Some thoughts on the JLs Nov figures
Cover Note to go with thoughts on November 2012 Figures
January to November figures saw a return of £36.040m. There was a net movement in November of £1.344m, and actual returns so far are 70.159%. Based on the JLs weighting factor towards loans coming back in December, we need a net £15.329m back in December to reach a 91% return for the year. So need to wait and see and hope. All my data is based on GBP, my apologies to all my DAG Colleagues who invested in other currencies.
Keep saying the ongoing situation within the Euro Zone including Spain could have a further detrimental effect on our eventual dividends. Spanish Property took another large hit, and around 50% of our property loans were from overseas clients as at the JLs July 2012 Progress Report update. Based on the split by currency, almost 73% of loans still due, come from USD, Euros and Swiss Francs. And within that 73%, Euros account for 62.475%. In essence loans in Euros account for circa 45.088% of all loans outstanding. That suggests to me anyway, that overseas properties are mainly in the Euro Zone, and possibly in Spain. I did a recalc on my thoughts in April 2012, on expected returns overall from the Liquidation based on the updated Euro Zone situation, and now update that every month.
Now getting 99.577% as a lower estimate in returns by December 2014; based on 90.79% by the JLs from our loan book plus my own thoughts on returns during 2012/2014, and a now 84.0% return on unsecured creditors loans from E&Y (KSFUK). All allowed for in my figures and Table 12, 12th Draft.
We are still waiting to hear, about the final appeal by Elle McPherson and date of the appeal by the Privy Council.
- Figures for cash ‘pulled in’ early from 2013/2014 is £8.916m (33.589%), based on a figure of £26.544m.
In respect of the remaining 10 large loans, I’m now guessing - based on my loans spreadsheet – 6 loans covered by at least ‘4 loan arrangements’ giving a figure of around £37.874m (80.442%) of the remaining £47.082m still due back from the loan book, at end of November 2012. Based on answers to previous questions asked of the JLs it became apparent that the £27.82m, (based on the JLs Progress Report of 9.7.12) now covers ‘two loan arrangements’ both with more than one loan. And one of these two arrangements contains the balance of £6.529m (the one loan still due in 2014). The loans within these ‘two loan arrangements’ also cover different repayment dates, different currencies and different repayment profiles. So in my view, it is not about two very large loans within the 24 still to come, but, the fact that this information lessens the chance of defaults occurring within the £27.82m that originally appeared to cover the two largest loans. So repayment of these ‘two loan arrangements’ obviously covers from 2012-2014.
2a. My thoughts on the November figures and updates on estimates are all contained in the attachment with this cover note – again to try and retain the format of the layout. My Table 12 (12th draft) has been updated to allow for November 2012 Data.
The figure due for unresolved claims is I think £11.200m at end of November and unclaimed still at £1.5m = £12.700m. I have also revamped my Table 12 to take full account of all cash received so far up to 30.11.2012 and I have revamped balance of 2012 to 2014 to show the new totals due back from loans.
2b. I had taken note of estimated interest the JLs expected to receive of between £0.5m and £0.7m in the Progress Report 9.7.2012) over the balance of the Liquidation. I allocated the entire higher estimate of £0.7m against July/Dec 2012. By the end of October we had received back the £0.7m, so the £0.1m received in November is a straight gain in returns, as would any more interest in Dec, prior to any updates shown within the January 2013 Progress Report from the Jls.
Due to the ‘back loading’ of cash due back for 2012 from KSFIOM loan book until December, I’m saying there is no chance of a 5% return from our JLs until between February/June 2013 now (assuming the JLs want to wait until they can pay out 5p/£). I think we have around 2.853p/£ available to payout as at 30.11.2012. If we get 5.98p/£ between Feb/June 2013, that would bring us up to 96.98%, this also assumes the Euro Zone situation and the impact in Spain, including property, does not have any more dramatic effect on our situation. E&Y (KSFUK) did raise their return estimates in their 7.10.2012 Progress Report and now show a lower estimate of 84.0% based on £246.1m and a new higher estimate of 86.5%.
If we get a dividend around February/June 2013 of 5p/£, I think based on my spreadsheet we could then see another final payout by December 2014 of a further 2.597p/£, which would bring our returns up to 99.577%.
So, having said the above, my thoughts still allow no gains from ‘Parental Guarantee’, (perhaps even slightly worse looking now, based on COI Minutes of 13.7.2012- Point 4). The E&Y (KSFUK Progress Report dated 7.10.2012 does hope for some form of info from the Kaupthing WuC by Dec this year (now in December), both on timing and level of returns – lets hope so. Still see nothing from litigation. So I see no point in including hoped for cash back at this point.
As said, I will ignore any return from ‘Parental Guarantee’ until JLs give definite figures on what to expect on any return from Iceland. If we get a definitive answer I will then update my Tables to include some form of return and timespan involved. Until then we should ignore it totally.
My latest figure at end of November, of cash held back to cover the unresolved/unclaimed and balance of cash for liquidation costs is £12.700m + £1.684m (note, I have added another £1.7m to allow for Liquidation costs, as I feel the JLs total of £23.3m is now too low. So £1.7m + £1.684m = £3.384m. Therefore £12.700m + £3.384m = £16.084m. The JLs cash figure in hand at end of November is £41.546m. I had asked the JLs again if it is the ‘Lighthouse/Elle McPherson situation that is holding up further movement in the unresolved claims. Still no real answer yet to my question.
The JLs said in August monthly data that expenses should be ‘significantly lower’ now, as last of Bank staff gone, moved out of premises and the smaller number of loans to manage. Even so I do not think the £1.684m allowed for will cover the balance of costs. See above. So I have moved my thoughts back up to £25m to cover Liquidation costs. Costs in October and November 2012 seem to be really low, but I still think there is a back payment of around £775k to pay PwC. Also JLs still showing costs and back payments under one total – so hard to know the exact figure.
So, having said all of the above, we have 91% back as at 15.6.2012. Hopefully our JLs and E&Y can withstand the Euro Zone and World situations and still deliver on their 90.79% from the loan book and the 84.0% of E&Y lower estimations. But let’s see how things continue to ‘pan out’ in December, the Progress Report in January (probably issued late Jan/early Feb) and early 2013. As said above, could still be on target to get 99.577p/£ back, according to my updated calculations – but who knows.
Take Care, and God Bless,
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