Trinity Capital: Completion of Disposal of Assets

The day after the publication of the post about Trinity Capital the company has announced the completion of the disposal of TC1 and TC5. Proceeds of £8.7m were received by TCML, a wholly owned subsidiary of Trinity:

Following the announcement made on 21 October 2016, the Board of Trinity Capital PLC (the “Company”) is now pleased to announce that the Company’s wholly owned subsidiary, Trinity Capital Mauritius Limited (“TCML”), completed the realisation of its investments in Trinity Capital (One) Limited (“TC-1”) and Trinity Capital (Five) Limited (“TC-5”) on 15 November 2016. Disposal proceeds of £8.7 million were received by TCML.

The only remaining investment is Trinity Capital (Ten) Limited (“TC-10”), held together with Immobilien Development Indien I GmbH & Co. KG and Immobilien Development Indien II GmbH & Co. KG (together the “Immobilien Funds”). The Immobilien Funds have provided a formal commitment to permit and facilitate TC-10 to distribute to TCML the proceeds from a future sale of its indirect interests held in DB (BKC) Realtors Private Limited (formerly MK Malls & Developers Private Limited).

The Immobilien Funds and TCML will now proceed and co-operate to discontinue all pending legal proceedings in Mauritius.

At 31 March 2016, the Company’s holdings in TC-1 and TC-5 were valued at an aggregate of £5.1 million. The Company’s sole remaining investment is TCML’s holding in TC-10.

The Board intends to announce in due course a further distribution to shareholders and to commence consultations on the future of the Company.

More information on the Company is available at

[emphasis added]

Great news obviously. The proceeds were a bit higher than the amount I mentioned in the post. My calculation was based on yesterday’s exchange rates.

The only investment left now is TC10 and I hope the sale of minority interest can be completed soon as well. There should be another distribution coming “in due course”. Like I said yesterday, I think they will be looking to liquidate the company as soon as possible. The sale of the interest in TC10 is now the only remaining obstacle. I don’t really see an alternative, given the low amount of assets left in the company and the fact that this slow motion liquidation has been in progress since 2009. It remains to be seen how long it will take for the liquidation to take place.

The company should have more than £11.5m in cash now: the £3.55m left after the previous capital return plus the £8.7m now received. Reduce this amount by your estimate of the administration and management costs incurred since March. I used £0.4m previously, but perhaps there are some extra (legal) costs associated with the sale of TC1 and TC5? I think an estimate of £11.5m for the total amount of cash currently held should be reasonably close.

The company had total liabilities of £2.34m in March, but £2m of that relates to the provision for legal costs associated with the dispute with Immobilien Funds. Since, in light of the agreement with Immobilien Funds, that dispute looks settled this £2m liability should disappear.

All in all this still looks like an attractive special situation to me, even today. Perhaps more attractive, because the cash has been received and the biggest risk is now off the table. Shareholders could find themselves receiving cash totaling something close to the current market cap (£9.5m, based on a 4.50p price) in the next distribution (which should take place “in due course”), while still holding an interest in the remaining assets. Trinity would then still hold £2m in cash and the remaining interest in TC10. Maybe I’m missing something though.

Edit: Copied the text of the corrected announcement by Trinity Capital, which now shows the right carrying value (£5.1m) of TC1 and TC5 on the March 31 financials. This means the carrying value of TC10 on March 31 was £3.2m.

Disclosure: long Trinity Capital

Posted in Special situations and tagged .


  1. Nicely timed purchase!

    Have you seen the new corrected announcement? It’s a bit confusing but looks like the valuation of the remaining properties has just gone up.

    BTW I’m in the UK and wasn’t charged stamp duty… complain to your broker! It’s an Isle of Man company so I’m fairly sure it shouldn’t apply.

    • I bought a week or two ago, but I was too lazy to write a post about it earlier. 🙂

      Yes, I’ve just updated the post with the corrected announcement, which shows the right amount for the valuation of the TC1 and TC5 investments on their financial statement of March 31. I think they wrote down the value of their investments when they presented their financials for March 31, because they still had the conflict with Immobilien Funds and it was very unclear if / when cash could be received. Now that they were able to receive a payment for TC1 & TC5 relatively early, the amount received (£8.7m) exceeds the carrying value of £5.1m for TC1 & TC5.

      This means that the carrying value of TC10 on March 31 was £3.2m. So that gives us some idea of the remaining value of this asset. Note 11 of the annual report also mentions that they wrote down the value of all three the investments, so perhaps they might be able to get a bit more than £3.2m for the TC10 interest.

      Thanks for your comment about the stamp duty! I will ask my broker about this.

      • Thanks again Ben, you were right about the stamp duty. It should not have been charged and my broker just reimbursed me.

        I removed the paragraph about my broker charging me 0.5% stamp duty to avoid creating confusion for blog readers about this.

  2. Pingback: Trinity Capital announces cash distribution of 5p |

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