I recently invested in St Peter Port Capital. I’m looking for any views on the contrary please. I invested mainly due to:

  • the Market Cap (c£2.25m) being significantly lower than the value of the unlisted assets it has invested in (c£9.6m)
  • SPPC recently announcing an auction process to dispose of all the companies assets and return the net cash to shareholders as a return of capital, with the entire process likely to take 6-8 weeks from beginning of March 2021.

The recent half year results as at 30th Sept, adjusted for a small sale of holdings in Oct 2020.

Unlisted Asset – Brazil Potash Corp £5.7m

Unlisted Asset – Buried Hill Energy (Cyprus) Plc £2.9m

Other Unlisted Assets £0.7m

Other Receivables + Cash – All Liabilities £0.3m

Net Asset Value. £9.6m. SPPC is valued in the market at £2.25m

The main holding – Brazil Potash Corp – is currently being valued at $2.5 per share in the latest accounts. The recent funding round by Brazil Potash saw investment at $4, with a view to public listing in 12 to 18 months.

The second holding – Buried Hill Energy – Development of the area in Caspian Sea, was stalled due to dispute between Turkmen and Azeri Governments, but an arrangement between the two has just been made.

Downside risk. If the auction only attracts a third of the value is the recent accounts, minus any cash drag and auction fees – at the current Market Cap should at least get my investment back.

Upside – If the auction attracts the value of the accounts – should return 3 or 4 times the investment at Market Cap

Upside – If Brazil Potash attracts the investments at the latest funding round - $4, there is potential for more upside.

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