Table No. 7 - latest dividends estimate still 16 dividend points with 6 zeros

  • Gordon 45
  • 22/10/08 n/a (free)
  • a depositor
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Posted: Thu, 14/01/2010 - 12:58

Hi folks,

Just read Brabander's excellent write up and spreadsheet - excellent. I did another update in late Dec 2009, my Table No. 7 that took account of the JLs data of 11.12.2009. I held it back hoping to chat with one of the JLs re my 42 questions. Hoping that will take place to-morrow but the new data issued yesterday will affect my figures as might any info from the JL so posting my stuff just now to keep continuity and will update to Table 8 over the next few days. Just want to say a big thanks to Icecrusher who kindly spent a lot of time reading my write up and making it more understandable for all of you - thanks mate.

Table No. 7 - Latest Dividends Estimate after receipt of JLs’ data issued on 11.12.2009. Waiting or answers to 42 questions. Still full of guestimates. Still 16 dividend points with 6 zeros Mr Simpson?

Hi Everyone,
I have revamped my Table No.6 to try and determine what we might expect based on the latest (but limited) information from the JLs.
The JLs’ did not see fit to advise us of the ‘Cash in Hand’ immediately before the 2nd dividend, and other than the figures given in their Dividend Table, they have not divulged its value. The amount shown in the Table indicates that creditors are now owed around £954.5M - way above anything mentioned before. On the same Table, Dividend 1 is valued at £236.67m, but the data issued on the 11.12.2009 ‘Cash position as at 30.11.2009' the 1st Dividend is given as £191,462,286 – a difference of £45.21M. In my list of 42 questions this is number one.

Table No.7 uses information from various documents issued by the JLs. On occasion I have used one or more of their figures, and at other times I have used my own interpretation. If your views differ from mine that's fine, but please be assured that what I show is what I honestly believe right now and I've done this for myself as well as providing information to all creditors of KSFIoM as we move forward in this long drawn-out process of getting our cash back.

I agree with Roman 2005, thesunnysouth, Yorkist, Brabander and Icecrusher that cash was held back to cover claims not yet submitted when the 1st Dividend was issued. I also agree that cash was held back to cover part, if not all, of the Habana in-flight claimants pending their appeal; this has been confirmed by the JLs but not the amount, and I hope to discuss this and my other questions with them soon. The changes reflected in Table No. 7 cover these situations; this table is more complex as I retain the previous data, but also add new information – I hope you can understand the gist of my endeavours!
1.
a. Calculating the Cash-in hand. Because the JLs continue to provide us with incomplete information, my Table No.6 uses ‘compensating figures’ to reach agreement with the JLs data. The Jls cash-in-hand figure for 30.9.2009 was £206.7m and on 2.11.2009, £238.0m. To agree with these amounts I entered a first ‘compensating figure’ of £88.404m (the difference between my figure of £118.404 and their £206.700m) and a second ‘compensating figure’ of £31.300m which was used to bring their £206.700m up to the £238.00m given on 2.11.2009. I did this because it was impossible to ‘break down’ the information available to determine from where these figures originated. The data issued by the JLs on 11.12.2009 goes some way I think, to covering these differences, however there are repercussions due to an inability to reconcile exactly where the JLs got this cash (£88.404m plus £31.300m) = £119.704m.

b. Considering the £88.404m: In my new Table 7, the 1st Dividend payment is £191.463m compared to my earlier guestimate of £225.014m given in Table 6 – a difference of £33.551m. This affects the ‘running total’ shown in column 5, so instead of adding £88.404m to my £347.7m it means adding the lesser difference of £54.853m – thus lowering the ‘running total’ of receipts in column 5 from £436.104 given in Table 6 to £402.553m in Table 7. This affects the overall returns at this point by (£33.551m x £8.98m) = 3.74p /£. The returns in Table 6 are therefore reduced from 92.11p /£ to 88.37p/£. Additional returns based on later information may offset this decrease, but I repeat myself by saying that any guestimate is based on information available at the time and I was a little concerned at reaching a total of 92.11p in Table 6.
With the information given by the JLs on 11.12.2009 (incomplete and appearing contradictory) it is still possible to fill in part of the gap in the ‘compensating figures' that I've used in Table 7 (the £54.853m and £31.300m) totalling £86.153m.
Looking at the data given on the 11.12.209 (and other information since July 2009) the following information is found which I believe goes some way to account for this total of £86.153m:
· The figure should include the Foreign Currency Exchange gains £18.600m
· KSFIOM capital from loan book returned earlier than expected £26.400m
· The £78.6m capital repaid by 30.11.09 at variance (I get £75.7m) so diff: £2.900m
· KSFIOM interest from loan book returned earlier than expected £ 6.140m
· Capital for 2009 as of 31.10.09 = £28m - schedule for Dec only 3.2m, so: £23.632m
· TOTAL £77.672m
If my guess is correct, it would mean a shortfall in my calcs of just (£86.153 - £77.672) = £8.481m, but we await confirmation from the Jls.
If I am wrong re the net £23.632m from the loan book this would mean another shortfall of that amount.

