marktime1231
04 May 2018
Suniva progress This today from eenews a trade publication in the US"The fate of Suniva began to clarify in late March, when its biggest creditor, a New York financial firm called SQN Capital Management, asked a Delaware bankruptcy court to allow it to sell assets it held as collateral on $57 million in loans."There is no possibility of a successful reorganization within a reasonable amount of time," the company said in a court brief, adding that Suniva had missed deadlines to present a plan that would allow it to emerge from Chapter 11 bankruptcy. This form of bankruptcy holds off creditors while a company seeks a workable business plan.On April 17, the judge gave the green light for SQN to auction off assets at Suniva's plants in Saginaw, Mich., and in Norcross, Ga., a suburb of Atlanta.The assets controlled by SQN are almost all the contents of Suniva's factories, including printers, diffusers, ovens, laminators and conveyors. As important, SQN controls Suniva's trademarks and patents.Yesterday, the court granted the same right to Wanxiang America Corp., a Chinese-owned firm that holds other assets. Now SQN's and Wanxiang's auctions will be held simultaneously, as soon as May 24.If an auction is held and no one makes a reasonable offer, SQN and other creditors could buy the assets themselves and then own Suniva outright, without the bankruptcy obligations.An agreement approved by the court budgets almost $2 million to keep Suniva operating and allows SQN and another major creditor, Lion Point Capital, to continue to seek access to a pot of federal funds, made up of tariffs collected from prior Chinese solar imports. It also permits them to keep paying leases on Suniva's properties through July and to be first in line to take over those leases if they become available."So SQN taking steps to recover from Suniva either selling off hard assets or more complex arrangements ticking the company over on an interim basis like a PE turnaround, all the while claiming an income stream from import tariffs. Is it playing a clever game to squeeze value out of the mess, could we end up winners?Got to admire the efforts being taken by SQN, the row they started over cheap foreign solar imports to the US partly responsible for the current global trade war. Still it is a shame a simple trade sale of the business as the quickest way to resolve things appears to be off the table.In other news SQN has announced plans for capital redemption of some C shares, all too complicated for my small brain.Hopeful this will resolve favourably in 2018.
marktime1231
04 May 2018
Doubled up my stake in SQN on ex-div today at 92p, in preference to the other income trusts I have been reviewing on the strength of its sp recovery potential and the top notch monthly yield.
devonplay
30 Apr 2018
Re: Problems resolving Just adding to my watch list. Too early for me to jump in, but I've started the process of really exploring.DL
marktime1231
11 Apr 2018
Re: Problems resolving quietly patting myself on the back may have called this rightif I had a brother we would be chuckling togetherseriously though this might only be a 7.5% yielder soon
marktime1231
04 Apr 2018
Problems resolving A first major purchase of SQN this afternoon at under 90p so on a 10% discount and at a yield of 8%, paying out monthly. I sold some 6% and 6.5% retail bonds to do this, which sounds like a gamble but their premiums have been vulnerable to the prospect of rising gilt yields. And I had some CGT allowance to use up.I have tracked SQN for nearly two years through its boom to over a 10% premium and more recent trough resulting from fears over two failing investments. Yesterday SQN confirmed a positive resolution over Snoozebox, and the team has repeated they are confident of an equitable outcome over Suniva in the months ahead.A return to a modest premium is not out of the question, and an 8% income all the while from short-medium term asset finance seems good value whatever else happens to stocks and bonds. The alternative NCYF remains on my radar for a first stake at the right price, but has recently returned to an expensive looking premium of 6%+, pays less dividend less often, and is no less susceptible to the danger of rising gilt yields.
VoxVoci
26 Mar 2018
Share Price Stopped Dropping? The recent update from SQN seems to have provided a tailwind for the shares.The Suniva and Snoozebox problems seemed to be progressing ok. However still significantly below the highs that prevailed prior to the aforementioned issues. I guess confidence has been knocked and the risks associated here have been brought into clear focus which may have dampened investor appetite.Last week saw the markets in decline whilst SQN had its best week for sometime. Which demonstrates that it is not correlated to the wider market but affected for good or bad by the news flow from SQN themselves. If you can accept that not 100% of the investments SQN make will work out ideally, but trust that the management of those situations can be worked through keeping detrimental effects to a minimum, then In my view a good addition and long term hold to a diversified income portfolio.
Dingledangle
20 Mar 2018
Re: share price still dropping I can only think it was a big holder reducing their investment. 5m shares traded yesterday which is unusually high. That seems to have marked the end of the selling for now.
casabanker
20 Mar 2018
Re: share price still dropping We still don't know why the sp dropped to 81p. The breakdown of the RNS service in late January did not help. I found out about the Suniva resuscitation about a week after it had occurred. The sp has recovered a little this week so maybe the market has caught up with circumstances. Hopefully the dividend is now more secure.Casa.
strapuk
16 Mar 2018
Re: share price still dropping I was under the impression that there was a Parent Company Guarantee that would be activated in the event Suniva didn't recover?The silence from the SQN Board on the share price slump is deafening. Not at all happy bunny at present.
Dingledangle
15 Mar 2018
Re: share price still dropping Until the start of the year, the share price was in lock step with the sector, but over the last couple of months has fallen away dramatically. Unless there is some insider trading going on, everything seems relatively ok here. It is possible the Sunviva investment may be written off, but we were told last year this amounted to 6.8% net assets. The drop over the last year has been about 30%, so Sunviva alone cannot explain the big drop. A non exec director was buying up until Feb this year with a purchase of 23000 shares at 89p. Disagreeable though it is, I am holding until some news is announced.
Damp Seaweed
15 Mar 2018
Re: share price still dropping I'm watching with great dismay the continuing drop in price.In the absence of news in the public domain, one can only guess at the cause of the negative sentiment.The huge (~15%) discount to NAV can really only be down to 2 or 3 factors.1. The current NAV may be subject to revision eg write off/down of Suniva investment. 2. Management competence being questioned.3. Dividend may not be sustainable.1 & 2 seem a definite possibility IMHO. I'm not sure about 3. So I'm continuing to hold for now in the hope that the first does not damage the share price still further, and secondly, maybe the management will have learnt some lessons.
sigil
14 Mar 2018
Re: share price still dropping DingledangleMany thanks I shall follow up on the link you supplied.My initial thoughts are that this should not affect SQN because as far as I am aware they do not deal in preference shares. This together with the fact that the price has steadily dropped over the last year. However who can accurately tell what will affect the market, certainly not me.Regards
Dingledangle
14 Mar 2018
Re: share price still dropping SigilAviva have announced they are considering redeeming their Aviva and General Accident Preference shares at par, which has precipitated a big drop in virtually all bank preference shares across the board. There are plenty of people questioning both the legality and morality of such a move, and if you wish to read many good posts, go to the Mark Taber investments site. [link]
sigil
14 Mar 2018
Re: share price still dropping I agree with you although I have been out of touch for some time. Is it possible to expand you comment regarding preference shares.Thanks.
Dingledangle
14 Mar 2018
share price still dropping As anyone invested here knows, the steady drop in share price is frustrating. The company is still paying out a good dividend now around 8.6% and new investments in leasing equipment are being made. However what has to happen for people to take an interest here again, especially after the preference shares debacle recently?
