Table No.8 - 82.5p to 92.17p/£ - am I on the right Track now Mr Simpson?

Table No. 8 – 82.5p to 92.17p/£ - Am I on the right track now Mr Simpson? Latest Dividends Estimate after receipt of JLs’ data issued on 11.12.2009, 13.1.2010, 21.1.2010 & 22.1.2010. We have more info but not sufficient. Still full of guestimates. Still 16 dividend points but now with 7 zeros.

Hi Everyone,
My latest Table No.8 now shows a final return of between 82.5p and 92.17p/£, almost identical to that of the JLS. Sadly as I get more information to use or deduce from, my final estimates keep dropping. Now that I appear to be almost exactly in line with the JLS estimates (with no fiddling on my part), I just wondered if Mike Simpson wil be convinced that he should talk to me to fill in the remaining areas of concern that I have, in order to do a very accurate Table using the exact figures, so that we can all see how it might ‘pan out’.

In this write up I do show a section on questions I asked one of the JL’s and the answers received – small snippets gained. I have also done a separate list of questions in another post on the DAG Chat based on what I have done in an attempt to get more answers. This list of questions does contain some re costs. This post will be to Glen07, and hopefully she will pass them on to our 4 reps on the COI in order that they might put them forward to the JLs. Or perhaps if we are lucky enough they may be able to answer some of those questions without referral to the JLS or the COI Committee, either directly to myself or on the DAG.

Anyway before discussing questions already raised with one of the JL’s on 14.1.2009, or info on my latest table No.8, some major points as I see it to start with.

1 Unbelivable that Parental guarantee knocked back. It is said it was signed off by someone who was not on the Kaupthing hf Board- it beggars belief. My own view as said previously that any returns would be small, around £7.7m, but every penny counts. The JLs have appealed, and if it is lost they will have to weigh up the consequences of : cost of litigation aganst chances of winning the case.

1. As stated on the JLs statement of 26.1.2010 re the possible sale of balance of KSFUK loan book. A figure has been mentioned elsewhere of £2b GBP balance in loan book. The sale of this balance could have a massive effect on our returns. If sold off at a discount, will it be below 60% and therefore affect our current lower JLs estimated returns of 82.88%? Or above 60% but below the high 75% possible return from KSFUK and therefore affect our JLs current high estimate of 93.76%?

I personally had hoped the KSFUK loan book would replicate the KSFIOM loan book that has estimated returns of between 87.2% and 100%. I would suggest if the KSFUK loan book is sold off, it might hasten returns back to KSFIOM and therefore us, but I do think it will affect adversely, the level of returns back to KSFIOM/us.

1. Another post on the Dag by Expat/Glen 07 concerns the claim by the Tchenguiz Bros against Kaupthing hf for £2.26b GBP. This could affect all of us dependent upon their success and also the value of the claim by KSFUK against Kaupthing hf, and the eventual return if any KSFUK gets re their parental guarantee claim, and therefore any subsequent return to KSFIOM and then us. From what I can gather KSFUK is owed £895m from Kaupthing hf and KSFUK’s assets totaled £8.128m. so £895m is substantial.

2. Now some points that affect table 8 from answers received to questions put to one of the JL’s.

a) Agreed they held back cash in issuing 1st dividend to cover unclaimed creditors, unresolved creditors & Habana. Total of around £40m+. This is confirmed in the JLs data issued on 11.12.2009 I.e. £236.67m as against the £191.462m in cash statement. Also confirmed in the staement issued on 21.1.2010 (£75m) held back presumably at 2nd dividend.

b) No interest held back in favour of Habana claimants.

c) JL said they also held back cash due for Preferred Creditors. Also confirmed in statement of 21.1.2010.

d) The £10.9mfor ‘set off’ - I asked if this had been ‘set off’ against loans due before 1st dividend paid out on 4.9.2009. Reply was that would only be the case if ‘set off’ had been agreed prior to 1st dividend, but did not really know.

