Member Info for oldpabear

After the recent turmoil I have reviewed the situation with Chrysalis and the present price. I refuse to accept the stupid figures spouted by the BOD in their recent RNS's.

As of today the Market Cap of Chrysalis is approx £455m. Looking at the figures of the NAV as at 31 Dec; the position in Starling was £436m, SmartP £123.5m, wefox £56m, 3 others added £74m. Klarna & cash totalled 128.8m - now I have adjusted that to £71m today considering buyback costs & Klarna share price. So todays value would be approx £760m.

Why does the market consider there being £305m risk in the portfolio? Starling/SmartP/wefox & cash look fairly risk free and maybe even undervalued.

My calculation is that allowing for a winddown cost of 10% & no further growth; this company has a 15% per annum compound growth to closure.

Please comment if you have data & arguments. DYOR

Just to add to the conversation. This lost it's way (my viewpoint) when certain active shareholders pushed to stop new investments.

Chrysallis was the baby of the Advisors - starting as part of their OEICS whilst at OMGI. After the MBO form OMGI to Merian It was spun out from OEICS to Inv Trust after the Woodford scandal to get the OEICS unlisted holdings down. The Trust never fitted the Jupiter model (after Merian almost collapsed) and the board supported the exit of the Inv Advisors from Jupiter.

The Advisors are the brains behind many successful investments but have been hanstrung by the board & Active shareholders in recent years. It is interesting how the board RNS quotes original investment share price and totally ignores NAV. The statement also cites lack of investment by the IA in Ops & Compliance infrastructure - what start-up would invest when the board is stopping any further investments (& therefore business continuation).

My opinion is that NAV matters - what I invested at is history: if I don't like it then sell. What is happening here is short term activism pulling the rug from the fund so they can achieve a 'quicker' profit. I agree that the BOD do not have the knowledge/ability to run the assets for optimal shareholder value.

Take a look at the investment level by the BOD - they should be ashamed.

If you look at the Quoted Data analysis from the RNS last week it shows the portfolio as at end Sept:

Business description % of portfolio 30 Sep 2025, Value 30 Sep 2025 £m, Amount invested £m

Starling bank 46.4 406.6 118.3

Sorry the format is lost, but the value of Starling is as per the FT article approx £4bn and Chrysalis owns approx 10%.

I'm getting lost in the negative market around this stock. I've done a little self analysis moving end Jun figures forward and including the Klarna IPO.

I calculate the net cash equivalent position today is approx £199m which equals 39p per share. Starling is looking at a secondary offering at 3.5-4bn which means the £384.7m value from June is reasonable still (thats another 75p a share).

So todays value is approx 122p a share when Starling & cash equiv are 115p. This means all other holdings are almost worthless???

Surely the market must reduce the discount very soon - I calculate it's approx 50p a share at present. I know these are unlisted, but the portfolio is maturing now at figures where the Inv Mgr numbers are correct. No wonder some holders want the portfolio liquidated.

Last Sept the carry value was £120.6m, and analysts from Deutsche estimated that to value Klarna at $14.6bn. Since then Chrysalis has invested a further amount (approx 8m). The present news is that Klarna is looking to float at 13-14bn in Sept. So down approx 10% from early this year.

Based on that Chrysalis would hold approx £120m value in Klarna today - only the Investment directors know. But it would account for the small set back in price.

We don't know the numbers, but the estimate is that approx $1bn will be raised. I'm not sure that Chrysalis will sell any and they will also be held from trading (tied) for a period. What this does is give a real Market value to that portion of the portfolio which they will be able to drip feed into sales based on IPO Tie contracts.

And to add...

Look at the market movement based on the news JGGI down a touch, HINT up 7.5%

This seems like a very one-sided proposal. There is big benefit for Henderson holders and benefit for JPMAM with increased assets & therefore income. But where is the benefit for JGGI holders? The proposal even give Henderson holders a premium value for the merger by ignoring the market discount.

As a reasonably large (by my standards) holder of JGGI, I am very disappointed by this proposal.

HL do not receive the dividend money until today. You are misunderstanding the dates that are published. The dividend cash is held by LGEN until paid out this morning.

Hope that helps. With LGEN - they are very slow to pay the div that they announce

I'm confused at your comment re PHNX. They haven't produced any IFRS17 figures to date, so future (reserve) profit is not known. Also from a quick scan of their numbers, much of the div seems to be from takeover activity rather than 'real' cash generation in ongoing business.

LGEN has very strong cash generation and has been ahead of the game on producing IFRS17 figures, which to me shows a strength in operations. DYOR

WHilst I understand many of your comments, it is interesting to note that after 10 years of not 'backing themselves' the LGEN mngt seem to have woken up to the market sentiment. This may have some impact going forward on the share price. If you look at the last slide in the Annual Results presentation you finally see an attack about performance of the business not being represented in the share price.

They do a whole page reflecting the different treatment between LGEN & Blackrock. Try taking a look.

