Good news on Tejoori – they are delisting and returning cash.
There is something of a hurdle to be reached as they need 75% of shareholders to vote in favour of delisting in order to get the cash back. Cash is worth about $0.63 a share – less delisting / liquidation costs.
Though the spread is quoted as $0.47-0.52 you can actually buy at 0.5 in reasonable size.
There is some risk involved – it is possible that shareholders (mostly through inertia/ complacency) won’t vote for the delisting. After that they are holding another vote which will then formally liquidate the company. This isn’t how I have observed this usually being done – and there is the risk that post delisting bad things could happen to your money. I suspect this explains the gap in the price between likely liquidation value and current price. I also think the unusual way of liquidating may be down to Sharia compliance – they need to keep out of interest bearing accounts….
Not voting is insane – if we dont get the 75% vote the share price will halve or worse so make sure you vote now….
I have picked more up and now it’s 19% of my portfolio. On a portfolio level I do have something of a problem – with TJI and RMA both having paid out cash by January 2018 I will have a cash position of 40% of the portfolio – far too high – so now more than ever I am in need of good ideas….
As ever thoughts / comments appreciated.
Deep Value Investments Blog 
I sold my small holding here at 52 cents for a 50% profit.
My concern here is how “quick” the payout is likely to be? I’ve been waiting over a year for the payout from the Antrim Energy liquidation. Apparently tax certificates have to be signed off before shareholers can receive their funds. I’ve no idea what’s involved for liquidating a Dubai-based company.
Interesting – didn’t consider that… I will google but its probably a case of pay your money take your chance….
Hi — could you elaborate on your sharia compliance comment? How is changing the sequence in the voting of delisting and liquidation alter sharia compliance? I am also holding Tejoori, but I am unconfortable holding a delisted company and being at the mercy of management. If it takes time to liquidation, that’s okay, but I am more worried about un-kosher things to happen here.
Well,
This is was a hypothesis – I guess to show sharia compliance every stage needs to be compliant from holding the money in TJI’s accounts through to the account TJI pays it through before it gets to the client. If this means clearers / others in chain need to be compliant it creates problems.
I looked into this further after posting this – and it is all in line with the proper way of liquidating a company in Dubai.
Way I look at it is there is a very good percentage chance of a 20% profit and also a chance of a 100% loss. How much am I comfortable losing ?
If its a 90% chance of a 20% win and 10% chance of 100% loss
Kelly criterion says bet 77% portfolio – I am way below that at 20 but I may increase….
http://www.albionresearch.com/kelly/default.php
May be of interest///
Thanks for your thoughts. I also did a calculation backing out the “market-implied” probability of a proper liquidation, about 2/3 according to my numbers. This seems low — so probably a good gamble.
How do you calculate market implied probability? I spoke to the company and the final NAV will be about the value of the cash less liquidation costs so c$0.63 – all debt has been paid.
The market has consistently mispriced this risk – at one point you could buy it for $0.05!
I assumed that in case of a smooth liquidation we get about 0.6 (probably a bit more given your numbers) and in case there are problems with the liquidation (which encompasses a whole specter including full loss) about 0.25. Given the market price I can then calculate the risk-neutral probability of smooth liquidation.
HI Rob- Have you had your money from Tejoori as yet? I had it down as due by mid April 2018 but there is no sign of it from my brokers, HSBC. I have chased Nabila at Tejoori today and will pass on his comments when I get them. Best wishes. Steve
Hi Steve,
Your broker needed to fill in a form to receive the money. I suggest you are better off chasing your broker. I havent received it yet but I blame my broker not the liquidator.
Best
Rob
Thanks Rob- I will chase them. It could be that TJI arent that quick too! Cheers. Steve
Its not TJI any more – liquidator has the money.
Ah- KPMG then- Thanks again. Steve
Has anyone received payment yet? I was told by KPMG to expect the cash by today.
No Payment received by me. Spoke to stockbroker was told it was due to be paid at latest today should be received 3-5 days…. We will see….
Haven’t received anything either. But that’s probably my shitty German broker.
Hi guys- My money is in now- wef 18/5/18. I got 44.4p per share btw. Cheers. Steve
received $.0.58962 per share
Good.. Still waiting on my broker
Received $0.5975 per share today.
Good, I got some of mine too….
I can’t believe it, just called my broker (SBroker). They told me to wait and they basically have no clue.
They need to fill out a form or ask custodian. I have similar problems with one broker.
Finally received EUR 0.383054 per share. Luckily I sold most of my shares before they delisted.
Your broker has likely made a mistake 0.383054 EUR is 0.45 USD. Everyone else seems to be getting close to 0.58 USD or 0.59 or 0.50 EUR.
My broker also made a mistake – I would chase it up ASAP. Selling pre delisting probably cost you money.