e) Could not comment on FX fluctuations of £9.3m in Aug 09 to £18.5m in later update.

f) I asked if ‘write down’ of £2.6m had been allowed for so far. JL said ‘write down’ would be taken off at a later date.

g) I asked if the 4 ‘material movements’ as at 2.11.2009 were included within the two ‘cash in Hand’ totals shown in COI minutes of 5.11.09 – answer yes.

h) The £70m from collateral/repo shares was included within the total prior to the 2nd dividend, and the balance of £28.05m (now £31m) will be available for the 3rd dividend, if it is not before June 2010 and presuming no claims come forward against this cash before then.

i) I asked if the JLs were taking the ‘high’ return on the KSFIOM loan book at 100%, as that is what it appeared to be taken in the 11.12.2009 update – dividend statement I.e. £417.8m. JL said this would not be so, said there must be other things in there like the FX gains and or interest back from loan book. I did say I could understand the FX gains being in there but that the return of interest was shown in a different line within the Dividend statement given out by the JLs on 11.12.2009.

j) I also asked re the very high return of interest on the loan book by end of Dec2009. Shown as £16mout of around £29m, yet returns on loan book approx £88m out of £418m for the same period. JL said the interest returns were very lumpy, not an even pattern at all.

k) KSFIOM V KSFUK – No real answer re the figure of £229m versus £233.5m unsecured loans.

l) Collateral/Repo shares – Company A, already dealt with in returns we have received back.

m) The other two lots of shares in Icelandic companies – JLs think they will be valueless.

n) CDs – I feel we have received back £53.7m (£18.2m + £35.5m). Jl said no only £35.5m. I still feel it is £53.7m based on figure in 22.7.2009 statement of £18.2m returned prior to 26.5.2009.Then a further £35.5m received as per COI minutes of 5.11.2009. ‘Movements since 31.7.2009’ included £35.5m for CDs.

o) I also asked if any more cash was due back from Collateral/Repo shares – Answer was NO.

p) I did ask if JLs had moved £23.632m back for return from 2009 to 2010 in the KSFIOM loan book. Answer – it appears logical.

q) There was also, as I thought the movement forward of £12m from 2016 to 2013. did not aske re this as it seemed pointless to do so based on previous answer.But this is the case if you check out the Loan book data given out on 11.12.2009.,

r) I also asked re the apparent repayments within the KSFIOM loan book of £48.018m from the years 2010-2016 to 2009. The reply was that the JLs had moved capital repayments around and that they had discussed the repositioning of loans with clients and that they had managed to get some loans returned early. But there was no agreement on my suggested £48.018m.

s) I then asked if all costs shown in Cash Position on 30.11.2009 (showing costs up to 30.9.2009) had been paid and taken off prior to ‘Cash in Hand’ total £229,352,724.73 as at 30.11.2009. I was shocked to to be told not necessarily so. So I said , surely the 1st Dividend total, Bank staff costs, rent, legal, professional feesetc are off. The answer was – only those that had to be paid. I.e. Bank staff, some others will not have been paid.
The JLs fees had not yet been paid. Makes it hard to work out accurate figures based on these most unexpected unknowns.

I have done a separate list of questions to Glen 07 including a number on costs. It will be posted at the same time as this and Table N.8.

1. Now some comments on my latest Table – No.8

a) Firstly my final dividend recovery in Table No.8 is 82.50%. Would have been exactly the same as the JLs 82.88% except I took the last £3.446m that I took initially for Dividend number 16, exactly 0.38p and changed it to allow for higher costs for Liquidators, bank staff etc. See question No.12 in my list of questions. And I can say that I did not try to ‘pockle’ figures to achieve this total. If you have done these types of Excel spreadsheet tables, you do not know what your final payment will be until you reach that last point.

b) If we take the higher level of estimatesfor the KSFIOMloan book we would add £52.064m + £1.3mfor ncreased Interest returns +a further £34.350mex KSFUK if we reach a 75% return on £229m from them. This gives a total of£87.7125m x 100then divide by £907m = 9.67p/£. Add this to to the 82.50p = 92.17p/£ as against the JLS 93.76P/£. Hopefully I am now on the ‘right track’ as my figures and those of the JLs are now very close.

