REG - Thalassa Holdings - Trading Update

Thalassa HoldingsAnnouncement

02/03/2020 07:00

RNS Number : 5630E
  
Thalassa Holdings Limited
  
02 March 2020
  
 

Thalassa Holdings Ltd
(Reuters: THAL.L, Bloomberg: THAL:LN)
Trading update
This announcement contains inside information for the purposes of Article 7 of Regulation 596/2014.
Given the current volatility in world stock markets brought on in large part by the Coronavirus outbreak, the board of Thalassa Holdings Ltd ("THAL" or "the Company") wishes to update the market on Group trading ahead of the release of its financial results for the year ended 31 December by 31 March  2020.
 
Thalassa
·     The Group was well positioned going into this period of market volatility through being both long in cash and hedged through a combination of different strategies that provide  unlimited upside but limited downside. These strategies include short currency positions, long and short/inverse ETFs against our long holdings. The board would emphasise that these hedges can only partially offset the impact on long holdings of a prolonged major market correction as the Group is set up as a net long buyer of undervalued assets.
·     Thalassa currently has net cash balances of ca. $10.1 million and ca. $5.9 million invested in Miscellaneous Holdings (as further iterated below and which do not include Core Holdings) and hedges. 
·     Thalassa's investments in various companies total $3.3 million and hedge positions, excluding currency hedges, total $2.6 million.
 
Miscellaneous Holdings
·     Thalassa holds a number of undisclosed positions in listed companies which the board believes are undervalued. Our policy to not disclose the identity of these holdings, unless required for compliance purposes as in the case of Newmark Securities (NWT LN) where we have a disclosed holding of 9.04%, is solely down to the often illiquid nature of the shares of the companies we are dealing in. 
·     In the year to date, Thalassa has realised gains of ca. $570,000 from the    disposal of long positions and hedges and has, as at the time of writing, ca. $464,000 of net unrealised gains of which ca. $400,000 are on hedge positions, $10,000 on currency hedges and the balance of ca. $54,000 on long positions.
 
Core Holdings
Anemoi S.A.
·     Anemoi has been set up as a Special Purpose Acquisition Company (SPAC) with the intention of acquiring a significant operating company, which the board believes to be undervalued and which offers significant potential capital upside. The Company is currently seeking a listing of Anemoi on the Luxembourg Stock Exchange.
 
Apeiron Holdings AG
·     As previously announced, Apeiron has successfully completed the acquisition of id4 AG, which is working hard to secure contracts for its RegTech software and recently announced a technological partnership with the leading Swiss pension platform lemania pension hub to provide id4's client lifecycle management software.
 
Autonomous Robotics Limited ("ARL")
·     As previously announced, proof of concept has been achieved and management is now, in addition to continued product development, largely focused on securing commercial and/or defence partnership(s) in order to commercialise the company's undersea autonomous nodes. [Exploratory discussions with potential partners are ongoing, although there can be no certainty that these will lead to an agreement].
 
The Local Shopping REIT Plc ("LSR")
·     The board regrets that it is unable to comment outside of announcements made by LSR. Information on LSR can be found under the ticker (LSR LN) and Thalassa currently holds 92.6% of LSR's issued share capital.
 
Gitone Beteiligungsverwaltungs GmbH ("Gitone")
·     As previously announced, Thalassa has entered into an €11 million convertible loan agreement with Gitone Beteiligungsverwaltungs GmbH, Austria. The underlying asset in which Thalassa currently has an indirect interest in is Liburnia Riviera Hotels (LRH ZA) (www.liburnia.hr).
·     Clearly the Coronavirus outbreak is a concern to everyone in the Travel and Leisure industry and the board is monitoring the situation carefully.
 
Duncan Soukup, Chairman of THAL stated:
"The board of Thalassa has, since the sale of WGP in January 2018, undertaken a number of initiatives which, unsurprisingly, have taken longer to develop than we would have liked. 
"M&A transactions invariably take considerably longer to develop and execute than instantaneous dealings in the stock market. However, Thalassa's board is convinced that the best way to generate substantial returns for shareholders is through long term investing and the acquisition of undervalued assets. In the past two years global stock markets have raced ahead, with numerous story stocks such as Tesla and Virgin Galactic Holdings (SPCE US), defying gravity, at least until a few of days ago. At its recent high, SPCE US sported a very healthy market capitalisation of ca. $8.3 billion (20 Feb 2020) but is now down, at the time of writing, to $4.8 billion and looking like it is going lower. Still not bad for a company with no revenues, much less any earnings!
 
"As a value investor the past two years have, on the one hand, been somewhat frustrating due to difficulty in closing some transactions but they have also reminded us that patience is ultimately rewarded. The Company has succeeded in buying back ca. 35% of its outstanding shares at a significant discount to the book value (BV) and the board believes the Company is now well-positioned to take advantage of the current global stock market correction, which we believe is far from over."
"We believe that the Coronavirus outbreak behoves comment; your board is convinced that Politics and Medicine are the worst of bedfellows and that the World Health Organisation ("WHO") leadership is woefully understating the implications and severity of the Coronavirus outbreak. Given that the only certainty of the Coronavirus is that the world does not know exactly what it is, where it came from or how to treat it, one doesn't have to be a rocket scientist to suggest that the world should prepare for the worst and hope for the best rather than just hoping it will miraculously disappear.
"Europe's decision to keep borders open, notwithstanding the spread of the virus, is clearly understandable from both a political and economic perspective but appears, even to the uneducated layman, to fly in the face of the belated action taken by the Chinese government to ring fence Hubei Province. Clearly the powers that be are fixated on their rear-view mirrors and will not take action until significant damage has been done. Plus ca change!"
"We do not envy any government the decision as to how to respond to a major health crisis. However, if history teaches us anything, the world was slow to react to both the SARS and Ebola outbreaks and history will probably repeat itself with the current Coronavirus outbreak. Between 2002 and 2003 there were 8,098 cases of SARS virus and 774 deaths in 17 countries whilst the 1976/ongoing deadly Ebola virus, which is still prevalent in Africa and which has so far killed over 11,323 people! In July 2019 the WHO declared the Congo Ebola outbreak a world health emergency (source: Wikipedia)."
"To date there have been 82,585 Coronavirus cases reported and 2,814 deaths…(source: www.worldometers.info/coronavirus/).
"If the above statistics are any precursor to the future…it does not bode well for rapid containment of the Coronavirus, nor for the stock market; as a result, we will maintain our hedge positions, continue to develop our core holdings…and prepare for the worst whilst hoping for the best."
"To quote Winston Churchill, "Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning."
 
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Enquiries:








Thalassa Holdings Ltd








Duncan Soukup (Executive Chairman)


+33 (0)6 78 63 26 89




WH Ireland Limited (Financial Adviser)


+44 (0)207 220 1650




Chris Fielding, Managing Director, Corporate Finance







 
www.thalassaholdingsltd.com  
Note to Editors:
About Thalassa
Thalassa Holdings Ltd, incorporated and registered in the BVI, is a holding company with various interests across a number of industries.


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