LONDON (Alliance News) - Alternative Asset Opportunities PCC Ltd, which invests in traded life interests on the lives of US citizens, on Tuesday said it could sell some of the policies it holds ahead of maturity.
"It remains the intention of the board to hold the majority of policies to maturity, but the possibility of selective policy sales will continue to be kept under review as the portfolio develops," Chairman Charles Tracy said in a statement.
Tracy said the recent pattern of maturities has "significantly improved" the company's cash position. Cash and equivalents rose to GBP4.9 million from GBP1.1 million over the course of the six months ended December 31.
"With the average age of the insured lives over 92 the board will be considering how best to utilise the available cash, given that the combination of cash and available bank facilities will now be sufficient to pay premiums and expenses for the next 24 months, even with no more maturities," Tracy said.
"In deciding how to proceed, the board will be looking to retain cash in order to reduce reliance on bank facilities, thus reducing costs, but will also bear mind the possibility of making further cash distributions or undertaking share buy-backs. Actual cash flow will be the key factor, and the board must also allow for the irregular pattern of maturities in making use of cash flow forecasts.
Net asset value per share at the end of 2015 was 49.0 pence, compared to 43.9p on June 30, representing an overall increase of 5.1p in NAV per share during the period. Tracy cited gains on matured policies and the strength of the dollar relative to sterling. During the six month period to December 31, three policy maturities occurred, with a total face value of USD10.0 million.
The company has been notified of one policy maturity with a face value of USD4.0 million with the proceeds expected to be received within this financial year. "The policy is not yet reflected in the accounts and is proceeding through the verification process," Tracy said.
Assuming the maturity is verified it is expected to add about 1.4p to the company's net asset value.
Shares in Alternative Asset Opportunities were untraded at 45.25p on Tuesday morning.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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