Uil Share Discussion Threads

[vacendak] 18/7/2016 19:59

Morton

Have you noticed Alliance Life Common Fund ltd in the "Notice of changes of interest of substantial holder" you linked to?

Alliance Life Common Fund ltd is... Duncan Saville. :)
A pretty old link:
hxxp://www.smh.com.au/articles/2002/04/14/1018333454549.html

"Saville became Resolute's largest shareholder after converting his $2 a share preference shares into ordinary shares as part of the company's restructuring last year. [That would be 2001 from the article date]

Saville is behind Alliance Life Common Fund which holds 42.69 per cent of Resolute and was the major impetus for last year's board spill which saw the exit of former chairman Bob Pett and chief executive Michael Carrick."

So yes, the Resolute & Utilico/UIL relationship is pretty old indeed. That was a hell of a long bet since 2002.

Alliance Life Common Fund Ltd, held through HSBC custody nominees and domiciled in Malaysia. Those companies are hard to trace on the web for stories and such, but there are some nonetheless. That being said, I saw a van with Vix Technology emblasoned on its sides in Loughborough a few months ago, therefore some of the companies UIL invest in do exist! That was reassuring.

[energiser01] 15/7/2016 12:39

Nav £2.65 door etc. Etc.

[vacendak] 15/7/2016 10:17

The June 2016 factsheet is out on the UIL website.
Resolute is now the biggest holding in the portfolio.

They have also apparently made a killing on some Resolute Convertible Loan Notes.
"UIL converted its holding of Resolute Convertible Loan Notes at 100p and placed out the resulting shares in the market at higher levels."
They used to refer to Resolute as a "long term" investment/bet when they were lending them a lot, I guess they got it right in the end.

According to the factsheet, Zeta is also recovering slowly and the Somers deal seems to have been beneficial too since Somers was up in June (5.8%).

The gearing looks a bit healthier too. Back in January it was reported at 152.9% and is now down to 82.7%. In the latest annual report, they mentioned they had a goal to reduce the gearing to 100%.

[vacendak] 14/7/2016 10:20

Morton
Another good analysis. Careful though, Saville with all his money could hire a hitman and silence you. :)

Funny that you pointed out that the ZDP shareholders have done better over 10 years. When they restructured the company the last time they gave me a lot of ZDP 2012. Being younger and greedier than I am now, I thought that 7.25% a year was a paltry return compared to the Ordinary Share (they sort of tripled in value every couple of years back then). I wanted to sell them but in the end cashed them in at maturity. I did have a use for the money back then anyway; but with hindsight, I should have rolled them over and drained my cash ISA. Oh well, live and learn.

While the Ordinary Shares have been doing less than stellar over the past ten years, they also started to pay not-to-be-sniffed-at dividends in early 2011 (specials then regular), which of course became more substantial as a yield figure as the share price dove.

I agree that the fees seem to be an issue, but if they were milking UIL for these, why would they voluntarily lower the fees for ICM until the share price for the ordinary shares goes back up? After all, as discussed above, all those companies are linked to one another. Good of you to have spotted Somers in Stockdale. I visited the Stockdale website when reading the ZDP 2022/rollover offer prospectus but did not think of checking on who owned them.

And yes, UIL indeed owns a lot of Somers, "a lot" being an understatement as it is now close to 70% with that recent special resolution authorising them to go ahead with the transaction. It was kind of them to ask us, but with GPLPF having more than 60% of the voting rights, this was already a given.

Share price still climbing at +2.25 today.

[morton2011] 14/7/2016 08:23

All rather strange - reading the RNS:

20 June they cannot place all the 2022 shares they offered in a public placing with 'certain institutional investors' which offer 6.25% - they only raise £ 12.9 million. UTL then use these funds to buy a further 9,000,000 2022 shares itself so they only raise a nett £ 3.9 million approx.

1 July - offer to place 2020 shares at 4.54% to raise £ 17.9 million. Bit odd to do this if you cannot raise all the money a couple of weeks earlier at 6.25%

8 July they cannot place all the 2020 shares but have sold £ 13.8 million of these 4.54% interest shares to 'certain institutional investors'. UTL to the rescue again as they use £ 4.1 million approx to buy the rest of the 2020 shares. Nett proceeds £ 9.7 million.

These nett proceeds for ZDP shares in the last month of course will then need to pay the fees for the various (no doubt 'unconnected') advisers. Aha maybe not totally unconnected.. Stockdale who undertook the placing from their website 'is a private company and staff are shareholders in the business. Our main shareholder is Somers Ltd'.. seem to recall UTL owns a lot of Somers.

So maybe nett proceeds of £ 12 million.

UIL now have the shares to sell in the market - if they cancel them then all they have achieved is paid fees to advisers for nothing.

11 July they sell 500,000 of the 2022 shares at 105. A great 'profit' but as usual a little unclear for who. This is as the buyer, lets call them a 'certain institutional investor' has now bought these and will get a yield of 5.3%. Were they asleep when the shares could have been bought a month earlier at 6.25%. Why did the 'certain institutional investors' stump up £ 13.8 million for 4.54% return on the 2020 shares 2 days before etc and not simply buy higher yielding other UTIL ZDP on the market.