c) The re-evaluation of the KSFIOM loan book by the JLs in the statement issued on 13.1.2010 up to 31.12.2009 does have an effect on the frequency and value of future dividends in my opinion.

d) It appears to me that the JLs are not using the same method of giving us data I.e. value of 1st & 2nd Dividends. 1st Dividend £236.67m and another figure of £191.462m =Difference of £45.208m. This was , as found out subsequently, as cash held back to cover unclaimed, unresolved and Habana. 2nd Dividend of £145.1m, to me anyway did not allow for the unclaimed, unresolved + Habana. I managed to work out a figure that brings my figures to within 0.2% of the 24.8% (45.208m) held back by the JLs. But no way can I get anywhere near holding back anything within the £145.1m for unclaimed, unresolved plus Habana. Yet we are informed that £75m was held back in info given out on 21.1.2010. All we need is clarity and for the JLs to use the same method of reporting on every occasion.

e) In my Table No.7 I had wrongly guessed that the JLs did pay out Habana claimants at 24.8%. I took off the £12m for unclaimed from the £908mand wrongly ignored the unresolved amount of £82m. I then again assumed a 15.2% payout for Habana in the 2nd dividend, again wrong. What the JLs have done as can now be seen from the £75m retained (statement of 21.1.2010), that this was retained for unclaimed, unresolved and Habana + other in flight Transfers(I think). If you take the £45.208m and the £75m retained for creditors it means that the total due to these unpaid claimants is between £182.29m/£187.5m. That is why my Table No.8 shows £91.837m retained (equal now to 49% for unpaid creditors. I have assumed an 9p payout in the 3rd dividend = 49%).

So, question is, if the £12m unclaimed, the £82m not resolved and the £70m Habana = £164m. Is it the other in flight transfers that acount for the differences of between £18-£23m to get to the £182.29m/£187.5m?

f. The returns shown in my Table8 for all of us shows this: We have 40% back as at Dec 2009, I think we will now get the following based on knowns, estimates and guestimates, 52.5% (2010), 69.5% (2011), 79.5% (2012) and 82.5% by 2013. Nothing in 2014, 2015 or 2016, as we now need the last balance of £3.446m at end of 2016 to help with the eventual costs of the liquidation.

g. The other 9.67p/£ if it becomes available due to higher returns from KSFIOM loan book and KSFUK loan book would would be added over the various payments to reach , I think, 92.17p/£. Again probably between 2010 and 2013.

Conclusion.

So Table No.8 is again a mixture of fact, guestimate and estimate on my part. But I feel we are getting nearer to how the JLs have reached their estimates, but we are breaking it down into more detail as it affects us. They show 82.88% - 93.76%, I now get 82.5% to 92.17%, almost the same.

There is almost no variance between the £827.925m cash back in my Table 8 and my payment of £712.768m to creditors. To this we need to add the £91.875m back payments to the unclaimed/unresolved/Habana/plus any others + £21.282m for Liquidators costs = £ 825.925m. Giving a variance of £2m.

So feel the biggest area of concern is the £164m the JLS said there was; £12m unclaimed, £82m unresolved and £70m Habana. But if you expand the £45.210m held back at 1st Dividend you get £182.29m and if you expand the £75m held back presumably at 2nd Dividend you get £187.50m so gap of between 18-£23m from the £164m.

am doing my best there is still somethings amiss in what I am doing. Anyway Table 8 is how I see it at present, and I hope the covering info, the new list of questions, the data on costings will help to give the best picture I can to all at present.

I’m hoping the JLs will talk to me further, plus continue to give out data on a monthly basis as they have done on 11.12.2009 and again to a degree on 13.1.2010. and give a more detailed update every quarter, as per that given on 11.12.2009.

Again,

God bless to all,

Gordon 45