15225 replies to this topic

[DayTraderDad]

Hi DtD,

I have a question to your NAV calc. How do you calculate your NAV of 2.2 Euro.

Lets say MF gets Equity Accounted for they would have to deconsolidate MF. MF has assets worth 3 Billion and Liabilities of 4 Billion according to the latest MF presentation. That would give the Holding company 1 Billion Equity. Now they need to book the asset as investment in associates. Here I dont know which vaöue one would book in MF. Cost price? Free cash flow valuation? No idea haha.
Thirdly the holding company can book the loans to MF as an asset of 3 Billion. In total that would have an effect of 4 Billion or 1 Euro per share. How do u get to 2.2 euro? Could you please explain?

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Hi Andi222,

I am glad you asked because I am no accountant so let me explain how I got there and you can correct me:

SNH has impaired the full amount they paid for MF so I did not take into account the assets because they have been written off.
I removed all the debt from the SNH books that's basically what I did.

Maybe you can post the correct figures I just felt one cannot deduct the assets twice.

That why would be great if you and Captain can put something together.

[andi222]

Hi IN sounds like you had a nice braai!!! Hahaha well I had a nice braai with lots of green beer!!

Well that is a interesting scenario but again they would have to pay CW over R2.45 because that was the average he bought in September 2018.

PIC and CW still big holders why would they sell their shares to get them back with a company with less money because do believe cash is not
something that SNH is full off???

I have been thinking why the share dropped to this level and I think found the answer and that is if you take the balance sheet of H1 2018 and
adjusted to the latest FY 2019 I land up with a NAV for shareholders of E0.13 or about R2.08 which if one takes into account the impairments to
come for Conforama alone will take the Nav to where the price is now E0.094 ot R1.46.
So my take Mr Market already taking in the bad new for FY 2018.
The good news however is if you take the MF out of the balance sheet due to equity reporting things change considerably in two possibilities:
1 - Is all the debt is taken over by MF and SNH is free then NAV should jump to around E2.20
2 - Is the debt is taken to the MF balance sheet but SNH still responsible i.e. MF has to pay SNH and SNH has to pay the creditors then Nav is
about E1.0 or R16.06
If one takes then Conforama also to be reported as equity then NAV jumps up by another (about) 0.38 so my guess with rough calculation looking
at a NAV for FY2019 of E1.37 or R22.

Please note the figures are my calculations and as I am not an accountant waiting on accountants to confirm my thoughts!!

Hi DtD,

I have a question to your NAV calc. How do you calculate your NAV of 2.2 Euro.

Lets say MF gets Equity Accounted for they would have to deconsolidate MF. MF has assets worth 3 Billion and Liabilities of 4 Billion according to the latest MF presentation. That would give the Holding company 1 Billion Equity. Now they need to book the asset as investment in associates. Here I dont know which vaöue one would book in MF. Cost price? Free cash flow valuation? No idea haha.
Thirdly the holding company can book the loans to MF as an asset of 3 Billion. In total that would have an effect of 4 Billion or 1 Euro per share. How do u get to 2.2 euro? Could you please explain?

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[Investment novice]

Hey DTD,

If anything, given that LUA and CVA are in an advanced stage, it should actually give far more credence to the survival possibility of Steinhoff. The real insiders (Lenders) who have their money where their mouth is, understand the impact of a successful lawsuit, but have chosen to still pursue the LUA and CVA. (I hope that I am not jinxing it with these comments).

Regarding the control aspect of the assets, Steinhoff and the Lenders have created a special Litigation Committee that looks at all aspect regarding the lawsuits. Steinhoff would not even have met the litigants if the Lenders had not already given their go ahead.

Ordinary Shareholders claims are indeed subordinate to the lenders (including Preference Share shareholders). If fact, ordinary shareholders are the residual holders of assets/equity in a company.

Regarding the long time period. Indeed, this is why lawsuits take so long. The loss is determined on a factual basis. However, there are many variables that go into the "facts". If the share price recovers the shareholders are pruned accordingly.

My guess is that this will be played out as long as possible to allow the share price to recover. It may even get to Court multiple times before Steinhoff settles. The long duration allows the business to restructure.

All of the above in my opinion...

Regards
Captainfrom82

The share recovery will be based on legal settlement and as we in catch 22..unlikely to have a settlement without breaking bank... But a settlement will ensure the share price rallies... So do you settle on a future rally which cannot be predicted..
Despite the multiple claims... Going to expect snh management to manage them all with the same brush.... There is also no liquidity available to settle claimants and hence an equity play is going to be a more likely scenario.... The equity needs to be resuscitated....

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[Investment novice]

Thanks for the info. And for the constructive discussions...

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[DayTraderDad]

I will rather call that a BLIMP and not a jump.
hahah

Haha yes agree for SNH its a small blimp of 5.5%

[Chris101]

Cannot see volumes but share jumped from 1.45 to 1.53 now pulled back to 1.52

I will rather call that a BLIMP and not a jump.

hahah

[DayTraderDad]

Where did you see that. What was volume of trade and quantum of jump.... I only get to see delayed trades.... Bloomberg... Down 1%

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Cannot see volumes but share jumped from 1.45 to 1.53 now pulled back to 1.52

[Investment novice]

Where did you see that. What was volume of trade and quantum of jump.... I only get to see delayed trades.... Bloomberg... Down 1%

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[DayTraderDad]

I think some news coming sudden jump!!!

