Uil Share Discussion Threads

[morton2011] 22/11/2017 12:29

Hi @V

Shame the dividend not increasing to get more interest in UIL - remains a reasonable income stock for me.

The cynic would say it is very convenient for UIL to raise all the recent cash by issuing the ZDP UIL (to use next year if needed) and then exercise its options in ZER for cash which it did not have before the ZDP issue...There are various other moves by ZETA to those you mention - this should work to show them for last 6 months.



this is one announcement listed and is significant



ICM shuffling their cards as ever. Axelrock is another opaque ICM 'investment' company. It does actually possibly makes it a little clearer as to the overall position and by increasing the size of ZER it may become more liquid unless Axelock is just owned by ICM directors/ affiliates that also own ZER and UIL. The increase in size itself will help and thus be something UIL can actually sell down. Effectively its a rights issue to increase existing stakes in ZER companies.

Overall seems ok and the GME investment seems to be of interest to those following miners as it has potential to mine metals needed for batteries for cars etc.

Afterpay continues to boom in its business AUS $ 1.7 billion they say now annualised on last 3 momnths of revenue within 3 years of setting up is very impressive , worth reading this



it is getting attention from regulators possibly driven by competitors I guess which is why they are justifying their model. Seems to be various similar businesses and providers in Europe but it does not seem to be popular here. Paypal offer a form or credit in their 'pay after delivery' model for instance in the UK.
Not sure why they are quite so successful in Australia but they are getting a really good database of users: millenials, credit worthy, tech savvy, get to know where they spend their money etc '1.3 million customers, 20 % of online apparel orders, 5% of all online' they now claim go through their systems. Some big financials will definitely be watching this carefully but its worth $ 1.25 billion market cap already so leave to mr market to value this properly.

[vacendak] 22/11/2017 10:06

The ICM secretary got busy and posted a lot of updates recently:

[UIL Ltd]
October factsheet:

The timing was perfect for reporting good news, the NAV was up nicely. Both the NAV and share price have been rockier since.
Gearing going down slowly.

Dividend declared, same as usual (1.875p per quarter):


[Utilico Emerging Markets]
Factsheet:

Slight underperformance compared to the benchmark, but otherwise steady as she goes.

And a half-year report:

Overall upbeat report, dividend to go up. The portfolio is slightly more concentrated at 83 holdings, down from 92.
The Chinese holdings have lightened up seriously since March, UEM exited China Gas Holdings Limited (“China Gas”), which was responsible for most of the drop.

Now for the strange bit at the end of the chairman's statement on page 3:
"Over the last 18 months UEM has paid, or accrued for, taxes of £6.8m. Given this increasing tax charge, the Board and the Investment Managers are considering options for a possible change in UEM’s domicile."

UEM is domiciled in Bermuda, like UTL. Where would they be planning to go to lower their taxes?

[Zeta]
October factsheet:

Again good timing for the reporting before the recent correction in the ZER share price, mostly recovered as of today to be fair. Panoramic did well last month.

The last line mentions that UIL Ltd exercised all its Zeta options, this is not mentioned in the UIL Ltd factsheet.

[vacendak] 17/11/2017 11:15

[Zeta]

It looks as if Zeta is about to offload NZOG, the offer seems to be at roughly 10% premium to the current NZO share price.

Cannot get the NZ stock exchange on ADVFN but got this from the NZOG website:

It seems that Zeta would be selling on the way up.

Hopefully, if the deal goes ahead, it will also filter through UIL Ltd NAV and, with an even bigger helping of luck, make people want to buy UTL and lift the share price a bit; because the YTD data is looking pretty lame right now.

[vacendak] 03/11/2017 15:19

[edit]
I had read the numbers wrong from the RNS.
Only about a third of ZDP 2018 shareholders have opted for the rollover, so that explains why I got all I wanted to rollover.

Things went well for UIL Finance in any case as the ZDP 2024 share price jumped by 3% at the first close. For those who rolled over their 2018, this is more or less the little bonus on the accrued capital we got through the offer.

I found this yesterday when looking for the numbers:


UIL To Issue 26.7 Million 2024 ZDP Shares Pursuant To Roll Over Offer (ALLISS)
Alliance News
23 October, 2017 | 12:15PM

Investment company UIL Ltd said Monday it will issue up to 26.7 million new 2024 zero-dividend preference shares pursuant to a previously announced roll-over offer. In September, the company's unit UIL Finance Ltd announced an offer for the holders of 2018 ZDP shares to roll part of their investment into new 2024 ZDP shares, a placing of up to 30 million 2024 ZDP shares and a subscription of up to 20 million 2024 ZDP shares.

