Holdings updates – AIK, KBC, AIQ, MEL, GVF,VNL:LN

AIK – They announced another rights issue which I am again more than happy to participate as it is for growth opportunities that they are paying cheap multiples for that offer plenty of synergies.

The valuation we are waiting on that I previously expected could occur in May and show a large increase in NTA, this should occur in June. The listed investment company structure that this still operates by will no doubt change down the track as they now are focused on a core activity rather than being made up of various different investments. If the expected NTA uplift in the short term does not have much impact on the share price (and it probably shouldn’t because anyone doing a tiny bit of research on this stock should be fully aware of it now), then we may have to wait for the change in company structure and the way it reports for the catalyst for a re-rating higher.

KBC – My concern with this situation was if Wilson Asset Management got frustrated with the Bentley blocking stake they may give up on their plans and even exit their holding. Therefore, I was quite pleased to see the latest announcement that their stake has risen from 13% to 15% including some purchases in late May after Bentley grabbed their stake. Hopefully soon something can be worked out to benefit all shareholders. In the meantime, some KBC investments like CSE, PTB, MEL, NAC are doing very well so at least the NTA should head in the right direction when they announce the May 31 NTA in the next couple of weeks. Also CSE & MEL have made strong starts to June.

AIQ – The non-binding agreement and exclusivity period discussions to restructure this investment company have gone past the period end date of May31. They announced on June 2 that discussions though are still continuing and are productive. Hopefully we get a positive announcement in June.

MEL – This was purchased at 5.6 cents late November 2015 when there was around 7.2 cents of cash in the company. The hope was that management may change, a value adding transaction in the oil and gas sector might cause a re-rating of the share price. Alternatively, the company could be wound up and shareholders receive the vast majority of the 7.2 cents in cash back as they may be some wind up costs but after buying at 5.6 cents it would still offer decent returns. We have just had an announcement with management changes and a strong hint that there will not be a major acquisition and money will get returned to shareholders. In the meantime, there does not seem to be much cash leakage which is good. The shares have had a good week and are now 6 cents with decent volume on the bid.

GVF – Reported a strong May NTA result which I flagged on the blog would occur. On the day they announced this, I found it quite interesting that a boring low volatility stock like GVF can close up 4% on more volume than normal on the back of news that was easy to foreshadow. I suppose I was slightly wrong in predicting 1.11 as the NTA but naturally wanted to be conservative. I think it demonstrates opportunities in this LIC space possibly with the shareholder base maybe not as sophisticated and not having the time to do a bit of research. It didn’t take much analysis to realize the NTA may print where it did. Obviously we can’t be precise but given their currency exposures and top 5 holdings they disclose, with asset allocation also it was reasonable to expect he NTA would rise as it did. But it can help your returns greatly if you are willing to do a tiny bit of research because it helps to get a 4% free entry price kicker you would have to admit. As I posted last time many shares were offered at $1 when we knew the NTA would print this high.

VNL:LN – I mentioned this on the blog earlier this year as a strong hold when trading at 61 cents, it is listed on the London AIMS exchange and is exposure to Vietnam property where the NAV was 94 cents and finally beginning to rise. I noted at the time the Vietnam property market had bottomed out in 2015 and also that activists had an impact on this company forcing management fees to be reduced and a realisation program of the assets. Just recently they were able to complete 2 major sales at pretty much the book values so that they were able to make a capital return of 8.76 cents. They recently traded at 63 cents ex this capital return. So from when I mentioned it the shares have returned 17.6% in a few months. I continue to hold.


3 thoughts on “Holdings updates – AIK, KBC, AIQ, MEL, GVF,VNL:LN”

    1. Let me begin by saying I should have written the acquisitions are proposed and non binding so there is not a formal rights issue announcement, sorry for the confusion. As AIK have been busy lately acquiring and managing to close the deals fairly promptly my mind already slipped into the mode that it was a done deal! So if you were wondering if you missed a formal announcement that is not the case. If you are just wondering about the proposal it is within the announcement on May 23. Funding that involves on top of bank finance and issuing shares to vendors, some more equity for the balance. That would be a balance of $11.4 mill through equity, $2 mill per May 25 announcement done to sophisticated investors, so $9.4 mill to go again if the deal goes ahead. Hopefully I have that correct, the current market cap is about $65 mill.

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