Woodford Patient Capital Share Discussion Threads

[jonwig] 06/11/2019 06:27

chucko - I doubt there's a shorter term which is printable. Maybe "egregious eccentricity" is more accurate.

[chucko1] 05/11/2019 22:30

Jonwig, I would not use the word “stupidityR21; in isolation. However, I am not a trained psychiatrist, so I cannot offer up the correct group of words to use in conjunction. I can think of some, but they never end up doing justice to the subject matter.

[jonwig] 05/11/2019 20:19

Jak - this is the entry in the WPCT prospectus:

The Company does not intend to deploy long-term gearing but may
employ gearing of up to 20 per cent. of Net Asset Value, calculated
at the time of borrowing, for the purpose of capital flexibility,
including for investment purposes.

It looks straightforward enough! The word 'covenant' doesn't appear in the prospectus (standard search of pdf). And the bald statement above doesn't look as though it has a covenant which needs testing.

WPCT's CH pages have the Charge over the company which was created in January 2017, which seems odd as the overdraft was granted long before then. It's a 53-page document in dense legalese and can't be searched for keywords. (I haven't read it.)

I don't think any posters here have a holding in WPCT (or the funds) - our interest is purely academic together with, of course, intense curiosity why a man can exhibit such stupidity and lure others on behind him who should know better.

[ltinvestor] 05/11/2019 16:42

Great news just released by Autolus.Orphan drug status given by the FDA to one of its products which is saving children’s lives...How wonderful is that ?

[jonwig] 05/11/2019 15:04

@ Spec - often bad news on day1 leads to a drop, and day2 continues it. I've always thought that a lot of investors still use newsprint, or IFAs give their views with a time lag. Either would explain it.

Lucky to be aware of the daily 7 o'clock shocks!

[spectoacc] 05/11/2019 14:24

As a minor point - I see no reason why Schroders would have anything to do with the negotiation over the OD yet - it's only an intention to appoint.

Also hadn't noticed how weak WPCT was today,

And still awaiting this mooted sale of the junk from WEIF. Could it - perchance - include 9% of a particularly poorly-performing investment trust?

[schofip] 05/11/2019 12:29

The new captain of the Titanic is now on the payroll and has spotted the the huge iceberg off the starboard bow but is powerless to avoid the inevitable.

[cc2014] 05/11/2019 10:58

#163 Jonwig. Yes and now I think about it covenants aren't tested daily regardless, more usually 3 monthly or 6 monthly. So, I agree they haven't breached.

Which leads me to the view Schroders will renegotiate before they breach. I dont' see any particular problems here. It's not like a company where EBIDTA is collapsing. Its a fund that can sell some of it's investments.

#164. WIM are still working their notice period. I'd missed that. That explains why the NAV hasn't been adjusted

[spectoacc] 05/11/2019 10:40

@CC2014 - c.20p is not oversold ;)

Press seem convinced the banking covs are breached but didn't they extend them when they put in place the higher interest rate/restrictions on further investments? Heading towards squeaky bum time for Northern Trust tho, as we all knew would be the case. 5x asset coverage when the assets inc the likes of IH and a huge amount of largely unsellable junk, is not 5x.

And - Schroders aren't in charge of WPCT yet, and won't be for months.

Edit - governance doesn't seem to have particularly bothered Woody previously, exceeding eg unlisteds limits in WEIF, selling personal holding in WPCT etc.

Edit 2 - disappointed my expectation that RUTH would make its call on WIM whilst it had the chance, hasn't come to pass.

[jonwig] 05/11/2019 10:10

CC2014 - I don't think they have breached covenants - the press have it wrong! The prospectus says clearly that the debt ceiling is 20% of assets at the time it is taken out and makes no reference to future developments.

[jonwig] 05/11/2019 07:22

Woody never read this, obv, from 1999(!):

[jonwig] 05/11/2019 07:01

Link to the FT article:



... cut the value of Industrial Heat, which is trying to develop the unproven clean energy technology of cold fusion, because of “a delay in operational progress”.

WPCT has drawn scrutiny of its methodology in its valuation of Industrial Heat, which it has written down by 83 per cent since September last year, according to JPMorgan Cazenove estimates, having previously marked its value up by 357 per cent.
How on earth do they know there's a delay? There is nothing in the public domain to enable anyone to judge for themselves.

Do the math: a fall of 78% is needed to unwind a rise of 357%, so it's actually been marked down by more than that. But still some way to go to zero.

