Investment Trusts realising assets to return to shareholders

Thanks. I will still have a look at Amedeo Air Four Plus (LON:AA4) and agree on the Doric trusts. The leases for the Emirates planes are 2026-2028 and the Thai Airways are 2035. I guess the key will be what happens with Thai Airways coming out of bankruptcy protection. But comforting that some successful hedge funds are amongst the biggest holders.

OldSchool05

13th Aug

Dunedin Enterprise Investment Trust (LON:DNE) looks interesting. They have a decent long term record.

NAV as at 30/6/24: £34.5m, of which cash and net current assets is £26m. Unlisted investments were valued at £8.5m.

Subsequent to 30/6/24; there has been a realisation of £2.6m at NAV, I assume that was part of the above unlisted investments? With proceeds expected before year end.

So, as of now we have NAV of £34.5m of which cash (or near cash) is around £28.6m. Unlisted investments would now be valued at around £6m.

Current market capitalisation is £28.35m. So the remaining unlisted investments are in for nothing.

Charles, do you have a view over the remaining unlisted investments?

Dunedin Enterprise Investment Trust (LON:DNE) - a couple of other comments to improve my understanding of these types of opportunities. The last annual report indicated that the "Company had outstanding commitments to limited partnership funds of £7.6m". Goes on to say the funds are closed, but that there could be a requirement to commit Dunedin Enterprise Investment Trust (LON:DNE) cash in case of follow on investments and management fees etc.

So, there is the chance that some of the cash would need to be reserved here and could not be distributed to shareholders in event of liquidation?

finally, Dunedin Enterprise Investment Trust (LON:DNE) says in latest RNS: "Following completion of the EV realisation the Board intends to send shareholders a proposal for a members' voluntary liquidation of the Company as envisaged in the Chairman's Statement published in March."

In this case, once entered into a voluntary liquidation, would one be able to sell shares in the market? If not, I assume would have to wait until the end of the liquidation process, less liquidator fees etc for any return of capital.

If there are remaining unlisted investments, would be potentially forced to hold these privately (i.e. they would be distributed under the liquidation along with the cash in the Company)?

ken mitchell

I hadn’t realised you were asking about the lease expiry dates in your previous post. An uncertainty is whether that first 2026 lease expiry date for the Emirates planes might get extended. Isn’t Thai a peripheral part of their business. I.e it’s what happens re Emirates planes that really matters. If that first lease date is extended then presumably Amedeo Air Four Plus (LON:AA4) will be able to continue to pay big dividends beyond 2016 too.

Thanks Charles and OldSchool05 for the helpful replies on Dunedin Enterprise Investment Trust (LON:DNE.

Charles Mitchell

OldSchool My understanding is that the remaining assets are liquid and hence the slight increase in the last NAV. The £7.6 commitment has been stated for a bit- never quite understood how that squares with imminent liquidation. I have emailed them in the past and they reply stating that all assets will be returned to shareholders as per.... So I am taking the last NAV as accurate- I bought more shares on the basis.

bullhead

17th Aug

A couple of points regarding

Doric Nimrod Air Three (LON:DNA3)

Will do one at a time

First Doric Nimrod Air Two (LON:DNA2) will be wound up within a year

Aircraft Registration Numbers A6-EDX (01.10.2024), (Lease Expiry Dates) A6-EDY (01.10.2024), A6-EDZ (12.10.2024), A6-EEB (09.11.2024),
A6-EEC (30.11.2024) As the lease expires all will be sold and capital returned through a compulsory redemption which will be spilt into 5 portions one for each aircraft

The last redemptions at the end of last year where at 125p for each aircraft/share

Which is the best guide for future transactions latest survey on aircraft gave a value of 145p which was 20p above last sale and one more divi payment of 4.5p latest share price 124p

For me there is very little downside I bought in the 80p range so will hold till it is wound up don’t think there is much downside for a new investor including remaining divi of 4.5p and sale price of last aircraft would take you to 130p but the easy money has gone

When it comes to Doric Nimrod Air Three (LON:DNA3) Which will be wound up by the end of next year there will be nearly 11p more in dividends plus the sale of the aircraft which if it goes by the sale of Doric Nimrod Air Two (LON:DNA2) and it is a if will be between 48-63p

Giving a return of 59-64 p current share price is 52p again not to much risk on the downside and upside of up to 20%

Amedeo Air Four Plus (LON:AA4) planes leases run out on

4/9/26, 3/11/26, 3/8/27, 27/11/27, 19/2/28 13/4/28

For the A380s

And 28/7/ 28. 15/8/28

For the B777 s

Emirates have announced they are refurbishing 4 of AA4 A380 s and one of the B777 so would be surprised if they are not looking at either buying or extending the lease on these

https://www.aa4plus.gg/wp-cont...

