News blog
EPE Special Opportunities
- BY: Andrew Hore |
- POSTED: 13/10/2009 |
EPE Special Opportunities has yet to invest any of the cash it raised in the summer.
EPE raised £5m - £4.7m net - from a placing and 3.0574-for-one open offer at 5p a share in June. There was a subsequent five-for-one share consolidation. This share issue diluted the net asset value of the company and it was 71.84p a share at the end of July 2009. There is net cash of £5m plus committed cash of £1.25m. The investment portfolio is valued at £11.7m.
At 32.5p a share, up 6.5p on the day, EPE is valued at £8.63m. The discount to NAV is nearly 55%. The share price has declined by 78% over the past year.
The existing investment portfolio is performing in line with expectations. The turnaround of Whittard of Chelsea has gone to plan. EPE is looking to sell some of its smaller investments to further boost its cash pile.
EPE will use its cash to acquire small quoted companies with market capitalisations of between £1m and £10m. Management reckons there probably has not been a better time to acquire distressed businesses. These deals will probably be done with a mixture of cash and shares. EPE believes that even strong businesses are facing difficulties and some are short of working capital.
EPE admits that there are others looking at potential distressed investments but it believes that there are plenty of opportunities to go round.
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