c. Considering the the KSFIOM Loan Book: Mike Simpson stated that nearly all of the loans were interest-only, which inferred to me at least that based on the 'split by year' that the JLs would not get any capital returned until the given year. But, based upon the information given on 11.12.2009, both capital and interest have been returned in this last year which the JLs had previously marked against future years. I.e. 2010, 2011, 2012, 2013, 2014. This implies two things:

i. That there has been a ‘heavier weighting’ on receiving capital and interest earlier than we expected; this is good for us in getting the cash back more quickly, but it also affects the calculations: what we have already received cannot be given again in accordance with Mike Simpson’s original and subsequent schedules. I previously used this data for my calculations, but have now been obliged to amend them. This is seen in Table 7 where the capital and interest we expected to receive is lower than originally shown.

ii. Having stated that the JLs now expect a return on the KSFIOM loan book of at least 83.92% I have always allowed for a return of 80% - so there is a small gain to be had there. To achieve a final total return of 93.76%, we need a 100% return on the loan book of £417.8m which is highly improbable, but we can see that the JLs are showing a return as at the end of December 2009 of £82.1m (almost 20% in the first year).

d. Regarding the interest we might expect on the loan book: I anticipated 80%, but from the JLs Dividend Schedule as at December 2009 they expect at least 95.6% (£28.20m). This seems quite high, but when you consider that interest returned by the end of 2009 provides a figure of £16m, then if they achieve a similar percentage return over 2010 and 2011, that would leave only £3m to come back between 2012 and 2016, which would be great.
· So, the increase to 83.92% on the KSFIOM loan book means an increase from £334.40m (80%) to £350.78 (83.92%), an increase of £16.38m.
· The JLs appear to expect a return of 95.6% based on the figures shown in the data released on 11.12.2009; this means an increase from my anticipated sum of £23.6m (80%) to £28.09m (95.6%) a difference of £4.49m.
· There is still the £10.9m ‘set off’ to mention. It appears nowhere in the cash transactions that I can see, but It is possible that information issued by the JLs on the 10.11.2009 gives some insight into loan book claims compared with the original data issued on 22.7.2009 as follows:
· The £1.654m owed to preferential creditors and the £907.315 owed to unsecured creditors (total of £908.969m) was shown to have reduced to £898m - a difference of £10.969m. Could this be due to the £10.9m shown at 30.11.2009 as ‘set off’? If so, have the JLs chosen to spread this figure over the capital returns due over the remaining years? (2010 to 2016) rather than lower the cash received by £10.9m?

e. Considering KSFUK: The JLs now apear to be saying that a 60% return on the unsecured loans equals £233.5m (from data issued on the 11.12.2009 referencing the KSFUK update sheet, bottom right hand figure). I used £205m in my Table 6, but the JLS also show on the Dividend Schedule of 11.12.2009 a finishing total of £137.4m, which indicates a starting sum of £229m (100%) and I have used this figure at present. This means an extra £14.4m over what I used in Table 6. So we gain £16.38m + £4.49M + £14.4m = £35.27m thus offsetting the figures I used in Table 6 (based on previous info from the JLS).
Cannot be sure if the increase in unsecured loans to KSFUK from £205M to £229m (or £233.5m) is due to the JLs agreeing with E&Y to include the balance due from the collateral shares situation of £11.84m (my figures) + £1.47m (guestimate) from the £147m in ‘trust’ within this £229m (or £233.5m). Table 7 still shows this balancing shares + ‘trust’ issue as separate items, but if they are now lumped together it would mean reducing my new 91.19p in the £ by (£13.31m x £8.98m) = 1.482p = 89.708p /£.
Deducting my 'compensating' figure of £8.481m from the returns total (£8.481m/8.98m) = 0.944p /£ results in a net return of 89.708p - 0.944 = 88.764p/£ as a final return.
Deducting the further part 'compensating' figure of £23.632m from the returns total (£23.632m/8.98m) = 2.632p/£ results in a net return of 88.764p – 2.632p = 86.132p/£ as a final return.