If the market treated LGEN price to book like Blackrock we'd have a price twice as high, Price against earnings would be 2.5 x higher. May not happen so quick but mngt need to press their case!

https://group.legalandgeneral.com/media/vecnul4n/fy22-results-slides.pdf

I know much has been said about the risk to LGEN from the LDI near melt down - especially potential fault. The UK Government Actuary has released a report into what happened - these are a few extracts to calm nerves.

'In the case of September gilt yield rises, most schemes would have identified this as a risk but underestimated the potential pace and level of yield rises. This risk will now be mitigated, and the challenge is to identify the next risk'

'The government has the same challenge as trustees, it must balance risk with the perceived return. It’s not possible to remove all risks, but government is uniquely placed to make those assessments and intervene where it believes mitigations must be imposed.

The general shift towards a liability focused approach to investing for UK defined benefit schemes has led to one of the healthiest sets of defined benefit schemes in the world. The challenge some schemes faced with quickly raising collateral LDI could be resolved in several ways that preserves the healthy funding position. This could include more flexibility in the type of assets that can be posted as collateral and how trustees manage their operational risks and stress test.'

A pretty balanced report that praises the longer term effect of LDI investment and doesn't allocate blame to the Investment Managers. For the nerds go to https://actuaries.blog.gov.uk/2022/10/24/liability-driven-investments/

Pension Risk Transfer... A pension fund outsources the risk of paying the underlying pensions to an Insurer

HITS

In a way you're correct, however the D4E didn't lose them money (except on paper) because they took total control of the company. The present share value is irrelevant (to them) because they are looking at a bigger picture and they obviously believe there is a future for AVN that will see them get more value later rather than breaking it up for a 'fire sale' now.

HITS

Just a thought... A year ago the company was owned by the then shareholders - after the D4E the company is owned by the former bond holders without a need to make it go under and have only assets left....

That means the business "turning around" last year would have seen the reward go to the old shareholders, any upturn now will see the bond holders gain both income/interest and capital return

Why would they now lend AVN money - because they win both ways if it succeeds.

This appears to be old news replayed

see https://www.ashfords.co.uk/news-and-events/general/avanti-communications-group-plc-us-bankruptcy-court-enforces-nonconsensual-third-party-releases-in-chapter-15-proceeding from June.

This was part of the D4E

HIS - to answer your question on EBITDA swing....

This resulted in EBITDA of $4.7 million for the six-month period compared to an EBITDA loss of $26.2 million primarily driven by the Government of Indonesia settlement. EBITDA adjusted for the Government of Indonesia bad debt provision and subsequent reversal for the six-month period was $7.8 million loss (2017: $12.3 million loss).

HYLAS 4 was successfully launched by Arianespace on 6 April from French Guyana. After a 90-day stop at 21.5E to bring that slot back into use, HYLAS 4 arrived at its final position at 31.5W in August and is now in service.

From today's update

From today's results:

'Cash flow

The Group has recently signed contracts for new business in excess of $100m and obtained a commitment for an additional $34.5m of debt, which is expected to close within the next month. After closing this facility, the Group may require a modest amount of additional funding over the next year and a half, the amount of which will depend on various operating and strategic developments. Although it is never certain that funds will be available when they are needed, the Group believes it has ample ability to obtain this additional funding from multiple different sources, including but not limited to, sales of additional second lien debt and/or equity. The Group is currently reviewing its plans to raise additional capital in light of these positive material developments and has prepared these interim financial statements under a going concern basis.'

So now you can stop stressing about the company going under this weekend......

AL_17

You ask people to stick to facts... I wish you would follow your own guidance... I have no gripes about comments that accurate - both negative & positive - but as you say accuracy is key.

AVN has signed a 2 year deal at $5M per year with Viasat. You mention this negatively at per Mbps value rather than total. This also means your $2-3M in 2-3 years is inaccurate.

AVN has also collected just over $20M from Indonesia (slightly more than they claimed). This of course affects management accounts not financial accounts (given it was probably accounted in the past).

Of course the position is precarious - no one (except the most blinded) doubts that.

Next you will quote from the documents earlier this year....

"Furthermore, if the Restructuring completes but the Company is unable to raise Additional Funds of at least US$50 million and secure US$40 million infrequently recurring revenue in pipeline by 30 June 2018 then based on the projected cash flows of the Group, the Company will, within the 3 months following 30 June 2018, be highly likely to be unable to pay its creditors, as and when they fall due for payment."

In that documentation AVN also explained the "Additional funds" were available within existing agreements - although this was tied up in the legal jargon. Therefore the company needed to find $40M. Viasat reduces this.

Time will tell on this stock... I think (like several others) it is still BINARY

Buko

No - AVN own 3 slots.

In the recent Trading Update Paul Walsh noted that "I am also pleased to confirm that HYLAS 4 is in excellent health and is currently undergoing in-orbit testing at 21.5E whilst at the same time securing that slot for future business. The satellite will move to its operational position of 33.5W in July." i.e they had extended the life of 21.5E by placing H4 there during testing thereby retaining the right for another 3 years.

H2B & H3 are not AVN satellites (they have part of the payload) are therefore do not give ownership to their slots.

Hope that helps.