[DayTraderDad]

Thank you much appreciated Captain.

[Captainfrom82]

Hi Captain,

Now I am a little confused, the creditors are taking all the risk to ensure they get their money back in three years time them comes VEB and
the rest simply wanting money and creditor just look on?

If this is the case then SNH will never get to implement the CVA/LUA restructure.

On the other hand to my understanding the creditor control the assets so how will they allow SNH to sell assets to pay the likes of VEB?

Surely shareholder claims fall behind creditors claims?

I think this will go on for many years because there is no way SNH can payout R48 per share to shareholders!!

So how much will the claim be if in 6 to 8 years the share is again R50.

Would the claim be variable pending share price? Imagine a claim against a share price of R2 and then it get to R20 the VEB crowd would enjoy double profits!!!

Regards,
DTD

 

Hey DTD,

 

If anything, given that LUA and CVA are in an advanced stage, it should actually give far more credence to the survival possibility of Steinhoff.  The real insiders (Lenders) who have their money where their mouth is, understand the impact of a successful lawsuit, but have chosen to still pursue the LUA and CVA.  (I hope that I am not jinxing it with these comments).

 

Regarding the control aspect of the assets, Steinhoff and the Lenders have created a special Litigation Committee that looks at all aspect regarding the lawsuits.  Steinhoff would not even have met the litigants if the Lenders had not already given their go ahead.

 

Ordinary Shareholders claims are indeed subordinate to the lenders (including Preference Share shareholders).  If fact, ordinary shareholders are the residual holders of assets/equity in a company.

 

Regarding the long time period.  Indeed, this is why lawsuits take so long.  The loss is determined on a factual basis.  However, there are many variables that go into the "facts".  If the share price recovers the shareholders are pruned accordingly.

 

My guess is that this will be played out as long as possible to allow the share price to recover.  It may even get to Court multiple times before Steinhoff settles.  The long duration allows the business to restructure.

 

All of the above in my opinion...

 

Regards

Captainfrom82

[DayTraderDad]

A good article on delisting:

https://www.fin24.co...stings-20181107

Highlights:

The process of delisting

With a delisting, there is a process that has to be followed and that starts with the initial cautionary.

Companies then need to announce the proposed price at which the delisting will happen and then shareholders will get to vote.

Importantly, the proposed price will be linked to the share price in the month or three before the announcement.

Net asset value will have no bearing on the delisting price.

The process requires an independent board to consider if the proposal is fair – most often this independent board does just that.
Existing shareholders are then able to vote on the proposed delisting.

If enough vote against the proposal, the delisting is either void or needs court approval, depending on the percentage of shareholders who voted against the deal.

Most often the delisting gets the required votes, especially as the price of the delisting is usually at a premium to the existing share price before the announcement.

So shareholders are able to make a quick 20% or so, albeit the longer term potential profits may have been much greater.

Assuming the vote passes, shareholders will then be paid out into their trading accounts with details of the relevant dates being announced on Sens.

[Captainfrom82]

It is unlikely that the lawyers will be aiming to maximize the settlement. Veb is Jon profit. Secondly the price variances are determined by sentiment. And lastly... Expecting fair and full settlement requires this entity to declare bankruptcy and all then lose and shareholders m... Claimants will end with very little or nothing due to insurmountable debt and bond holders.... That have preference.

The legal settlement will be novel and will factor the regain in value post settlement. And this can only truly be done with a delisting. With a listing this is very risky for claimants and snh. But doable.... What won't be on the cards is 120 billion Rand settlement... And we looking at 2 billion.... However with a delisting... Shares to a value of 40 billion may be allocated.. Ahead of an ipo....

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Hi IN,

 

Your various posts regarding the Steinhoff de-listing refers.  IMHO while it is possible, it is not plausible.

 

This is REALLY taking me back some years to my Corporate Governance and Listing Requirements studies, but at the top of my head...

 

It is not a simple matter of de-listing.a company.  Although the Directors take this decision in their executive capacity (the right) to take such a decision, the process that needs to be followed would tip off the ordinary shareholders well in advance, and completely decimate the share price.

 

The Board would need to convene a meeting of the shareholders seeking approval for the de-listing. 

 

The company would have to make an offer to buy out the minority shareholders who do not want to hold onto an unlisted company shares.

 

The needs to be a vote.  You guys would know better than I do what is the thresholds for the JSE delisting.

 

Regards

Captainfrom82

[DayTraderDad]

Shortics.com
‏

@Shortics_com
2m2 minutes ago
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0.53% of STEINHOFF INTERNATIONAL HOLDINGS NV (DE) is now shorted by MARSHALL WACE LLP. #steinhoffinternationalholdingsnv

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[Investment novice]

Hi Captain,

Now I am a little confused, the creditors are taking all the risk to ensure they get their money back in three years time them comes VEB and
the rest simply wanting money and creditor just look on?

