mikeh
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Post by mikeh on Aug 16, 2019 13:23:51 GMT
Apparently this has been renamed "SME Credit Realisation Fund Ltd" (SCRF.L)
So perhaps "There is such a thing as bad publicity" after all.
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ashtondav
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Post by ashtondav on Aug 17, 2019 14:56:44 GMT
Are there any views on the impact of the fund liquidating its portfolio. I am wondering if it contributes to the long selling times? Or is the fund in natural wind down and not making sales. And on another point as there are plenty of "unsellable" loans in the portfolio will the fund remain in existence for years and years as loans repay pennies in the piund, or has an exception been made and the fund can sell any damaged loan, deeply discounted, to other institutional investors.
On the IT website I can't recall reading how the "credit realisations" will be made.
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SteveT
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Post by SteveT on Aug 17, 2019 18:42:21 GMT
Are there any views on the impact of the fund liquidating its portfolio. I am wondering if it contributes to the long selling times? Or is the fund in natural wind down and not making sales. And on another point as there are plenty of "unsellable" loans in the portfolio will the fund remain in existence for years and years as loans repay pennies in the piund, or has an exception been made and the fund can sell any damaged loan, deeply discounted, to other institutional investors.
On the IT website I can't recall reading how the "credit realisations" will be made.
The investment trust was like any other FC commercial lender in that it only bought whole loans. Therefore, unless something fundamental has changed in how FC operates, retail lenders will never be offered parts in these loans, either via the PM or SM. The trust owns the loans outright but had a management agreement with FC (which it may now have ended, I’m unsure). My guess is the trust will let performing loans repay as scheduled for the next couple of years whilst reviewing options for selling remaining defaulted loans as a package to a distressed debt player.
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zlb
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Post by zlb on Aug 17, 2019 20:08:09 GMT
I was sent this info, without it being advice, on return of funds. Capital will be returned through quarterly dividends – which may end up being paid out of capital rather than income (not sure who's capital that is).
Quarterly compulsory share redemptions at the prevailing NAV (so at a loss, on the whole, depending on when purchased).
And, "The fund is purchasing some of its own shares in the market, at a share price lower than the share’s NAV. This provides liquidity to shareholders who are willing to sell their shares at less than their NAV, whilst providing an income boost to other shareholders." I don't understand how share holders who haven't sold, get an "income boost" from those who sell at a loss.
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mikeh
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Post by mikeh on Aug 17, 2019 21:22:28 GMT
By buying back shares at a discount to NAV, the company makes a profit, which will get distributed to the remaining shareholders eventually.
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sl75
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Post by sl75 on Aug 19, 2019 7:30:12 GMT
And, "The fund is purchasing some of its own shares in the market, at a share price lower than the share’s NAV. This provides liquidity to shareholders who are willing to sell their shares at less than their NAV, whilst providing an income boost to other shareholders." I don't understand how share holders who haven't sold, get an "income boost" from those who sell at a loss. (illustrative numbers not related to any real company or transaction)
Day 1: company has £100k cash in the bank, and other assets worth £1M for a total of £1.1M, with 1.1M shares in issue. The NAV per share is £1 (100p)
Day 2: as shares are trading at 90p/share despite the NAV/share of 100p/share, company uses most of its free cash to buy 100k of its own shares on the market. This has the effect of removing those shares from the market, equivalent to if those shares hadn't been issued.
Day 3: company has £10k cash in the bank, and other assets worth £1M for a total of £1.01M, with 1M shares in issue. The NAV per share is 101p.
After this illustrative transaction the shareholders who did not sell on the open market can now eventually expect to receive 1% more per share as the asset value is realised, assuming the asset values used in the calculation are realistic.
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zlb
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Post by zlb on Aug 19, 2019 19:19:20 GMT
And, "The fund is purchasing some of its own shares in the market, at a share price lower than the share’s NAV. This provides liquidity to shareholders who are willing to sell their shares at less than their NAV, whilst providing an income boost to other shareholders." I don't understand how share holders who haven't sold, get an "income boost" from those who sell at a loss. (illustrative numbers not related to any real company or transaction)
Day 1: company has £100k cash in the bank, and other assets worth £1M for a total of £1.1M, with 1.1M shares in issue. The NAV per share is £1 (100p)
Day 2: as shares are trading at 90p/share despite the NAV/share of 100p/share, company uses most of its free cash to buy 100k of its own shares on the market. This has the effect of removing those shares from the market, equivalent to if those shares hadn't been issued.
Day 3: company has £10k cash in the bank, and other assets worth £1M for a total of £1.01M, with 1M shares in issue. The NAV per share is 101p.
After this illustrative transaction the shareholders who did not sell on the open market can now eventually expect to receive 1% more per share as the asset value is realised, assuming the asset values used in the calculation are realistic. thank you very much.
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cobi
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Post by cobi on Feb 10, 2020 15:50:30 GMT
As a shareholder of SCRF I am please to read that the board has decided to only sell a small proportion of it's assets at this time. I was worried they might decide to sell at a heavily discounted price. Company Update |
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ashtondav
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Post by ashtondav on Feb 10, 2020 17:01:33 GMT
Hmmmmm, seems like institutions are seeing more value in these loans than many on this forum. I suppose it depends on the discount you can achieve, but nevertheless it will be interesting to see how much they salvage.
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Post by Ace on Feb 10, 2020 17:21:00 GMT
Sounded more like they couldn't offload the loans to institutions as they aren't willing to pay a sufficiently high price to me, I.e. Institutions agree with most on the forum.
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