as underlying loans mature and are repaid, however, the timing of such repayments remains uncertain. The Company has security over the underlying loan pool, however, the amount that will ultimately be recovered by the Company may be impacted by the performance of the loan book. The Company has downgraded the internal rating of this position, however, this will not impact the carrying value under the Company's Fair Value Methodology, as the holding is currently held at a discount to book value. The position as of 30 September 2021 represented 2.8% of the Ordinary Share NAV.

Borrower 6: A French glass manufacturer has suffered from increasing energy costs and issues related to a key operations project. The borrower has requested an extension to the payment profile and a restructure is under negotiation. Subject to the outcome of the restructuring, consideration will be given to the impact, if any, on the Fair Value of the position. The position as of 30 September 2021 represented 25.1% of the Ordinary Share NAV.

C Shares:

As at 30 September 2021, the unaudited estimated NAV was £44.39m or 31.95 pence per C Share. This compares to £82.95m or 59.71 pence per C Share from the June 2021 audited NAV.

The total return per C Share during the period from 30 June 2021 to 30 September 2021 was therefore 0.4 per cent (after taking into account capital returns during the period). A total of £38.90m has been returned to C Shareholders during the period, reflecting 28 pence per C Share.

Since 30 September 2021 there have been the following notable developments:

Borrower 44: A wholesale lending position, has not refinanced prior to its maturity date, and it is not anticipated that it will repay in full in the near term. The interest on the position continues to be paid in full by the borrower. The Company expects the principal to be repaid over time as underlying loans mature and are repaid, however, the timing of such repayments remains uncertain. The Company has security over the underlying loan pool, however, the amount that will ultimately be recovered by the Company may be impacted by the performance of the loan book. The Company has downgraded the internal rating of this position, however, this will not impact the carrying value under the Company's Fair Value Methodology, as the holding is currently held at a discount to book value. The position as of 30 September 2021 represented 9.5% of the C Share NAV.

[spectoacc] 20/12/2021 13:31

Assume we'll get no cash return news this close to Xmas, but never know with SLFX.

[ctrader3] 10/12/2021 08:12

phone them up, tell them they haven't changed the
name and ask if u can deal over the phone at
online rates.

on a different tack, I'll be really concerned
about the management here if they aren't
able to ensure their bonus payments are
paid this year.
guess the interpreation of returned is open
to debate.