Some Thoughts on the SL's '6 Monthly Progress Report (9.1.2016)
Hi Folks, attached are my thoughts on the SL's Report.
Some thoughts on the SL’s ‘6 Monthly’ Progress Report (9.1.2016).
Having read the latest report I now detail my thoughts on it below. This post contains what I think are the main points in the January 2016 Progress Report. Again I could have missed points or disregarded some points that are important to others. Slightly more info on the PG but to me disappointing regarding info on the remaining 4 loans and the ‘Unresolved’.
I will now amend my December 2015 information to include info from this Report where appropriate, in readiness for the SL’s March 2016 quarterly update.
Page 6/7 & 11 – Dividends & Dividend Range – It is all about interest now as we received 100% of our capital back. Based on current cash balances and hoped for future returns from the KSFIOM Loan book the SL expects to pay some interest on claims in respect of each class of interest. A further £1.2 – £2.1m is hoped for from the remaining £8.6m outstanding from the loan book.
Any more returns will be by way of interest we have lost. Creditors entitled to contractual interest in excess of 5% would receive the amount due in excess of 5% up to the 8.10.2008. Around £3.5m required for this.
Creditors not entitled to contractual interest would receive 4% on amounts owed up to 8.10.2008. The amount required for this would be small.
Once the above two steps have been completed all creditors will have received interest entitlements up to 8.10.2008. In respect of further interest payments, SL still awaits word from the IOMC re directions on the calculation methodology – no reply back so far. A Court case was due on 28.1.2016 that could affect us. Not sure if it has taken place. So we still await a decision on our situation.
Note, it is intended that one further dividend will be paid to creditors in respect of each class of interest. Timing and amount will depend on realisation of remaining assets. To me that means Loan Book, PG, 'Unresolved' and Litigation.
We can expect a further ‘6 monthly’ update dated 9.7.2016 (Page 6).
Returns from KSFIOM loan book are currently 94.3% (page 2) – estimated returns have moved up from previous 93.92% - 94.61% (by deduction) to between 94.6% - 94.8% (by deduction), (Page 7 chart).
Loan book, page 13 shows £8.6m still due. SL again showing the remaining loans in GBP, Euros, and Swiss Francs – the last USD loan was finalised during the Oct-Dec 2015 period. In currency terms loans due are in Euros £4.8m (55.8%), GBP £1.3m (15.1%) and Swiss Francs £2.5m (29.0%).
‘Write – offs’ now £12.6m (3.028%) - very low. SL has to ‘call in’ the remaining 4 loans and close the loan book off thus finalising ‘Write-offs’. No more cash in from loans would mean an end figure of around 5.096% loss on the loan book. That would be a fantastic achievement by the SL.
Remaining Loans – pages 11/12 – 4 loans still due at £8.6m. Hopefully these loans will be finalised shortly.
Page 15 re Unresolved & Unclaimed. SL now showing £2.5m Unresolved and £1.5m Unclaimed. Keep hoping SL will finalise ‘Unresolved’ claims now. ‘Unclaimed’ has to wait until the end of the Liquidation Process.
Page 15 – To assist Life Companies and their Policyholders, the SL approached and received approval from the IOMC to accept assignments from Life Companies on behalf of their Policyholders without the need for a costly Court Order. Hopefully this will help lower or stop ongoing charges taken by Life Companies from their Policyholders.
Page 14 – Parental Guarantee – Kaupthing hf has agreed a ‘Composition’ agreement with its Creditors ratified by the Icelandic Court. Entitlements under the ‘Composition’ consist of a cash payment of ISK 4,600,000 plus for every ISK 10,000 of claim -
· A cash payment of ISK 830, converted into Euro plus
· Convertible Notes of ISK 2,120, plus
· Shares of ISK 50 in KHF
Can’t say I understand the above so copied it verbatim from the Progress Report. Our claim against Kaupthing hf under the Parental Guarantee has not yet been agreed with the WuC. Kaupthing hf has applied to the IOMC to have the ‘Composition’ recognised in the IOM. SL is taking steps to ensure that the interests of the Company and its Creditors are not disadvantaged as a result of this development. Also once the claim has been agreed it is possible that it will be sold rather than held until the conclusion of the Icelandic Insolvency Process.
Page 14 - Investigation – This is in relation to the Bank’s Directors re the ‘winding up order’. A report on the investigation and potential follow up actions was put to the COI on 12th November 2010. End of story as SL cannot disclose any more due to risk of prejudicing further proceedings – we await what happens next or does not happen next – so no change yet again.
Pages 8 & 16 - Liquidation costs – Page 8 total paid so far inc VAT is £25.509m, might go up to £26.5m. Total on Page 16 does not include VAT - a spend of £24.1m compared to the previously estimated overall total of £24.3m. SL states in this Report he could no longer estimate future costs for the Liquidation. Worth noting if no more cash comes in, that cash balance we hold at present will go down as future costs are paid out. Although the SL is obviously hopeful that slightly more cash will come in from the loan book.
So, good news regarding the PG and the loan book, and the SL is hopeful there will be an end to the Liquidation within the next 12 months. But as SL says it is difficult to predict due to the uncertainty of recovery from balance of loans and the resolution of the PG.
The continuing down bits are;
· PG still not finalised
· 4 Loans not finalised - £8.6m
· Still balance of £2.5m Unresolved – to be resolved + £1.5m Unclaimed.
· The Investigation into the circumstances leading up to the Directors decision to seek a winding up order in respect of KSFIOM – no further forward
The above are the comments I felt were worth making. Other people may have others that I have missed, or I felt not important enough to mention. I will update parts of my background data in readiness for the SL’s Quarterly Update due at end of March 2016. Based on the current cash total of £13.704m I think there is now £9.7m net available for payments. This takes no account of further costs/expenses.
Hopefully the SL can sell on the PG position (we appear to be another slight step forward towards that), but in the meantime he has to deal urgently with the remnant loan book situation, the ‘Unresolved and come to a conclusion re any Litigation.
But again, have to say hopefully, things are still moving forwards in this last phase of the Liquidation.
And God Bless