[daffyjones] 04/11/2019 22:47

FT confirming that WPCT has breached its banking covenants. Not clear what penalty can/will be applied.

Also coverage of Version, another failed Woody biotech play, which has seen its share price collapse 90% this year alone (on top of massive falls in previous years), once the Woody cash tap was turned off and they were unable to stay afloat. Now in a death spiral, trying to sell and lease back its headquarters but unable to do so. Circling the drain and likely going bust very soon.

[minerve 2] 04/11/2019 22:07

Industrial Cheat.

(Comment on the FT)

[spectoacc] 04/11/2019 20:54

Missed this from the earlier Klienmanwire article, via CityWire:

"It is not clear how much WG Partners is offering for the portfolio, though its initial bid is understood to have been around 20% below the level at which the Woodford Equity Income fund is valuing them."

I'd say if WEIF gets 20% under for a chunk of its junk, it's doing very well. Almost all of that will be held in common with WPCT, but if Link do write it down proportionately (they may not), the bigger issue will be how to eventually pay off the OD. And let's hope "eventually" isn't January (tho I accept I'm alone in that view).

[spectoacc] 04/11/2019 20:42

@Forensic - the scandal is how Link have been allowed to continue to issue a daily NAV figure, when all of us on the other thread (all the ones not filtered!) could see very clearly it was a "Not Asset Value".

Serious doubt on valuations been around for ages, been clearly public since the Guernsey listings fiasco, and came to a head with WEIF's suspension.

And there's further to go.

Though all anyone should really need to know is that Woody himself slotted 60% of his personal holding back in July, on the quiet.

[minerve 2] 04/11/2019 18:09

Still watching. No rush.

[kooba] 04/11/2019 15:58

The writedown, which the Patient Capital board said would knock 5p off the trust's 62.84p NAV, implies an 80% cut to the valuation of Industrial Heat, which was one of the trust's largest holdings. https://citywire.co.uk/investment-trust-insider/news/woodford-investors-suffer-further-blow-as-industrial-heat-slashed/a1289676Real scandal this one..never seen any evidence it was worth anything let alone the multi bag valuation increase last year.Looked at it when they revalued sharply upward and could find absolutely nothing to justify the increase but thought the management highly suspect with no experience in the field at all. All looks like a rather large con .

[spectoacc] 04/11/2019 15:02

I commented on that story when it appeared in the ST just over 2 weeks ago - "£200m-£400m" was the price given. Kleinman is usually pretty good, but hard to say if:

"The overall portfolio being pursued by the WG Partners consortium is understood to be valued at close to £500m, according to one insider."

means the buyer is paying £500m, or as per the ST story, the buyer is paying "£200m-£400m" for assets currently valued in Woody's books at £500m.

One thing's for sure - no one is likely to want to do Woody any favours. Price paid vs NAV the important part, and wonder if the IH revaluation is related.

A positive for WEIF holders if it comes off and a lot of the junk can be shifted in one go, and a positive for WPCT (depending on price..) if it goes to someone who might replace WIM in future funding rounds. Altho again - unlikely to be kind to the stub equity.

[jonwig] 04/11/2019 14:51

Alex - interesting. It says 'held by WIM' rather than WEIF or WPCT so both could be included. So it's not clear how much value could be attributed to WPCT.

[alexhemm] 04/11/2019 14:44

Looks like there is value in many of the ncompanies:
hxxps://news.sky.com/story/consortium-in-talks-to-buy-500m-woodford-portfolio-11853985
many of those also in Woodford Patient Trust
and multiple interested parties. So these holdings should be able to be sold between discount and NAV, Which would make today a good buying moment.

and it looks like a serious bid being considered.

"Other bidders for the portfolio of stakes in listed and privately owned healthcare companies included Rosetta Capital, a life sciences-focused venture fund, and Omega, a hedge fund."

[tartshagger] 04/11/2019 12:32

Someone was selling into last weeks Schroeder rally in size. You can't trade bounces like that because the mm marks it up massively before the open - he/she's got the insider info way before any PI.

I wonder why Woodford didnt invest in a nice little company called Fusion Antibodies (FAB). Not big enough at £15m i guess - however it has inovative products that mark it out in a crowded market, has begun generating cash from sales and the directors have been buying. There is definately no association with IH!

What does Dr Biotech think? i'm contemplating tucking a few away in my SIPP :}