Listed Managed Investments - PAI & PCI Implement Capital Management Initiatives

Claire Aitchison

Independent Investment Research

During the month of April, we saw PAI and PMC implement the previously flagged capital management initiatives, capital raisings and new investments. Some of the key news items for the month include:

  • PAI and PMC Issue Bonus Options: In April, Platinum Asia Investments Limited (ASX: PAI) and Platinum Capital Limited (ASX: PMC) both issued bonus options with one bonus option issued for every four shares held. PAI’s options have an exercise price of $0.90 and PMC’s options have an exercise price of $1.37. The exercise prices of both PAI’s and PMC’s options represented a 12.5% discount to the pre-tax NTA of the respective companies as at 31 March 2023. The issue of the options is part of the capital management initiatives that was announced to the market late last year by both company’s. The Board of both company’s considers the issue of bonus options as the most equitable way to potentially grow the assets of the Company and derive the benefits of an increased portfolio size and larger number of shares on issue.
  • WLE Raises $131 million through Placement & Announces SPP: After cancelling a capital raising in March due to market volatility, WAM Leaders Limited (ASX: WLE) raised $131 million in April through a Placement to existing wholesale and sophisticated investors. New shares were issued at $1.48 per share. The issue price was accretive to the NTA with the shares being issued at a premium to the estimated pre-tax NTA as at 31 March 2023, however the shares were issued at a discount to the share price, which saw the share price decline on the back of the announcement. The Company also announced a Share Purchase Plan (SPP) to eligible WLE shareholders. New shares will be issued at the lower of $1.4749 per share or a 2.5% discount to the 5-day VWAP of the share price at the issue date (12 May 2023). As such, new shares will be issued at most, at a similar price to shares issued under the Placement and potentially at a lower price in the event the share price trades lower coming into the issue date. New shares issued under the SPP will be eligible for the interim dividend of 4.5 cents per share, fully franked.
  • CD2 Set to Benefit from Dominion’s Settlement with Fox: During the month, CD Private Equity Fund II (ASX: CD2) announced that one of the investments of the fund is in Staple Street Capital II, L.P. Staple Street Capital II, L.P. has an investment in Dominion Voting Systems. Fox Corp has agreed to settle a defamation lawsuit brought by Dominion for US$787.5 million. This is a positive result for the investment in Dominion, however the RE has been advised that the impact of the settlement on the Fund’s investment will be materially lower than the headline due to costs, taxes and fees, and other items associated with the proceedings.
  • BTI Invests in Rosterfy: During the month, Bailador Technology Investments Limited (ASX: BTI) announced it had made a $9.8 million investment in Rosterfy, a volunteer and workforce management platform. Rosterfy is an Australian company whose platform targets Not-for-Profit organisations, government volunteering bodies and mass-scale events. The SaaS platform allows organisations to recruit, screen, train and schedule their volunteer community, replacing manual processes to better engage the workforce. The investment in Rostersfy represented 4.4% of the NAV of the Company based on the NAV as at 31 March 2023.
  • EAI Releases Shareholder Booklet for Restructure: On 19 April 2023, Ellerston Asia Investments Limited (EAI) released the shareholder booklet with details regarding the restructure of EAI to be considered at the General Meeting and Special Meeting to be held on 18 May 2023. The Company is proposing to convert EAI shares into units in a dual-structure exchange traded managed fund (ETMF), Ellerston Asia Growth Fund (to be renamed Ellerston Asia Growth Fund (Hedge Fund)) (EAGF). If approved by shareholders, EAI shares will be exchanged for units in EAGF and EAI will delist from the ASX. EAGF will list on the AQUA market and shareholders who receive EAGF units will be able to trade EAGF units on the ASX from the Effective Date, which is scheduled to be 1 June 2023. The Company is proposing the restructure to address the discount that EAI has traded at through providing a structure that provides improved liquidity. Since the announcement of the Company’s intention to propose the restructure, the discount at which EAI has traded has narrowed with the anticipation of being able to exit at NAV, something which investors have not been able to do throughout the history of EAI.
  • FOR Increases Stake in WSP: During the month, Forager Australian Shares Fund (ASX: FOR) continued to increase their position in Whispr Limited (ASX: WSP) with FOR’s interest in WSP increasing to 9.35% of the ordinary shares on issue. FOR initially purchased shares in WSP in FY22 when the share price had already declined substantially from previous highs. FOR obviously believes in the story and has increased its interest as the share price continues to fall with WSP currently trading near all time lows.

For full details of the market news  as well as IIR research updates and key data points see the attached report.

The views here are not recommendations and should not be considered as investment advice.

Claire Aitchison
Head of Equities & Funds Research
Independent Investment Research
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