From UTIL point of view why do they actually want all these ZDP shares? Its the main reason why there is such a steep discount from the NAV. After 10 years its the ZDP holders and the advisers (Mr Saville et al) who have been the main winners compared to a shareholder.

With all this said the underlying assets are on the up short term and its an interesting portfolio with lots of potential upside. It appear's that Mr Saville has a lot of his money in General Life (>50% of the shares in UTIL) and one day he will want that money out of UTIL. We mere mortals will hope this ensures that all these fees and plaudits that come from managing Mr Savilles investment empire mean less to him ultimately than that original investment.

[vacendak] 11/7/2016 19:25

And they are already selling the ZDP 2022 UIL bought at issue from UIL Finance at a premium.

[vacendak] 11/7/2016 10:16

Will ICM/ICMIM finally get their full fees soon?
The latest prospectus related to the 2016 rollover stated:
" The Joint Portfolio Managers have reduced the management fee payable by UIL to 0.25 per cent. per annum until such time as the performance fee high watermark of 284.81 pence per Ordinary Share is regained."

There is still some way to go. I thought it was the NAV, which would be close by now, but no, it is indeed about the share price, which is a far higher hurdle due to the current discount.

[vacendak] 08/7/2016 09:11

Result of Placing of 2020 Zero Dividend Preference Shares:


The placing was not for the plebs.
As for the ZDP 2022 issue, UIL has "bought" some from UIL Finance and will likely offload them at a premium later.

UTL up 0.25 after having been down 0.25 at opening this morning. This could be linked to the news.

[energiser01] 07/7/2016 13:53

Nav still marching upwards to £2.40 a couple of days ago.
Dyor etc....

[vacendak] 01/7/2016 10:39

Morton
Thanks for doing the maths, very insightful.
DYOR is all well and good, but I do not mind LODYR (Let Others Do Your Research). :)

The UIL people are indeed crafty when it comes to handling the debt. I remember the CULs (Convertible Unsecure Loan) back in the days.

Not sure if the recent price increase is due only to Sterling taking a dive, but I am not complaining.

[morton2011] 01/7/2016 09:42

RNS today makes the funding round clearer to me. UTL need to repay £ 67 million to those who did not subscribe to the rollover in June at the end of October. They are issuing a tranche of the 2020 shares at a decent discount to the funding earlier in the year at 4.54% gry. That funding combined with the overdraft and the 2022 zdp they hold and could sell will allow them to comfortably repay the £ 67 million in October assuming they don't spend it elsewhere.

The new debt profile this year and particularly after October will have a lower cost/liability to UTL per annum which will benefit the ordinary shareholder in the long term as well.

In 2010-2012 when the NAV was above 200 p then the shares were always above 150 p so would expect the share price to move above 150 in the next few weeks.

[energiser01] 30/6/2016 13:26

Uem recovering strongly. All helps here. Dyor etc...

[vacendak] 27/6/2016 11:17

The creation of Zeta was badly timed when resources were very "hot" (June 2013 if I am right). But, as usual, with Duncan Saville, his bets are pretty long and the UIL holdings in Zeta should indeed recover, especially as gold is quite in demand right now.


As for the shares (UTL) they are indeed likely to be better soon, the NAV is doing pretty well. Those pesky discount and wide spread are still a worry indeed.

[morton2011] 27/6/2016 10:44

AJ Bell handled it very well via their corporate actions in my SIPP. I also bought some 2016 ZDP early June and did not fully appreciate that they would rollover this month and not be paid up to October. I therefore needed a 1% premium to 'cover' my costs I discovered and that assumed getting the full allocation which I did but as noted its higher price than that now.

I was looking at ZETA on weekend. It is strange how Duncan Saville needs all these different vehicles. Cynic would say its for the fees but then you would get the fees if there was only one. ZETA owned 89% by Utilico and ZETA owned 4.5% of Resolute a year ago. I assume UTL reports its indirect holding in Resolute as well as direct in its factsheets but not clear. At present does not really matter as Resolute seems in a very good position at the moment as a largely debt free mature gold producer.

ZETA only had 10% of its assets in resolute and looks quite interesting as a recovery play on oil - share price was down over 70% at one point from 2013 so has a lot of potential to increase in next couple of years if minerals and oil recover.

UEM seems the weakest part of UTL in short term asset price but part of the attraction is the growth orientated balance.

Ordinary shares therefore remain geared and risky but lots of potential upside and I have been buying in last couple of months having sold out last year at a loss for a % of my portfolio. ZDP seem quite a safe way to get some yield and have always been quite liquid unlike the ordinary shares which have a wide buy-sell

[davebowler] 27/6/2016 09:15

I bought UTLC close to the rollover deadline as a back door into the new 2022 Zeros through my Alliance Trust Sipp.I asked Alliance to rollover and they ignored my repeated instructions before the deadline, so I am pursuing then for recompense. They haven't acknowledged my complaint though -at least they are consistent!

[vacendak] 27/6/2016 08:52

And +330% or so on one year. Not bad at all if one can just forget about 2013-14. :)

Zeta could pick-up a bit on that news too (around 30% of portfolio).

[davebowler] 24/6/2016 16:22

Resolute up 11%