Ryan Mee, CEO of Fulcrum Metals, reviews FY23 and progress on the Gold Tailings Hub in Canada. Watch the video here.
Still yielding 11+% per year paid monthly, bought in today with proceeds from SONG sale. It seems too good to be true.
It's also possible to keep repeating the test until you pass. I think it's nonsense because all investments are difficult to understand, even after reading the 200 page financial report a retail Investor is unlikely to work out what isn't being said. Some of the investments that have gone bad for me have been due to things that were hard to predict. One in particular, SONG, was basically due to the investment manager with holding important information and inflating the NAV.
SMIF basically deal in debt instruments and seem to be doing a good job. I could spend weeks researching further and still not being able to predict whether this IT would go wrong.
The answer your question Geldautomat, ”Does that mean $135m of the $575m sale is held until December 2026 depending on performance of Verne as a business?" is sort of yes. It's based on performance during 2026 so I would have thought the payment would be after December 2026, maybe after the annual report. As Verne is not a publically quoted company I think they have quite a bit of flexibility in when this is completed. I think the earliest the payment will be made would be mid 2027. It's a long-term hold.
Arqiva is still generating revenue and if I remember correctly £180m per year, so plenty of money to pay off the RCF.
The values are just before TLEI stopped trading so $1 per share.
Huge spread so I'm guessing the market makers don't know where to set the price. Trading volumes are low which doesn't help. So far today it looks like there's been 161539 shares sold and 55025 bought out of 175684705 (using the most recent TLEI total voting rights. So not a lot of activity.
Analysing the TLEI I've built up this share register:
07/03/23 Credit Suisse Group AG 6.51% $11,437,074
20/03/23 Stichting Juridisch Eigendom Privium Sustainable Impact Fund 3.87% $6,798,998
13/12/22 Liontrust Asset Management Plc 4.99% $8,770,180
28/11/22 Secretary of State for Foreign, Commonwealth and Development Affairs 18.40% $32,321,892
23/11/22 Schroders Plc 5.90% $10,365,398
18/11/22 Thomas Ulf Michael Sieg 11.85% $20,818,638
18/11/22 ThomasLloyd Cleantech Infrastructure Fund SICAV 3.01% $5,288,110
18/11/22 BREVAN HOWARD INVESTMENT PRODUCTS LIMITED 16.91% $29,708,284
01/09/22 Charles Stanley Group Plc 4.33% $7,607,148
The question is what are these large institutional shareholders going to do. I assume that any transaction will be over the counter. My conclusion as usual is not to panic and hold. $0.50 NAV so maybe settle at a 20% discount, $0.40.
Mounting concerns about disclosure, how SONG’s royalties were valued when interest rates were rising, potential tax liabilities and a controversial deal to sell a quarter of its assets to another fund run by Mercuriadis provoked a shareholder rebellion in October and the appointment of a new board.
Although we advised them to do so, investors might now regret voting against the cut-price $440m asset sale to Mercuriadis’s Hipgnosis Song Capital. Money from that sale could have repaid debt, bought back shares and funded a reinstated dividend.
However, we stand by our recommendation to vote against both the transaction and the continuation vote that took place on the same day. Without these, SONG would not have achieved the “reset” required to put it on a new footing.
Investors may despair at developments but can take some reassurance that the valuation is now much more robust. Their best hope for the shares, which trade 31pc below the reduced NAV, lies in Naylor. A former chairman of rival fund Round Hill Music Royalty, Naylor was headhunted on his achievement of selling RHM at an 11pc discount last year after its shares suffered a similar fall to SONG’s.
As things stand, there are four scenarios for the company: a bid from HSM’s owner, the private assets giant Blackstone; the firing of HSM and a sale to another bidder; the dismissal of the manager and appointment of a new one; or, perhaps the most unlikely, the reappointment of HSM on new terms.
Unfortunately, as Bon Jovi sang, “we’re halfway there”. We advise investors to hold on in the belief, expressed by 5pc activist shareholder AVI, that a “bright future” awaits the company.
Investors in Hipgnosis Songs Fund were left “Livin’ on a Prayer” this week after the music rights fund slashed the value of its portfolio by a third and said dividends would not resume as the trust seeks to cut debt.
