Thoughts on JLs March Data + estimated returns

  • Gordon 45
  • 22/10/08 n/a (free)
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Posted: Mon, 09/04/2012 - 17:37

Hi There,

Cover Note to go with thoughts on March 2012 Figures

January returns were low followed by a good February and now March saw a return of £1.019m. If you read my updated estimates that included the 31.1.2012 figures and the relevant data from the JLs 9.1.2012 Progress Report you would see I modified the expected returns to 25% from the KSFIOM loan book, for the months Jan – June 2012, based on the JLs information that the loans due back were heavily weighted towards Nov/Dec 2012. That also meant I then allocated the remaining 75% against July – Dec 2012. Returns for 2013 I left at a 50/50% split. All my data is based on GBP, my apologies to all my DAG Colleagues who invested in other currencies.

I’m now getting 99.098% as a lower estimate in returns by December 2014; based on 89.08% by the JLs from our loan book plus my own thoughts on returns during 2012/2014, and a 79% return on unsecured creditors loans from E&Y (KSFUK).

Still waiting to hear, now about the appeal by Elle McPherson to the Privy Council – the Supreme Appeals court in the IOM re her ‘set off’ situation.

  1. Not sure if our dependence on ‘pulling in cash’ from later years is very relevant from now on. But will show short sharp figures.

· In 2009 approx £48m brought in early from 2010/2016, a return of £13.33%
· In 2010 approx £53.029m brought in early from 2011/2016, a return of between 17.032% and 19.003%.
· In 2011 £40.260m brought in early from 2012/2016, a return of 35.407%.
· In 2012, January/March, £0.698m brought in early from 2013/2014, a return of 2.629% from £26.544m.

  1. In respect of the remaining 10 large loans, I was guessing a figure of around £52m (69.412%) of the remaining £74.915m still due back from the loan book, at end of March 2012.

Still think the 10 large loans split by year is as follows: 7 of the 10 loans are due in 2012, 2 in 2013 and 1 in 2014. But whether the two large loans are included in 2012, or one in 2013 is up for grabs, but would probably think 2012 now. The 10 large loans are still very significant, especially if 7 are due in 2012.

2a. My thoughts on the March 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 (4th draft) has been updated to allow for March 2012. I now get 99.098p/£ return overall. The figure still due for unresolved claims is now £11.880m at end of March and unclaimed still at £1.6m = £13.480m. I have revamped my Table 12 to take full account of all cash received so far up to 31.3.2012. I have revamped 2012 to 2014 to show the new totals due back from loans. I have once again taken note of estimated interest the JLs expect to receive over the balance of the Liquidation. Based on the amount estimated still due of between £0.9m to £1.2m (9.1.2012 Progress Report) and the amount received in January to March of £0.540m I have allocated the high estimate of £1.2m all against Jan- June 2012. And as I cannot differentiate between interest & other income received in the monthly updates, I take all of that as interest. So if I take the receipt of £0.540m up to end of March, off the balance of £1.2m it leaves a balance of £0.660m still to come over the balance of the Liquidation.

We have received 83.2% in returns now. I think we could get between 6.8% and 7.25% by May/end of June 2012, Now that we will be getting at least £22.149m from E&Y (KSFUK) on the 2.5.2012. As at end of March, including the £22.149m from E&Y and allowing for £12.192mcoming off for unresolved/unclaimed and £3.281m coming off for balance of Liquidation costs we would get a dividend of 6.710p/£. That is £0.753m short of 6.8p/£, and if we get that in, in April, we should get 6.8p/£ and that would give us 90% back at that time.

I think based on the, at least, 9p/£ back from E&Y (KSFUK) on 2.5.2012 that there may not be a further dividend from them this year, after the one on 2.5.2012. And that could mean no dividend from our Jls to us (after the 6.8-7.25p/£ by June this year), until June 2013 rather than Dec12/Feb13, but that dividend by the JLs in June 13 could be around 6.4p/£ to us. That would bring our returns up to around 96.40 to 96.85p/£. It all depends on what E&Y get back between May and Dec this year, plus our own JLs. Hopefully the E&Y (KSFUK) ‘6 monthly’ Progress Report due out in early May will clarify their situation.

And I think based on my spreadsheet we could then see a final payout by December 2014 of a further 2.248p/£, which would bring our returns up to 99.098%.

