Some Thoughts on the nov fig + return estimates

  • Gordon 45
  • 22/10/08 n/a (free)
  • a depositor
  • Offline
Posted: Tue, 13/12/2011 - 22:07

Hi Folks,

Cover Note to go with thoughts on November 2011 Figures

Great year including October, followed by a poor November. But returns this year still average of £12.476m per month – Excellent by any standards. All my data is based on GBP, my apologies to all my DAG Colleagues who invested in other currencies.

I’m now getting 96.60% as a lower estimate in returns by December 2014; based on 84.83% from our loan book and a 79% return on unsecured creditors loans from E&Y (KSFUK). The slight increase of 0.05p/£ from October, is I think, due to two factors. One, I had allowed for £85.536m for the 6th dividend in my Table11 as against the actual £85.1m by the JLs. This meant I understated the cash available by £0.436m. Secondly I down date interest still due over the Liquidation (based on the July 2011 Progress Report) with the amount received each month. The interest received in November met the amount still due and left a plus balance of £0.204m. The result is, if you add the £0.436m, and the £0.204m = £0.640m, multiply that by 100 and divide by £905m (amount owed to unsecured creditors) you get 0.07p/£. That would have resulted in a new lower estimate of 96.62p/£. When I updated my Table 11 with all the Nov data I get £96.60p/£. So don’t think I’ll worry over a 0.02p/£ difference in my calcs. Just hope my lower estimate of 96.60p/£ comes to fruition.

Still waiting to hear, like the rest of you whether Elle McPherson does or does not appeal to the Supreme Court re her ‘set off’ situation (have a question in to the JLs on this).

  1. Again re our dependence so far on ‘pulling in cash’ from later years to subsidise shortfalls as occurred in 2009 and 2010.

· In 2009 approx £48m was brought in early from later years I.e. 2010/2016, giving a return of £13.33%
· In 2010 approx £53.029m was brought in early from later years I.e. 2011/2016, giving a return of between 17.032% and 19.003%.
· So for 2011 the picture regarding bringing in cash from later years looks like this – the JLs have already brought back £39.615m (34.840%) by November, thus well surpassing the percentage of that achieved in 2009 and 2010.
· The JLs have brought back in overall £137.247m in 11 months Inc £39.615m from later years. Note, the £137.247m includes the cash in early from later years and all interest received in this year. I think it is most unlikely we will get £114.573m back from the £135.062m due back from loans in 2011 alone, unless the largest loan comes back in December. We did get back, surprisingly, £16.6m last December. But I think we could see a total of at least £30m being pushed back from 2011 into 2012. Having said that I still feel the JLs have had a very good year bringing cash back in and way above 2009 & 2010 both in Percentage and value terms.

  1. In respect of the 10 large original loans and the latest set of large loans we can see probably a figure of around £90m plus (81%) of the remaining £111.270m still due back from the loan book. Unfortunately no update from the JLs yet.

· Until we get some form of update from the JLs, I think the split of the 10 large loans, based on current values of loans still due back as at 31.10.2011 is: 3(2011), 4 (2012), 2 (2013) and 1 (2014). Have sent questions off to the JLs requesting an update on the split by year.

· The July 2011 Progress Report updated by the July figures showed the following: 1 loan >£10m, 7 loans between £5-£10m, 28 loans between £1-5m and 26 <£1m = 62 loans worth £140.843m. I think the 2 loans repaid in August both fell into the £1-5m category. 2 loans repaid in September, again I think in the £1-£5m range with the ‘set off’ loan in the £0-1m category. I’m guessing the 4 loans repaid in October fell into the £1-5m category. So we have 53 loans outstanding/partially outstanding. There were no loans totally repaid in November. Again questions asked of the JLs in relation to the 10 large loans, had hoped for answers before now – but keep hoping.

· The 10 large loans are now very significant, as we can no longer depend on high early returns from later years, only a total of circa £27m due back between 2013/2014, based on the Nov figures update. And we know the £7.74m due back in 2014 is 1 loan (a large loan at that). So even at an early return of around 30% would only yield £8.1m - not a lot.

· The 10 large loans still total around £90m. Right now circa £90m out of £111.270m = 81% of the £111.270m. So if we see up to circa £30m being pushed back into 2012 that would see around £77m to come back next year less any further early returns this year. Say it ends up at £77m we would then need 84.83% of £77m, less, let's say early returns next year of the circa £8.1m = £68.9m at 84.83% = almost £58.45m out of the £77m = 75.91%. And note we only have £21.27m due back from the smaller loans, so the one very large loan left and the other 7 loans of between £5-10m will have a very significant part to play on us getting our 5% next year or 11% over the next 18months.

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 11 has been updated to allow for the November figures. I now get 96.60p/£ return overall. The figure still due for unresolved claims is still £12.4m at end of Nov (I think) and unclaimed at £1.6m = £14.0m. Await answers to questions to update unresolved/unclaimed further. I have revamped my Table 11 to take full account of all cash received so far up to 30.11.2011 and down dated what is still due in 2011 (based on 84.83%) on receipts so far. Also revamped down what is still due in value from following years based on excellent recoveries so far this year. Also revamped interest downward that was still due in 2011, 2012, 2013 and 2014, based on July Progress Report and interest returns since then. All interest due, over the balance of the Liquidation based on the July 2007 Progress Report is now in. Which is good for us, as it means any interest brought back in, in December will not be counterbalanced by me taking off interest due from later years. But we await the next Progress Report in January and that is sure to show some form of estimated interest by the JLs over the balance of the Liquidation, from that point onwards. So come the January data from the JLs I would think I will once again be off setting interest gained in January 2012 by interest due from that point onwards until the end of the Liquidation – hope you can follow what I was trying to explain.

We have received 83.2% in returns now. Still think we might get another 5p/£ next June, but appear slightly short, according to my estimates, for a further dividend in December 2012. If that is the case we could get a 6p/£ return by June 2013 giving us a return overall of around 94.2%. Followed by a further end dividend of 2.40p/£ by December 2014. But this is all based on the JLs & E&Y’s lower estimates of 84.83% and 79% being reached. Also depends on my data being accurate as it currently shows a lower return of 96.60p/£ against the JLs 93.0%. And my thoughts still allow no gains from ‘Parental Guarantee’, no gains from E&Y’s claim against Kaupthing hf and nothing from litigation. Although there has been more news re Kaupthing hf and the other Icelandic Banks re repayments to all depositors, no one is sure what it all means to us, so I see no point in including hoped for cash back at this point. Must also take note of the current Euro Zone and World situation, as it appears the UK is on its’ own against most of the other 26 Euro Zone Countries.

  1. 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.

Regarding the E&Y (KSFUK) claim against Kaupthing hf. Their claim although accepted, it appears the Kaupthing hf ‘Winding up Committee’ have agreed a claim of around £288m out of the £695m net claimed by E&Y. It is not a preferred claim, so it is an unsecured claim and therefore could be a return of only around 25%, and 25% of £288m = £72m. Taken in the context of unsecured creditors of KSFUK being in the region of £4.7bn would mean in the region of an additional 0.4p/£ to us.

And as said the ever-worsening situation in the financial world including the frightening Euro Zone situation could cause us further problems – we wait and hope.

So, having said the above, we should stay buoyant even after the November figures. We have to hope our JLs and E&Y can withstand the worsening European and World situations and still deliver on their 84.83% and 79% lower estimations. Lets see how things continue in December and then through next year (2012). As said above, on target to get 96.60p/£ back according to my calculations – but who knows.

As always,

Take Care, and God Bless,

Gordon 45

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