Monday 9 September 2013

Hastings High Yield Fund (HHY)

HHY is in run-down mode. Please click herehere and here for previous posts. 

The following slides are taken from the annual results presentation:


As at 30 June, the portfolio was 'worth' $50.9m or 49.3c NTA. $13.6m is in cash. $31.1m is in Cory Environmental and Maher Terminals - both of which have another more years until maturity. The balance is made up of minor investments - including Hyne which is becoming more minor thanks to write-downs in its value. 

This compares to the current market capitalisation of $38.7m or 37.5c.

The good news is a chunk of cash is sitting on the balance sheet and should be paid out. Including the proceeds from I-Med, this amount should be around 15c per share. Another cash payment should be soon coming. 

The bad news is the timing has slipped - 2016 now looks to be the most likely finish date for this exercise and the quality of the remaining assets is difficult to get excited about.  

Hmmm. If everything does according to plan, the IRR continues to beat my investment hurdle rate. But as we know, everything may not go according to plan. In practical terms, getting comfortable with the underlying investments requires time that I can better allocate elsewhere especially considering my very minor position in the first place. 

I have sold my small stake in HHY ~ at cost. 

Kristian 

Disclosure: no position in HHY

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