2b. I should perhaps explain here, where my thoughts come from with regard to returns from the KSFIOM loan book. Had a very nice communication from one of our DAG colleagues suggesting that I might be using the wrong figures this year, based on the JLs January 2012 Progress Report. I did reply saying I was happy using my own interpretation of the loan book and supplied some of my figures to him. He did come back to me again, giving lots of data as to where he was coming from and I got the impression that he would be uploading some information on to the DAG for all to see.

The area causing concern I think, surrounds the overall lower and higher estimates still to come from the KSFIOM loan book based on the 9.1.2012 Progress Report, it says that the JLs hope for a lower estimate from the loan book over the Liquidation of 89.08% and a higher estimate of 91.82% (by deduction) – Table on page 7 of the Progress Report shows the following:

· A lower figure still to come of £40.3m, giving an overall return of £370.6m and based on their higher estimate a total of £51.7m still to come giving an overall total of £382.0m.

· Some colleagues have spent some time trying to analyse how the figure still due on the loan book, as per the Progress Report was down graded from £82.56m (page 11 – loans by size band Table) and rightly so, to either the £51.7m or the £40.3m – fairly substantial differences, and a ‘calculator’ was put on to the DAG for anyone who wished, to use that, and try and get answers. Those involved agreed that a pivotal figure of £57.5m, was used they think, to establish the £51.7m and the lower £40.3m shown in the table on page 7 of the Progress Report.
· I did not get involved in the discussions, but attempted to reconcile the differences using my own thoughts, and less analytical approach. In doing that I did get to £57.56m, and came very close to the £51.7m and the £40.3m (without cheating, no point in that). I took into account all aspects of loans still due, again based on the Progress Report – Residential Property £45.15m (London (£23.72m, Other UK £3.84m and Overseas £17.59m), Yachts £21.08m, Portfolio £11.52m, Aircraft £1.46m and Unsecured £3.35m. I also took into account the one aircraft impounded and sold by the JLs (no figure given yet) and the Spanish Property (seized but not yet sold). Also allowed for the current ‘write offs’ of £2.6m, ‘Set off’ at £15.2m and FX Fluctuations at + £15.0m, and have assumed no change in ‘Set off’ and FX Fluctuations over the balance of the Liquidation.

· I then took my expected returns on the KSFIOM loan book over 2012/2014. As at 9.1.2012, there was still £82.56m due between 2012/2014 at 89.08% = £73.544m. I should also say that I expect the ‘set off’ of £15.2m to be virtually negated by the end of the Liquidation by the level of dividends we receive. So, although I could have used my higher figure, by calculation, than the 89.08%, I decided to stay with using the JLs figure, because the margins are now so tight, that I was concerned if I used my higher % that any slight change in figures by the JLs could cause a downward trend on what I currently get – and that is not what it is all about. I may be positive in my thoughts but in no way wish to mislead anyone on the returns we might get. So although I may be wrong, if I am, it is certainly not done intentionally.

· Three other statements given by the JLs also had an influence on me. All are quotes by them from their January Progress Report and can be seen on page 13.

o The “but we note that in general terms the loan portfolio is secured on assets of high quality”

o And re their 70% and 90% basis of returns on remaining loans are “These estimates are based on our view of the market, and taking a prudent position”

o And as at 9.1.2012 “write-offs totalled less than 1% of the original loan portfolio value so we are hopeful of a better outcome than has been used in the projections”.

· So, I feel reasonably happy to use the 89.08% (although my current calculations show higher than that) for returns on loan balances still to come, at this time, for the years 2012/2014. I did say to our colleague, that I would obviously down date my figures as the JLs disclosed any more ‘write offs’ or anything else that might alter my thoughts on dividends. And as said on many occasions now, I am not particularly concerned at being seen to be wrong (with regard to myself), but would not in any way wish to give false hope to any of my DAG colleagues. So from that viewpoint I hope I am right – time will tell.

So, having said the above, my thoughts still allow no gains from ‘Parental Guarantee’, no gains from E&Y’s claim against Kaupthing hf and nothing from litigation. Although we had the 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.

  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.

Also said previously regarding the E&Y (KSFUK) claim although accepted, the Kaupthing hf ‘Winding up Committee’ have only 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.

