Member Info for CJohnSpain

Hi Tully,

Yes, it is rather disturbing.

The registrars say they are unaware of the existence of Craven Industrial Holdings. They were delighted to be informed. I read over the Company RNS to them.

I'm writing a follow up e-mail to Link Asset management and to my two brokers.

I can't help thinking that a lot of the issues that arise with CRV stem from the fact that there is one key actor who tries to do far too much.

I also can't help thinking that CRV Cap and CRV Industrial would benefit greatly from a genuinely independent non-exec to give a wider perspective.

The general strategy of the split makes sense. What doesn't for me is the exaggerated price paid for the web sites. This is where a good non-exec could have performed a valuable service to all, including the existing board.

Let's hope the issue with Craven industrial is a temporary hitch.....

Hi Tully,

Thanks for your message; never a dull moment with CRV.

Ah, 10 days…

I've just contacted the company registrars and they tell me that they have not been informed by the Company of the Company split, which should be surprising…. They are looking into it for me and will get back to me mid/late next week.

All best

CJohn

I held my shares in pre-split CRV at Eqi (Selftrade) and Hargreaves Lansdown.

Now at both brokers, Craven Capital is on screen, but Craven Industrial Holdings have disappeared. no reference to them anywhere. This has not been my experience on previous occasions that companies have de-listed.

I'm going to contact brokers and CRV registrar.

Does anyone have any ideas in the meantime?

Thanks CJohn

Yes, $1 a share values the company at $3.9m, just under half what CRV paid for its almost 30% stake in the web sites.

It values the web sites at around $13m.

Still at pretty steep valuation in my view.

Hi Tully,

You ask, "How anyone could invest fourpence in the lunatic Swede……."

There's the rub. The Swede must have something about him, if he got Mark P to fork out $8m for a handful of websites. This is the same Mark P, who sweet talks investors into paying $10 per share for pre-split CRV.

Either the websites are a colossal error or there's some vital info we are lacking.

Please let the latter be true......

Hi return to go,

You will need to follow developments on the company website. It's not up and running yet.
Any news will be relayed here.

The underlying reality remains: the last quoted, implied price for Craven Industrial was at an eye-watering discount to net tangible asset value.

If the rationale for de-listing - to escape onerous AIM regulations that stymied transformational deals- proves to be justified, it makes obvious sense not to sell Craven Industrial, unless one has to for other reasons.

I won't be selling for the moment - either share.

PS I have been in contact with Mark Pajak.

The long reply he sent me was cogent regarding de-listing and overall approach , but no answer given re my enquiry about the rationale behind the website purchase.

The matched bargain facility would be potentiated by the company itself declaring an intention to tender for shares at a minimum price - say 5 quid- through the facility. I hope this idea which benefits shareholders who want to exit and those who want to carry on holding (increases NTAV per share) is given due consideration.

I'm afraid so.

Several start up web sites are worth very little indeed. Nothing we've seen so far indicates otherwise, sadly.

Hi Tully, thanks! That's clear enough. We still have the 818,675 shares in LMFA!!

I'm still wondering about the timing of the placings with new and existing investors at a price of $10 per share on the 12th and the 18th Feb for a total of $3.9m, just before the 24th Feb announcement of the non-binding options to purchase the 5 website businesses.

I can't help feeling that these investors must have been informed in general terms only - presumably? - of this new strategic direction and of the forthcoming split.

The split makes sense. What for me is problematic is to abandon an approach - deep value- which was working. (Possibly, I'm in minority of those who post here, who think we were making decent headway. At least, since I've been a shareholder. )

Likewise de-listing from AIM is justified, if it's going to let deals like Blacktail Mountain go ahead. But there's got to be a better exit mechanism for those shareholders who want to sell out.

We probably only have 178,675 shares left in LMFA. So its life and times are no longer so material.

Remember this RNS from the 3rd January:

"The LMFA loan ((loan from LMFA to CRV)) is repayable on April 15, 2020 with interest payable at a rate of 6% p.a. The LMFA loan is repayable in cash or, alternatively, the principal and all accrued interest can be repaid via the transfer of 640,000 shares in LMFA from CRVNA to LMFA."

