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Tejoori is an AIM listed investment company. Its current market cap is $2.6m. It has a a book value of $26.8m USD.

It has little debt, reasonably low fees and cash and Wakala deposits of $3.6m USD – far in excess of the current market cap.

To the handful of you who may not know what a Wakala deposit is – under Sharia law charging interest is haram or forbidden. Therefore to make an investment Sharia compliant one needs to invest in something with a guaranteed return. The company is not classing Wakalas as cash but for my purposes I believe they are close to being cash.

Their main non cash investment is land on the Arjan project in Dubai. They recon (via an independent valuer) that this is worth $15.1m. Personally I doubt it – but as the Market cap is only $2.6m I dont care. They were going to invest in the Lagoons project in Dubai – you may remember they were going to build artificial islands in the shape of the world. As we are no longer in the world of $150 oil they decided against it and did a deal to get this plot instead. It appears they were lucky to get out – they sold in October 2008 for $12.6m. As a result they have a receivable for $3.7m – they hold collateral against this apparently valued in excess of the value of the receivable.

The company also holds an investment in Bekon holdings – a firm which specialises in producing a biogas plants to produce electricity and fertilizer. The investment has not gone to plan. They have been diluted. Still it is apprently worth $4.5m USD. I can’t really verify this either as it is a privately held company.

In the past they invested in a car safety improvement device – unsurprisingly they lost money.

The company has always had reputable auditors – KPMG / PWC. The auditors are locally based so will be aware of any quirks of Islamic finance.

The shareholder base is not well disclosed by the company. As far as I am aware there is no controlling shareholder. Best information I have is that about 50% of the shareholding is dispersed amongst a group of Arab gentlemen, the rest is unknown.

The cash expenses here are £300k a year – it will take 10 years for the company’s cash to be dispersed at this rate.

There is a wind up vote every 2 years in the articles. I believe this is the most likely exit. With this gap to NAV its a no-brainer. The company also has the right to buy back shares – seems likely to generate a better return than any investments these guys are likely to make…

Risks are fraud, some more ridiculous auto safety investments or more inertia. The biggest risk is probably a delisting – volume here is miniscule.

I have put a small amount in here and we will see what happens.

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