Unlike HML, BHD does not have any convoluted transactions IMO - Yet. The only related party one being BHD holding currency notes for Kings Currency - these have a real value and for which we supposedly receive a 3-4% PA interest. If either party wanted to wind up the relationship/company (all spelled out in the prospectus) then Kings Currency would have capital problems. (If Kings Currency fails, BHD holds the notes) - just as the JBTH will have capital problems if the transaction fails to eventuate with BHD and/or HML.
So, such agreements have good and bad attributes which can change for either party under various situations. I consider BHD shareholders have the upper hand in this instance considering the desperation in the selling technique used to date.
It is obvious that Kings Currency has been separated from JBTH to potentially sell or partner with another company. I am aware of a US trading company wanting to do business in Australia and its business model relies on currency exchanges for its capital base. Such a deal would not benefit BHD due to only holding the currency notes.
The JBTH transaction is obviously needed to increase their capital requirements with Kings Currency being a separate entity now.
Until we see better detail than HML in regard to the transaction, any BHD benefit of a sale/deal of Kings Currency is unknown and if the detail is as with HML then your "types of convoluted transactions we are tangled up in that we don't know about" becomes real. IMO Stu and JBL will win more than BHD shareholders from such a sale/deal, regardless of it possibly ending the transaction.
My concern is that what I perceive the transaction is about is not being adequately explained for BHD shareholders to make rational decisions about the vote. I do not see a 'win-win' with the transaction but a 'We will win - maybe you will lose' which is not uncommon in related party deals.
Meanwhile, I note that the July BHD NTA statement had its market outlook attributed to "BHD's Investment Manager" where there was no outlook statement for June and all prior outlook statements were by Stuart McAuliffe, Chief Investment Officer.
The wording of the July BHD market outlook was the same as HML's NTA statement for July - by Stuart McAuliffe, Chief Investment Officer.
The prospectus has Stuart McAuliffe, Chief Investment Officer responsible for all investment decisions via JBL to receive their 3% PA management fee and 27% Pa performance fee (with hurdles). Stu is supposedly the head of a JBL team handling the proprietary trading system/investments.
Now we have a "BHD's Investment manager" - what does this role entail other than parroting Stu at monthly NTA statements?
Has Stu delegated or divested responsibilities? - or is this a way of distancing himself from the 'problems' of the NTA or trading performance?
Is this BHD Investment Manager's wages paid by JBL or BHD? - if there are investment responsibilities.
The questions are endless as with the many other changes without explanation.
The differences between HML and BHD performance has been marked where we were once told that they would be similar.
We can only hope that with the current market moves that performance will improve no matter who is making the day to day decisions.
The Annual Financial report will be studied closely to find out if the future prospects of the transaction are allowed to be built into annual statements or only the monthly NTA's. We need to know why possible P&L changes occurred at the audit that were not apparent in the now presumed useless monthly NTA statements. Did we have a valuation problem like HML or is incompetence involved? We need to see the details of all the July NTA changes!
The experts report on the transaction may shed some light as well.
It will be next year's annual report to study to find out if we or JBL pays for the 'experts report' for the transaction which is presumably undertaken at their advice. HML's annual report this year may shed light on this issue - if it is presented.
Otherwise, be good little mushrooms and trust Stu to do whatever he wants and fervently hope some crumbs are left for us one day. Alternatively, hope the ASX or ASIC can help in obtaining timely accurate information about NTA's at least but more believable/useful information on the transaction as well - prior to the vote.
The current selling point for the transaction is that it is for ultimate removal of unlisted assets. This is unbelievable IMO, just as the NTA will go down if you don't pass it.
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BHD Price at posting:
71.0¢ Sentiment: Hold Disclosure: Held