If this is the case then SNH will never get to implement the CVA/LUA restructure.

On the other hand to my understanding the creditor control the assets so how will they allow SNH to sell assets to pay the likes of VEB?

Surely shareholder claims fall behind creditors claims?

I think this will go on for many years because there is no way SNH can payout R48 per share to shareholders!!

So how much will the claim be if in 6 to 8 years the share is again R50.

Would the claim be variable pending share price? Imagine a claim against a share price of R2 and then it get to R20 the VEB crowd would enjoy double profits!!!

Regards,
DTD

Exactly my pint.. This is going to require a novel solution.... With share revaluation

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[DayTraderDad]

Hey DTD & IN,
 
DTD, It is an interesting point that you make regarding the traders.  For that matter a trader who traded 10x in the same day for the same volume of shares, if he started the day and ended the day with no Steinhoff shares, will actually have inflated the share volumes, but should be excluded from the claims.
 
IN you say ..."Expecting fair and full settlement requires this entity to declare bankruptcy and all then lose and shareholders m... Claimants will end with very little or nothing due to insurmountable debt and bond holders.... That have preference."
 
CF82: I have been advised that if VEB wins their lawsuit,  then their claims will not be subordinate to the lenders.  In other words they will rank similarly to the creditors .
 
Best Regards
Captainfrom82

Hi Captain,

Now I am a little confused, the creditors are taking all the risk to ensure they get their money back in three years time them comes VEB and
the rest simply wanting money and creditor just look on?

If this is the case then SNH will never get to implement the CVA/LUA restructure.

On the other hand to my understanding the creditor control the assets so how will they allow SNH to sell assets to pay the likes of VEB?

Surely shareholder claims fall behind creditors claims?

I think this will go on for many years because there is no way SNH can payout R48 per share to shareholders!!

So how much will the claim be if in 6 to 8 years the share is again R50.

Would the claim be variable pending share price? Imagine a claim against a share price of R2 and then it get to R20 the VEB crowd would enjoy double profits!!!

Regards,
DTD

[Captainfrom82]

Hi Captain,

Yes I agree there were a lot of trading and could well be day trader buying and selling.
What I am saying if the entities that held the 1.9 bil share and did not sell them would only have a claim from R25 and the rest of the shares 4.3.1.9= 2.4 bil
basically 56 % would have a claim at R50 and the other 44% have a claim at R25.( assuming the 44% was long term holders)

It is all a guess and quite sure a long calculation will take place but to simple take the number of share and multiply R50 and say that is the claim dont think its correct.
Obviously VEB and other would like to go for the big numbers but Peter Wakkie seen this before so he will be well prepared.

Regards,
DTD

 

Hey DTD & IN,

 

DTD, It is an interesting point that you make regarding the traders.  For that matter a trader who traded 10x in the same day for the same volume of shares, if he started the day and ended the day with no Steinhoff shares, will actually have inflated the share volumes, but should be excluded from the claims.

 

IN you say ..."Expecting fair and full settlement requires this entity to declare bankruptcy and all then lose and shareholders m... Claimants will end with very little or nothing due to insurmountable debt and bond holders.... That have preference."

 

CF82: I have been advised that if VEB wins their lawsuit,  then their claims will not be subordinate to the lenders.  In other words they will rank similarly to the creditors .

 

Best Regards

Captainfrom82

[Milo]

Hi Captain,

Here I don't agree people bought SNH at their own risk and had they done the due diligence would have sold the share.
I was invested in SNH in the 2012 and 2013. I decided to get out because did not trust the accounts and did not believe that MJ had a miraculous
way of turning business around plus very complicated set of financials and I could detect they were not making the cash.

Even the purchase of MF should have put alarms into experts heads but they choose to ignore.

If you listened to the Utube video a posted that comments

"So do you think SNH is hot or not" and the reply of analyst " Hahah at these level its cheap"

Now that the truth comes out people want cover!!

Sorry when one buys a share he takes with him the possible future profits but also the risk of a full on loss!!

Regards,
DTD

 

 

Yes exactly people were following the news and business commentators on TV and the crowds and made a decision based on that... They did not do their own research. Now they crying pay back the money. Now they do the same. Making decisions on comments in the news and selling. I think it is an easy observation to make. Company must survive so that everybody wins and so restructuring and bringing to the table by CW must happen and therefore share price up.

[DayTraderDad]

Yes good point lets hope it holds with the USA open!!! So far so good!!

Also in IG platform the number of people with shorts decreased by 1% to 6%.

[DayTraderDad]

Share dropped to R1.40 on 6 December 2018 because there was a sense that said 2017 and 2018 financials will be delayed. So the bottom might be at at R1.40 and now it has hit R1.40 again and going up slowly from here so basically a double bottom has formed after 5 months and if we get better news forward then a good up is coming. [/size]

Yes good point lets hope it holds with the USA open!!! So far so good!!