Unfortunately, we were not updated on the 15th April, how this loan from LMFA was repaid: in cash or shares.

So CRV could still have 178,675 + 640,000 LMFA shares.

My bet is it's the first possiblity.

Thanks Tully.

Tully, good post.

Do we have an e-mail for M Pajak?

Only just caught up with this RNS. So it didn't spoil my weekend. Commiserations to fellow holders.

In the last year, this is the third company I hold shares in that has gone private.

-I expect a positive return at M-Pay (I invested post-delisting announcement).
-I am confident that management/owners are aligned with minority interests at Peel Hotels and have a strategy for realising shareholder value and returning cash to shareholders.

So I'm not, per se, against de-listings.

Also, it does make operational sense to split the web sites from the other assets.

However, there are at least three over-arching strategic problems with this de-listing:

1. We don't save costs: CRV Capital plc remains listed.
2. There is no strategy for realising value for shareholders at Craven Industrial Holdings.
Shareholders will be able to sell their shares, but matched bargain prices tend to be very low.
3. Even if M Pajak did have a declared strategy for realising value for minority shareholders, he seems incapable of sticking to strategy.

The strategy at CRV was working OK in terms of buying assets trading at deep discounts. Real tangible book value was rising.

So why not stick to the declared strategy? The lurch into flogging fish oils from copy-cat websites went against everything that he claims to believe in. There can be no confidence in management's strategic seriousness.

The assets at Craven House Capital plc - embryonic web sites - are optimistically worth nothing. They have almost no turnover and are loss-making. I, personally, would ask to be paid to take on such value-destroying "companies".

What will happen to CRV Capital's share price, post-split? CRV current market-cap is 8.7 million sterling. The assets of CRV Capital post-split are worth theoretically $8m - nearly all intangibles -
or around 6.4 m sterling. I think it's unlikely that CRV's share price post-spilt will trade at book value. So we might expect the share price to fall significantly post-spilt. (Halve??)

I've nothing further to add at the moment.

Agreed, Tully

But there are so many bargain shares now that CRV doesn't stand out so flagrantly by its cheapness. Why would any investor pick up CRV shares at this current juncture?

In the reams of value investment philosophy which usually grace the company reports, the director speaks with great theoretical passion of his love of crisis investing. Well, it's happening now. Every day there are amazing bargains, And I don't mean websites flogging omega oils and theatrical props.

There are absolutely staggering bargains in US pipelines and refineries, to give just one example.

Let's hope CRV profits from all the cash raised recently…..

Thanks for the post, Karina.

The entire value of Craven House Angola is a loan (or loans) to a company (companies) operative in Angola - principally 7Mobile. (I can't remember off-hand, if the loan to FMCD has been entirely repaid.)

Hence, impairing the value of the loan suggests that 7Mobile (and/or FMCD) may be having difficulties repaying. This is not necessarily bad news for CRV, as it may allow CRV to get hold of equity in the mentioned company/ies at a crisis rating.

Leeds Group is a small AIM-quoted textile concern with operations in Germany. It's majority controlled and run by P Gyllenhammer and his long-time associate Jan G Holmstrom.

I've followed the company for many years and put money in once, in a previous crisis. (No such intention this time.)

Anyway, yesterday along with a trading update, in view of COVID, Leeds group announced it was changing its registered address to CRAVEN HOUSE, 14-18 York Road, Wetherby, Leeds LS22 6SL.

At Companies House, the registered address for our Craven House is: International House, 776-778 Barking Road, London, England, E13 9PJ

What is particularly disappointing is that 800,000 CRV shares have been wasted on a few barely functioning web sites, at precisely the moment when there are absolutely staggering bargains in well-capitalised, profitable, asset rich public companies.

These are the very moments that self-proclaimed value investors like the director dream of.

Apart from the lack of functionality, the cliched visuals, it's the "business" that bother me.

Selling omega oils is a ludicrously competitive market with numerous on-line competitors with much better known brands.

This is an absolute disaster.

Hi Karina,

I will save up the pleasure of a visit to Scandi wildlife for later.

How could M Pajak be so naive? Why throw away your asset value investment philosophy and $8m dollars for a few beta web sites that are worth what? Close to nothng.