Thailand airways is looking to list again in mid 2025 so it will become clearer then how the value in the aircraft leased to them are valued

There will be a minimum of 8 more payments of 2p each before the first lease expires at least 16p the most on a share price of 48p think this one has the most upside but because of the time involved the most risk too

Personally I think as the leases expire the planes will be sold and money will be returned through redemptions the same as with DNA2/3

18th Aug

Thanks for the three really helpful posts on Doric Nimrod Air Three (LON:DNA3) Doric Nimrod Air Two (LON:DNA2) and Amedeo Air Four Plus (LON:AA4) bullhead.

Obvious conclusion on all 3 is that the best gains have gone and for those belatedly looking to buy now the risk/reward is finely balanced and there are probably better alternatives elsewhere now. A Quick Look at the 5 year charts for all three shows what great buys they were as they started to recover from the lows, at sometimes half or better than the current prices and that’s even before the big dividends on top. e.g Anyone who bought Amedeo Air Four Plus (LON:AA4) around those lows is guaranteed a profit just from the dividends.

I wouldn’t be a buyer of Amedeo Air Four Plus (LON:AA4) at the current 48p share price but would have been (but for already holding from 34p) at the 40p and 20% dividend available a few months ago.

Yeah I got lucky on the 3 of them there is an argument that the best is behind them and you certainly won’t make the returns that where available

There is some upside in Doric Nimrod Air Three (LON:DNA3) going by the sale of the aircraft from Doric Nimrod Air Two (LON:DNA2) stock but 20% upside would be it for just over a year I guess

Personally still think Amedeo Air Four Plus (LON:AA4) is worth a look it’s still at a big discount with a reduced yield but still at nearly 17% unlikely it will see any redemptions before 2026 though so at least a couple of years but personally I would be disappointed if I got less than the current price per share at redemption plus the dividends in between but that is just my view

Like you say there is risk in both to the downside

will be interesting to see what price Doric Nimrod Air Two (LON:DNA2) sells its aircraft for

Agree with all that bullhead. One thing we haven’t covered is the distinct possibility that second hand prices for the A380s will hold up well thanks to Boeing’s current woes.

21st Aug

Yes totally agree there is no replacement for the A380 and Boeing still seems to be having problems

US FAA requires inspections of Boeing 787 planes following mid-air dive - https://www.reuters.com/busine...

The sale price achieved by Doric Nimrod Air Two (LON:DNA2) for the sale of its last 5 A380s gives a good guide to the value of the A380s held by Doric Nimrod Air Three (LON:DNA3) andAmedeo Air Four Plus (LON:AA4) and Emirates future plans for them

https://newsfile.refinitiv.com...

Brucie5

27th Aug

I hold VSL, having sold at a loss and then returned in the hope that it's oversold. Just look at the figures on AIC, including the 38% discount to NAV and 18% dividend. Fair to say it's been a disaster for long term holders, but looks now like deep value?

VPC Specialty Lending Investments | The AIC

AcornInvestor

29th Aug

Note that the net assets per share are stated before the outstanding commitments to the remaining PE funds. If Dunedin Enterprise Investment Trust (LON:DNE) needs to retain cash (of £7.6m) to meet those commitments then funds available for distribution initially/"now" (ignoring the just announced dividend) equate to 382pps by my calcs and then you'd need to wait for the realisations from the remaining funds before receiving the balance of the net assets - timing and quantum for which are uncertain.

Acorn-as I understand it they are hoping to resolve my year end. I am not sure your calculation of Assets is correct though-= I had a much higher figure. Would have to look into it again but I have it on a current discount of 15% to Net Assets.

VSL dividend declaration accompanied by a statement about future reduced payments consequent on "reduction to NAV as a consequence to the B-Shares issued to shareholders on 19 April 2024 and redeemed on 25 April 2024.". All rather difficult to get hold of, except the share price has effectively not budged this morning while finding itself almost exactly where it was at the nadir of 2020.

As the strategy continues to be one returning assets to shareholders the dividend will continue to decline "although as an investment company dividends will represent a distribution of no less than 85% of gross income."

I now hold at 2.2% of the Bruciefolio.

Tim Boucher

Agree, difficult to get hold of the exact impact, but 'materially lower levels of income' leaves the door open for significant dividend cuts in the future. I guess this makes sense if the higher income portion of the assets are liquidated first; we'll find out in time, but in a way there is alot of room to fall below the 18% divi and still be a decent yield.

I also hold (a small toe in the water!).

"The Board notes that, as previously described, changes to the portfolio composition as debt positions are repaid or restructured are resulting in materially lower levels of income at a portfolio level which will be reflected in what is likely to be a substantial reduction in the dividend in future periods"

Investment Trusts realising assets to return to shareholders

Unlock the rest of this article with a 14 day trial

About the Author

Charles Mitchell

44 comments

Unlock the metrics for all these stocks and more...

Unlock the metrics for all these stocks and more...