VIL - Veritas Investments Limited

**hardt** · 19-08-2017, 07:45 AM

It's just way too cheap not to give it a dig... time will come where I will thank my drunk, stupid self.

Negative multiple on EBITDA, cash flows to boot, only worry is the leverage.

Dividend might land in 2018-2019, 30-50% pay out would have the yield >20% on todays 13c.

**Beagle** · 19-08-2017, 11:30 AM

I doubt their bank have much remaining confidence and they'll want that debt progressively repaid. I don't rate your chances of a dividend at all but good luck with this punt. Directors now have a well proven history of destroying shareholder value.

**Beagle** · 29-08-2017, 04:31 PM

As predicted above ANZ have announced they do not intend to renew their banking facility as it comes due in October and November this year and another tranche later.
https://www.nzx.com/companies/VIL/announcements/306342 Fundamental going concern uncertainty.
Cavalier will be next to get this treatment in my opinion.

**hardt** · 29-08-2017, 05:22 PM

Originally Posted by Beagle

As predicted above ANZ have announced they do not intend to renew their banking facility as it comes due in October and November this year and another tranche later.
https://www.nzx.com/companies/VIL/announcements/306342 Fundamental going concern uncertainty.
Cavalier will be next to get this treatment in my opinion.

A dog with some cash flow and a whopping $30m of debt.

luckily my holding at 13c is too small to care about.

**Beagle** · 29-08-2017, 05:25 PM

Do a possum in the headlights....that strategy is working "wonders' for me with Metroglass, (NOT).

**silverblizzard888** · 29-08-2017, 05:35 PM

I think they should be able to refinance with another bank, giving they are bringing in good profits from their Mad Butcher and Better Bar Company, which can be good earners if they can manage to consistently run these two businesses. They have repaid their debt borrowings quite well in the past two years from a high of $35 million to the $28.5 million at the present time. Of course the wording sounds scary about it not being able to be a going concern if they can't pay debt, given debt easily out weighs assets, why would you stop a positive cashflow business from operating when you get the same scrapes left over either way. Likely ANZ will support them until they can find another lender, though be prepared for harsher lending terms.

**winner69** · 29-08-2017, 05:51 PM

I hope the Mad Butcher franchisees can secure heir future by buying out the greedy Veritas guys (or waiting for the liquidation and getting it for nothing) and running it as a coop. Keep all the cash they get screwed for every day of the year. At least their destiny in their hands that way.

Probably seem hard working decent guys amongst the operators who possibly have mortgaged their life's away by becoming a Mad Butcher franchise.

Won't help share holders though

**Beagle** · 29-08-2017, 06:19 PM

Originally Posted by silverblizzard888

I think they should be able to refinance with another bank, giving they are bringing in good profits from their Mad Butcher and Better Bar Company, which can be good earners if they can manage to consistently run these two businesses. They have repaid their debt borrowings quite well in the past two years from a high of $35 million to the $28.5 million at the present time. Of course the wording sounds scary about it not being able to be a going concern if they can't pay debt, given debt easily out weighs assets, why would you stop a positive cashflow business from operating when you get the same scrapes left over either way. Likely ANZ will support them until they can find another lender, though be prepared for harsher lending terms.

Banks don't like losses. Its much harder to find new banking facilities when a company is making losses. You can talk about positive cash flow all you like, (and veritas do a lot of that) but ANZ would not want to give this business away if they thought it was a good reward for the risk involved and if they don't want it I would be very surprised if another one of the main trading banks would take this on. For one thing a loss is a loss is a loss not matter which way you slice and dice it and then there are serious questions about the carrying value of the assets and more importantly their net realisable value in a forced sale situation. I have seen this in my professional capacity with one struggling client. When ANZ walk away as a banker its because they honestly don't believe in the viability of your business.
I rate the chances of a capital raise as also extremely unlikely. Best thing VIL directors can do is admit defeat and try and do some sort of managed wind down where they sell in an orderly manner the remaining assets and try and salvage some small amount of capital for shareholders from this horrific mess they created.
I rate the chances of any meaningful return to shareholders in excess of the current share price as very slim as its now public knowledge they are ostensibly distressed asset sellers and I expect an astute buyer of their assets to take full commercial advantage of that.