The fund, known by its share price ticker SONG, shocked shareholders with the news that Shot Tower, a Baltimore-based valuer hired to review its 65,000-song portfolio in December, had written down their value by 26pc.
This was more than analysts had expected after the fund’s new chairman, Robert Naylor, cautioned shareholders not to rely on the net asset value (NAV) produced by former valuer Citrin Cooperman, which resigned. KPMG also replaced PwC as auditor.
After accounting for currency movements and borrowing, the NAV per share for sterling investors plunged by 35pc to 92.08p.
The shares sank by 8pc on Monday as Naylor told investors that dividends, which were suspended in October, would not resume as the fund prioritised paying down its $674m borrowings, which had exceeded the 30pc of assets limit of its lending agreement.
Analysts said the writedown showed that fund manager Merck Mercuriadis had “clearly overpaid” for songs in the rush to deploy the £1.3bn raised from investors in the three years after the fund’s 2018 launch.
Mercuriadis, the charismatic former record label boss who chairs SONG’s fund manager Hipgnosis Song Management (HSM), previously described his mission to elevate songwriters in the music industry.
Unfortunately, he has done so at the expense of the shareholders he drew into SONG with the promise of steady returns, not linked to the stock market, from royalty investments.
That claim looks hollow with the shares at 63.5p, 36.5pc below their flotation price and paying no income.
In the 2020 annual report, Mercuriadis cited Bon Jovi’s “Living on a Prayer” as an example of the impressive growth in revenues hit tunes were garnering from music streaming platforms. However, amid all the breathless commentary, he said nothing about how much had been paid for any of the fund’s songs or how much money they were individually making.
RNS 8th February: "the Icelandic Regulatory Approval, has decided to open a "Phase II investigation" into the Verne Transaction". This spooked investors because of the possibility of a delay or no sale. Share price crashes (further!).
RNS 6th March: "unconditional merger control approval in Iceland was granted on 5 March 2024". Problem from 8th February solved, share price jumps up.
Sort of logical except that the crash on 8th Feb was an over reaction.
Unhooked, Concord bought Roundhill Music Royalties, so there's at least one other. The board have gone to great lengths to get the £20m bid sweetener approved so you would hope they have a good idea who the potential bidders could be.
The thing that confuses me is the fact that the USD440 million sale of 29 catalogues to Hipgnosis Songs Capital was voted down I assume because it was considered too cheap. It may well have been a good deal in light of today's news.
At first glance it looks like the RNS confirms what most posters on here expected. Why some shareholders are dumping is a mystery, it's a bit like being told it's going to rain then getting upset when it does.
Stealthj89, I've been looking over the posts and noticed your question.
It's a long term play, the additional £100m from the Verne sale is based on performance targets for 2026. I'm guessing these will be measured against the 2026 accounts which will at best take 6 months. So I think the earliest end of the wind down is June 2027.
A long-term hold for private Investors a sell for wealth managers and institutionals.
One for the bottom drawer, it could turn out to be very profitable but a painful journey with the share price spiking when insiders get wind of asset sale prices.
It needed my intervention to get the two parties talking which is odd.
Why buy? https://quoteddata.com/research/chrysalis-investments-turned-corner-qd/
A couple of corrections, Icelandic government and £300m of the £349m will be used to pay off the the RCF.
Today's RNS doesn't mean the Verne Global deal is off so at least £349m will be returned to shareholders plus whatever they can get for the other assets. Even if the Norwegian's try to stop the deal there's an appeals process or another buyer.
Verne Global sale £349m + possible £107m, market cap £167m, overreaction to administrative issue in Norway. I've bought.
@broomtree, I'm in a worse position and can't even average down as ii won't let me buy any more because Chrysalis haven't filled in a form. I've emailed Chrysalis and have received a response but nothing has changed yet.
@CaneToad, I've had a look at what you suggested and you clearly know your stuff, thanks.
As far as I can tell all other covenants are LTV not more than 60% except Santander which moves from 60% to 50% July this year. The latest Santander LTV from June 2023 is given as 47.5% so maybe a problem come July but the loan value is £62.5m and as of 9th November 2023 RGL had £32.6m cash so I'm guessing they could just pay some of the loan off to reduce the LTV.
I general the rent roll of £67.8m far exceeds the interest payments of £15.7m including the bond. So as far as I can tell the main issue is refinancing the £50m and of course the future of office space in general.