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Principle Capital Holdings SA

  • BY: Andrew Hore |
  • POSTED: 05/01/2010 |

Brett Miller and Rhys Davies, who replaced the board of China Growth Opportunities last year, have taken a 4.34% stake in strategic investment company Principle Capital Holdings SA. 

Despite this news, the Principle Capital share price dipped 2.5p to 19p, which values the company at £3.54m.

Miller and Davies bought the 810,000 shares through Damille Partners V. They got onto the board of China Growth Opportunities, whose shares were trading at a large discount to NAV, and went about turning its investments into cash.

Prior to the announcement of the share purchase Principle said it had signed non-binding heads of terms relating to a potential transaction. If the transaction goes ahead then Principle will leave Aim. There will be an injection of capital at an average market price and existing shareholders will be given the chance to liquidate their shareholdings at the same price.

South African Property Opportunities says that it doesn’t believe that it should pay the 2008 performance fee to Proteus Property Partners, which is 52%-owned by Principle. Principle had included £2.46m from this performance fee in its 2008 figures. Stripping this fee out, Principle would have made a loss in 2008.

Principle had net assets of £35.1m – equivalent to 188p a share - at the end of June 2009. Even if the performance fee is excluded the share price is at a large discount to stated net assets. However, goodwill accounts for £25m of the figure. Taking that off as well leaves £7.6m, much of which is dependent on the value of quoted investments.

The share price is still at a large discount to the sharply reduced NAV figure and that is likely to have been the reason why Miller and Davies have been attracted to Principle.

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