The company received valid elections from shareholders in respect of 17.1 million ZDP shares, representing around 34.4% of the total number of 2018 ZDP shares in issue. UIL Finance has accepted in full all applications made by eligible shareholders and, pursuant to the rollover offer, will issue 26.7 million new 2024 ZDP shares on the basis of each 2018 ZDP share converting into 1.56 2024 ZDP shares.

The company also intends to issue up to 3.3 million new 2024 ZDP shares pursuant to the placing. The results of placing are expected to be announced around October 30.

[vacendak] 24/10/2017 14:13

Still relatively recent piece on ZDPs and "splits" in general


I think the key quote is at the end: "There is a price to pay for complexity, however. Many investors shy away from funds that are hard to understand."

[vacendak] 23/10/2017 12:25

Results of the rollover offer:

They seem happy at the results, although it represents only 34.4%, which is below the entitlement of 38.5831% of each holdings.
I could be reading that wrong too.

Still the expected announced extra placement is only for 3,282,890 new 2024 ZDP, which is relatively low, so merely a top-up for the 26,717,110 shares that are rolled over (1.56 ZDP 2014 for each ZDP 2018). So I shall interpret this as positive indeed.

I have yet to received the result of my rollover application.

As noted in the RNS, UIL Ltd will likely get 20 millions ZDP 2024 for itself that it may drip feed in the market to pay for the October 2018 redemption exercise of the reminder.

The share price is nicely up today, trading more than usual and a likely 10K buy.

[vacendak] 16/10/2017 15:13

Factsheet for September:

Blame put on Resolute for the drop in NAV (gold went lower last month before climbing slowly recently).
A couple of mils have been shaved from the overdraft, but gearing up due to the NAV drop.

Good news from Afterpay Touch Group with a contract from Jetstar (low cost Quantas subsidiary).
Zeta up by 5.3% and Somers by 1.8%.

I have at last read the paper version of the AR. Did you know that UIL Ltd traded at a PREMIUM of 3.9% back in 2008?
It was after the restructuring and change in investment strategy (2007) so it was already the UIL Ltd we know even if the name was still Utilico Investment Ltd.

[vacendak] 09/10/2017 11:33

Just putting some ballast in the pf as pseudo-fixed income, as I see the dividends being in essence collected at maturity; but not planning on making millions at 4.75% indeed.

[Prospectus]
I sort or read through the 125 pages in the end and learnt a few things.

For instance, the official list of UIL Ltd subsidiaries are (p. 117):
UIL Finance (I knew of that one of course) 100%
Bermuda First Investment Company owned by UIL Ltd at 95.8%
Energy Holdings 100%
UIL Holdings Pte Ltd, dormant, 100%
Zeta Resources Ltd owned at 85.5%

All the above are incorporated in Bermuda, except UIL Holdings Pte Ltd which is incorporated in Singapore.
Still no word about what UIL Holdings Pte Ltd is intended for, it has been showing up in the small prints at the back of the ARs for some time.

I assume the rest (Somers, UEM, etc) are merely considered investee companies.

[topvest] 06/10/2017 20:47

I'm not really interested in rolling for a 5% return. Just not worth it as I want 10% per annum ideally for any investment.

[vacendak] 06/10/2017 19:22

Just received my formal corporate action notice from Equiniti, for the rollover of my ZDP 2018. I have been asked to make my decision by October 25th.

This is a bit odd because the prospectus mentions October 20th as the deadline with the rollover results due to be announced on October 23rd (see page 43).

Anyway, I have already applied for the full amount. I got all I wanted last time (ZDP 2016), but this time the entitlement is even lower.

[morton2011] 05/10/2017 10:35

They always seem to buy the same amount and at 165. That seems to be the price UIL protecting as they were doing share buybacks at that price as well and Annual Report suggests more to come. Prefer debt being paid off personally.

UIL sold off 1% of Afterpay Touch for $Aus 8-9 Million in recent weeks I saw this week, it was around 10% of UIL's holdings. Seems prudent to take some profits out of Afterpay Touch.

[vacendak] 05/10/2017 10:19

Director's buy, always reassuring:


[edit]
A few more directors doing so as the RNS notifications drop in.

