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30.07.2019 kl 17:28 2065

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29.07.2019:   https://www.ft.com/content/ab026c6c-b1c8-11e9-8cb2-799a3a8cf37b

Woodford under more fire after £1m trust share sale

«Neil Woodford’s relationship with the London Stock Exchange-listed investment trust that bears his name has blown apart after he dumped a £1m shareholding but failed to notify the company of the share sale for three weeks.

Earlier on Monday, the independent board of Woodford Patient Capital Trust, Mr Woodford’s listed investment trust, decided to make the share sale public after it was notified by Mr Woodford on Saturday that he had sold 1.75m shares between July 3 and July 8.

Working with house broker Winterflood Securities, WPCT is now soliciting interest in the contract from an even “broader range of third-party managers” as it assesses its options. This “may or may not lead to a change in the company’s management arrangements”, WPCT said.

WPCT’s shares dropped 5 per cent to a fresh all-time low of 50.6p on Monday, down by half from their 52-week high. The shares have fallen a third since the equity income fund blocked investors from withdrawing their capital last month.

Iain Scouller, an analyst at Stifel, said a new manager could do a precautionary “kitchen-sink” writedown of WPCT’s unlisted portfolio, which makes up three-quarters of the trust’s net asset value.

“We think any new manager taking on the contract should make some assessment via the board and shareholders as to whether this would be on a normal long-term continuing basis, or whether shareholders will look for WPCT to go into ‘run-off’ with disposals of investments and returns of capital to investors,” Mr Scouller said.

The Financial Times reported last month that Mr Woodford was at risk of being kicked off the trust, and that the board had held discussions with Winterflood about terminating its contract with Mr Woodford.

Christopher Brown and Adam Kelly, analysts at JPMorgan, pointed to the long gap between the date the WPTC shares sales took place and the date the board was informed, saying: “Neil Woodford’s sale of a majority of his own WPCT shares, whatever the reason, is clearly not a positive signal to other shareholders, in our view, particularly given the timing.”

They added: “It is not inconceivable that [Woodford Investment Management] could experience such severe outflows on its open-ended funds that it is no longer a viable business and has to wind down.”

WPCT’s board previously announced it was clamping down on its trading activity and debt reduction was a priority. It has also drafted in more independent directors, following criticism that its members were too close to Mr Woodford.»

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