The last point, I think worth mentioning again, is the split of loans by currency still due at this time. Loans due back in GBP are less than the other currencies put together. GBP £27.213m, the approximate amount in foreign currencies is - USD in equiv GBP equal £13.060m, Euros in equiv GBP is £33.306m, Swiss Francs £2.241m and Canadian Dollars £0.000m, so approx 64.08% in foreign currencies, of which 68.52% is in Euro Loans.

So, having said all of the above, we should still feel good after the March 2012 figures. We have to hope our JLs and E&Y can withstand the ongoing European and World situations and still deliver on their 89.08% from the loan book plus my own thoughts given above, and the 79% of E&Y lower estimations. Let’s see how things ‘pan out’ over 2012. As said above, could be on target to get 99.098p/£ back according to my calculations – but who knows.

As always,

Take Care, and God Bless,

Gordon 45

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KSFUK Declare 10p in £ 2 May 2012

  • Downbutnotout
  • 11/11/08 31/05/09
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To Downbutnotout + all DAG Colleagues

  • Gordon 45
  • 22/10/08 n/a (free)
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  • Wed, 25/04/2012 - 20:45

Hi There Downbutnotout,

Thanks Downbutnotout for the update, most appreciated. 10p/£ is brilliant as it now means £24.61m back from E&Y (KSFUK).

If we take the end of March cash balance from the JLs of £52.364m and add the £24.61m from E&Y = £76.974m. If we assume no increase in JLs net cash total as at 30.4.2012, but also assume no negative overall net figure, this means our gross cash is £76.974m. From that we need to take off that held back for unresolved/unclaimed. I had allowed a total of £12.192m, take that off the gross figure and you get £64.782m. Then take off the balance, I have, to cover the balance of Liquidation costs of £3.281m and you get £61.501m.

If you then take the £905.3m owed to creditors less outstanding owed to unresolved/unclaimed of £13.480m = £891.82m.

Take the 891.82m and x by 6.89% and you get £61.446m.

That means if we have a net figure of £61.501m less £61.446m = a net excess of £0.055m.

So take our current 83.2% and add 6.89% = 90.09p/£ to us. So if my calcs are correct, assuming the above, our JLs should be able to pay out 6.89p/£ as soon as they receive the £24.61m from E&Y (KSFUK) and that would be utterly brilliant for all of us.

Just a wee note of caution, this large 10p/£ payout by E&Y coud mean no further payout by them this year and as such affect a further payout by our JLs to us until June 2013. But we need to wait and see and just thoroughly enjoy reaching 90% at this time.

All the best,

Gordon 45.


Thanks

  • insameboat
  • 12/10/08 31/05/09
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  • Sun, 29/04/2012 - 19:36

As always...thanks Gordon 45


Thanks G45

  • sam
  • 07/12/08 30/09/11
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  • Wed, 25/04/2012 - 22:03

Another speedy and concise update, many thanks.


Thanks G45. I had been

  • anrigaut
  • 19/10/08 30/10/09
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  • Wed, 25/04/2012 - 21:00

Thanks G45. I had been hoping they'd get up to 10p, and thus that we could expect around 7p in the near future (maybe even more if our JLs have managed to gather in more this month). Hopefully there will be an announcement soon, as was promised once the UK dividend was announced.

As you say, beyond that we can only wait and see ...


Belated but many thanks

  • glen07
  • 21/10/08 n/a (free)
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  • Wed, 18/04/2012 - 10:21

Sorry in being so late in thanking you for this heartening assessment of our progress. Thanks again.


thank you Gordon

  • sambururob
  • 10/10/08 n/a (free)
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  • Fri, 13/04/2012 - 18:21

Thank you as always Gordon. Very detailed and still very hopeful from our point of view.
Happy Easter
Rob and Wendy


Thank you Gordon for all

  • peter and louise
  • 18/10/08 01/09/09
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  • Tue, 10/04/2012 - 09:44

Thank you Gordon for all that. All the time and effort you steadfastly continue to put in for the benefit of we laymen is more than merely appreciated. Without your monthly updates and projections on the latest data and figures we'd be left floundering on the impenetrable, foggy periphery of the JLs' and E&Y's offerings. Thank you so much. Best Wishes. Peter and Louise.