[vacendak] 29/9/2017 14:13

Having read the RNS again in more details, I missed this bit:
"In the event that UIL decides not to sell some or all of the 2024 ZDP Shares acquired by it pursuant to the UIL Subscription then UIL may, at any time, transfer back any 2024 ZDP Shares held by UIL to UIL Finance for cancellation in consideration for UIL Finance releasing UIL from its obligation under the Subscription Agreement to the fund the redemption of such 2024 ZDP Shares."

This does not mean that they MUST cancel the extra ZDP 2024 if there are enough 2018 rolled over and a successful placement of the new ZDP 2024 occurred.
The only limit on this deal is the 1.35x cover threshold for the freshly minted ZDP 2024 (they had the same multiple threshold for the previous ZDP 2016 rollover offer).

The basic entitlement for the rollover is pretty low at 38.5831%. Last time (2016) it was 55.979%.

Also from the RNS, lovely euphemism for all the juggling they do between warrants, debt swaps and other incestuous deals within the ICM managed family:
"The Group's Joint Portfolio Managers also have a track record of raising funds through alternative debt structures both for the Group and for other companies which they manage."

[edit]
I should have put my glasses on:
The cost for the rollover/placing/subscription exercise is estimated to cost £0.56 million.
and not lead to an increase of capital of only £0.56 million as previously stated.
[/edit]

Funny thing is that everything is supposed to happen this October (2017). Last time, they did the rollover in June 2016 for an October 2016 redemption.

It is as if they want to lock things in before the interest rates seriously go up. This would be a wise move.
With hindsight, I think they got Brexit wrong last time with being caught with their pants down by hedging Sterling the wrong way, hence their use of the Scotiabank rollover facility for the hedging faux-pas.

[vacendak] 28/9/2017 18:25

My take, again just quick read, is that the 2024 subscription/swap/cancellation solution will not require them to request a temporary facility with Scotiabank like last time to smooth the rollover. As sarcastically hinted at in my previous post, if they do not ask for the temporary overdraft, they will not get it, so will not be tempted to use it for something else.

Of course, costs must be involved with the proposed juggling of ZDP 2024, so we are back to the issues of fleecing UIL Ltd with fees by using Stockdale Securities Limited (owned by Somers, part of the family). I assume those costs are less than those of an overdraft.

The NAV is sliding again indeed.

...and 4.75% is still better than a cash ISA. :)

[morton2011] 28/9/2017 18:06

@V
Be interesting to see what the 2018 holders do. Assuming 4.75% is attractive for 6 year investors the premium should encourage a 2018 holder to swap. A 2018 investor can simply sell their 2024 holding in next 12 months if price stays above 100 p for the 2024 and make a small gain instead of holding the 2018 to redemption hence the premium on offer I assume.
If they are all taken up then 30 million new shares created but only 38.5831% of the 2018 zdp are cancelled as per the RNS so £ 49 million will need repaying in 2018.
Not every 2018 holder going to convert so the extra 2024 shares that are placed actually adds to the debt today albeit it could repay some of the o/s bank loan.

I don't understand how UIL taking on £ 20 million of 2024 ZDP helps in any way. If they have £ 20 million in the bank just pay down the bank debt now. Unless they are not paying for them until they are sold into the market and then use the funds to repay the o/s bank loans or 2018 zdp in 12 months which would be ok, 128 pages too long for me to find out.

Overall it is reducing the cost of all the debt and providing there is less than £ 80 million raised from new ZDP and bank loans in next year seems a good strategy for meeting the 2018 redemption.

I got it wrong on the NAV prediction in my last post partly due to sterling strength and the aussie shares all dropping in last few weeks. Resolute given up the 30% it gained in a month to early September in the last 3 weeks.

[vacendak] 28/9/2017 16:48

The prospectus for the ZDP 2018 rollover is out, a beefy 125 pages:


This is related to today's RNS:


I have gathered the following from a quick read:
* The equivalent yield will drop significantly. The ZDP 2018 were at 7.25% the ZDP 2024 will be at 4.75%. Remember that the latest rollover (ZDP 2106 to ZDP 2022) dropped only from 7.25% to 6.25% (the BoE rates were low already back then). So bad news for the rollover but it may also say that UIL Ltd is now considered far healthier than it used to if it can manage to offer only 4.75%.
* From what I have understood: No Scotiabank facility shennanigans possible this time around - they did not actually used it to smooth the rollover but stanched some forex hedging gone bad - as UIL Ltd will subscribe to additional ZDP 2024 that they would be allowed to off-load on the market (probably at a small premium) to plug any gap left by the rollover (investors opting to redeem their investment or part thereof). They also say that if any or all of those extra "subscribed" ZDP 2024 are not needed, they would be given back to UIL Finance for cancellation. So they would not use this to increase the debt even more.