2.
a. To end on a brighter note, although I do not see us getting 100% back on the KSFIOM loan book capital I would say the following: I have shown a write down of £2.6m as per the JLs data in their 11.12.2009 information (loan book). I also took off a further £5.770m based on the 4 loans ‘causing concern’ in the JLs COI minutes of 5.11.2009, my guestimate. But if you add the £2.6m + £5.770m = £8.37m to let’s say £82.19m (the returns in 2009) then that extrapolates to approx 5 times that over the loans still due and would therefore equal approx 5 times £8.37m = £41.85m, some 10% of the loan book. So perhaps it's fair to say that we might expect a 90% return on the loan book, which would be £376.02 as against £350.79m = gain of £25.23m. This equates to 2.809p. And would raise the 86.132p to 88.941p, but this is pure conjecture on my part.

b. To add to this brighter tone, and considering KSFUK, I have conservatively refrained from going above the 60% lower limit given out by E&Y - as have the JLs. But as I said partly in jest many months ago, the excess value of the KSFIOM loan book over the sum owed ro creditors was 7%. In comparison the excess value in the KSFUK loan book was 23%. I also said at that time that if we could expect a recovery of 80% from KSFIOM then surely we could expect at least 75% to 80% from KSFUK as the loan books appeared very similar in the types of loans given out – property, planes and yachts and shares. Albeit the KSFUK Bank was 5 times larger. So if we could expect a return of 75% on say £229m that would mean an extra £34.35m and an extra £45.8m on an 80% return. These two figures would mean an extra 3.825p/£ or an extra 5.100p/£. If we dare add the 3.825p to the 88.941p = 92.766p/£. Or if you add the 5.100p to the 88.941p = 94.041p/£ as a final return. But please note, I could be so wrong here, it is pure, pure conjecture.

c. This takes no cognisance of ‘Parental Guarantee’. I think the JLs will have put in a claim of around £300m including interest, but who knows. If we assume this goes down to 6% of £898m this would mean £53.88m plus interest of I think around £90m based on an initial £898m decreasing down to the £53.88m. Again pure guess work. So that would give a total of £144.88m and if you then take figures that were banded about many months ago of perhaps 20% of 25% from the ‘Parental guarantee’ that would mean £144.88m x 25% = £36.22m x 20% = £7.244 x 100 divided by £898m = 0.806p/£. That would give a final dividend of 94.014 + 0.806 = 94.847p/£.
So in conclusion, if we were to be getting anywhere near this kind of return, it is time that the Life Company Reps on the COI were reporting back to their companies and the other 8 to 10 companies to come forth and make up the difference along with the IOMGovernment to ensure we are guaranteed 100% (based on JLs figures), and give us that now, not in 2016/2017. If we assume again a total of around 90% without this help that would mean we would be 10% short or £89.8m short. So if the life companies gave in a payment of £45m and the IOM Government did the same we could get our 100% recovery. What they should agree to, is to put up this money in right now, so that by around 2011/2012 we have all received our 100% based on JLs figures. They could put in writing that when that stage is reached any surplus would be distributed amongst those who put up the £90m until all their input is repaid, if that stage is reached. And then, only then would any further surplus be distributed amongst the creditors in a pro rata basis with regard to any further interest owed. Is that too much to ask? They should remember that by agreeing to and doing this, they would safe face, save Brand image, save the IOM Financial Sector and would if worded properly save any litigation against them – surely points to ponder?

So to all of you including the JLs, the 4 reps from DST - PPD/HNWD and the Life Companies on the COI get moving and start lobbying earnestly to get things finalised Now.
Once again God bless to all,

Gordon 45

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