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 http://www.trinitycapitalplc.com/.
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