I like the idea and hope it will work fine. Pretty miffed at the lower yield on offer though. :(

[edit]
There will be a slight premium at the rollover date (156p per ZDP 2018), I have not played with the calculator but I assume this is to soften the blow from whatever time was left to October at 7.25% yield equivalent.

[vacendak] 26/9/2017 09:07

Holy smoke, up by 4 at the opening!
Someone bought more than a thousands at 168p.

Got lucky with my divi reinvestment yesterday then. It is automatic so cannot really boast about the timing though. :)

[vacendak] 22/9/2017 13:00

Another drop in the NAV (267.46p) but the spread has been very reasonable of late, around 0.3% as it seems to be trading a bit more than usual... mostly selling though apart from today.

[vacendak] 20/9/2017 14:50

Some financial reports for both UIL Ltd

(could find it on the UIL Ltd website yet)

... and UIL Finance LTD.



The numbers look good thanks to the fact that last year's meteoric rise followed by the nasty fall, occured just after the cut off for comparison to June 2016... and the fall happened also before December 2016.

I think Allectus Capital Ltd is mentioned for the first time (I could be wrong though) as the "platform" for FinTech/PayTech.
Later in the Investment Manager's report we can read "...formerly named Vix Investments Limited."

They tell us that "The bleeding discount is there and will remain so live with it!" with more polite words as expressed in the following:
"A negative aspect of the platforms continues to be the 'discount on discount'. UEM's share price on 30 June 2017 was 219.50p, a discount of 9.3% to the diluted NAV for UEM of 241.92p. A look-through valuation of UEM, Somers and Zeta would increase UIL's NAV by 16.7% to 295.01p per share. If some brokers' look-through valuation for Infratil of NZD 4.00 per share was reflected in UIL's NAV, this would increase the look-through valuation by a further 3.2% to 303.10p."

The problem I see with this justification is that it works fine for British Empire Trust, as it is their raison-d'etre, they are looking into investing in discounted stocks; but in UIL Ltd's case, it is self-inflicted through their engineering of the platform approach. Especially since the so called platforms are barely traded, most likely through lack of free-float. It works fine for UEM because we no longer own the majority of it. In fact UEM is now bigger than UIL Ltd.

The gearing, including the ZDPs, has significantly reduced over the past four years and is now below the 100% target (again including the ZPDs).

ZDP 2018:
"The Board is considering proposals to refinance the 2018 ZDP shares and will announce further details in due course."

[vacendak] 16/9/2017 11:14

August factsheet.

Positive reading overall with a noted good performance for Afterpay Touch Group as previously mentioned by Morton in an earlier post.

Also noted the strong and steady contribution from UEM, of which UIL Ltd sadly sold a bit in the past couple of months.

[morton2011] 15/9/2017 10:12

@V
A long term follower of Augean, it was UIL buying into Augean that got me interested in UIL. Wise move to exit by UIL as you note.

[vacendak] 15/9/2017 08:46

Zeta 2017 audited financial report:


Things have perked up since last year, mostly due to the debt repayment to UIL Ltd. There is another chunk coming this side of Christmas if I have understood well.

Still no dividend, but Zeta has been on a serious buying spree of late. They only ended up with 85.75% or so of the Bligh Resources shares even though they wanted the whole lot. Not sure, but the threshold for compulsory purchase may be 90%, so they fall a bit short.

Not much commentary from the people running Zeta, but the numbers do look better.
Zeta still is still on a 24% spread, so not very inducing to trade either way.

[UIL Ltd]
Disappointing small drop in the published NAV yesterday 273.80p to last week's 281.31p considering the share price has been creeping upwards a bit... well technically merely going back-up, but it is the momentum that counts.

I have just had a look at Augean (50+% drop in share price recently), which we exited a while back leading to moaning a bit when it went up after the sale. It turned out that it was a very good time to sell by UIL Ltd retrospectively. Some shennanigans about landfill tax, HMRC and whatnot. I have noticed Morton dropping a few lines on the AUG thread.

[spectoacc] 14/9/2017 06:56

Ah, but at least instead of an offertory, they pay us :)

[vacendak] 13/9/2017 15:32

Being a UTL shareholder is like having a church wedding. It is all about belief, dedication, suffering and suffering. (*)
You cannot just "dip a toe". :)

(*) Did I mention suffering?