News: CTN Contango asset management announces sale of Contago Income Generator Limited, page-21

Edit. AGM yesterday

Lets look at this gem in the Chairman's address

Contango MicroCap Limited 2016 AGM Page 2
Investment Management Activities
As FY16 concluded, the Company sold its 100% investment manager subsidiary - Contango Asset Management Limited (CAML). In addition to the contribution to profit of $470,000 that CAML's operations provided for the year, the sale delivered $15.5m of cash proceeds and a profit on sale of $1.5m before tax. To put this in better perspective, since taking full ownership of CAML in November 2013 at a cost of $11.6m, CAML has delivered profits from its operations and upon sale of $3.2m to provide return on investment of 28% before tax which is higher than the investment portfolio return of 26% and All Ords return of 12% over the corresponding period.

To put this in better perspective, see my comments in italics
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This sale now makes CTN a ‘pure’ LIC (what the heck does this nonsense mean?) with an arm’s length investment manager (2 years ago you sent me letters asking me to vote on internalising the manager because that was the best way forward) but ("but"? you mean And I believe) importantly (for who?) sees it retaining (if it is important to retain why did you let it go?) CAML as investment manager with Bill Laister responsible for this portfolio. (Ive seen the numbers, every other microcap manager is better. With respect Mr Chairman, these guys are manager #20/21 fund manager performance wise. )
A new investment management agreement was entered into as part of the transaction with a term of 5 years and a reduction in the management fee scale. There is no performance fee (there wasn't anyway) and also tougher performance benchmarks that were not previously present (please tell me more if this is important i would like to know why this is important and what the term are and what the consequences are)


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who writes this nonsense?

Investment in Contango Income Generator Limited
The Board recently sold its 37% stake in Contango Income Generator Limited (CIE’s).
Originally undertaken as a mechanism to grow the funds management business, with the sale of CAML having occurred, continuing to hold this investment had served its purpose (served its purpose. okay, for who may I ask?) and when the opportunity to sell this investment in a single transaction became available in the last two weeks, (oh, it just poof- appeared all of the sudden did it. how convenient) the Board decided to proceed.
The 30m shares held were sold for a price of $0.94 which was only a modest discount of 3% from CIE’s net tangible asset value. (This screams of "Dear CIE shareholder. Even we don't know how to lift the shareprice or liquidity, do what we did, dump your stock at the first opportunity".) Given the very low liquidity of CIE prior to this transaction and the large magnitude of the transaction parcel, this was an acceptable result. (point proven)



Rant over