CBL Insurance IPO

[Brain]

Thanks Balance

[hardt]

Difference, Hardt, is that CBL Insurance (the mainstay of the group's business) is being LIQUIDATED.

As they are in breach of the minimum solvency requirement, RBNZ is coming after them and preventing any likelihood of damage to current policy holders.

They are not fundamentally over and there does remain an option to downsize back into a state the RBNZ will be comfortable with.

They have found themselves in a terrible position no doubt about that.

I have written off the investment completely and am trying to see what info I overlooked when I entered this one...
Say what you will about Mr Harris, but he is a bright cookie ( despite the mess his group is stuck in ) and no one should expect him to sit back as his life's work dies.
You can gather a lot about an executive with how they resolve situations just like this one... all eyes on Pete

[Balance]

Thanks Balance

bit more infor :

There are many reasons why it may be desirable to seek to have a company put into liquidation. The most common reason is that the company owes a client money. Another common reason is that the company has become unmanageable due to internal conflicts (particularly common with family owned companies). In cases such as this the client wishes for the company’s affairs to be wound up, and its assets realised and distributed by a liquidator.

Liquidation will enable a liquidator to realise the company’s assets and make a distribution to creditors including the client and, where the company is solvent, shareholders. The liquidator may also conduct an investigation into the company’s affairs. This can involve setting aside transactions under which the company has stripped itself of assets or seeking to recover funds from individual directors if the directors have breached their obligations to the company.

In order to address this problem it is possible to have an “interim liquidator” appointed to preserve the company’s assets pending the Court’s determination of whether or not to place the company into final liquidation.

Such applications are typically brought on an urgent basis and without notice to the company.

An interim liquidator does not have jurisdiction to realise the company’s assets and make distributions to creditors. Nor does an interim liquidator have the powers to make the sort of investigations and take the sort of recovery actions available to a final liquidator. Nonetheless, interim liquidators do have considerable powers they can use in order to preserve the company’s assets pending the final liquidation of the company, including, if necessary, assuming control of the operation of a company’s business.

[Balance]

As they are in breach of the minimum solvency requirement, RBNZ is coming after them and preventing any likelihood of damage to current policy holders.

They are not fundamentally over and there does remain an option to downsize back into a state the RBNZ will be comfortable with.

They have found themselves in a terrible position no doubt about that.

If only it was that - one suspects not as RBNZ would have been very aware of the implications of getting an liquidator appointed.

It is hell of a mess - and heck of a pity for NZ Inc. NZ could do with a successful and thriving global insurance company.

It is sobering to note that the company has extracted close to quarter of a billion dollars ($245m) from the market since its IPO less than 2 years ago - $155m as new capital and $90m to directors and management cashing out.

How did it get into such a mess so quickly?

[winner69]

Long list of companies in Voluntary Administration

Company instigated this lot ...probably to help untangle the web

https://www.nzx.com/announcements/314698

[Dust]

ouch....

some of the biggest players that got stung harbour 17mil, ACC 4 mil, NZSuper 8mil shares. Not sure why the PMs at these govt entities are getting paid tax payer salaries just so they can buy out every ticker on the exchange...wheres the value add in that.

Some notable target price valuations given recently lol

Forbarr - $3.6
Blue Ocean - $ 3.63
FNZC - $3.49
UBS $3.7

Also big shoutout to Deloitte! (What happens when you put hundreds of grads who lacks common sense on the job btw)

Expensive lesson for some of the holders on here, wishing you the best of luck hoping something good can still come out of this mess. An important reminder for the rest of us "If you dont understand what you're buying, best not at all".

[BlackPeter]

... An important reminder for the rest of us "If you dont understand what you're buying, best not at all".

Good advise, but I think misplaced here. This is unless you are saying that anybody buying any companies shares needs to personally check all due diligence the company ever has done (or was supposed to do) in order of "understanding what you are buying".

Nothing wrong with the insurance business unless there are "black swan" events (and so far I don't see that in this case) or unless whoever is responsible for running the company don't know how to calculate their risks. Latter points to lack of management / board competence, which is hard for any shareholder to measure (particularly if the company was for more than 40 years lucky and has sound financial ratings and analyst assessments). You only notice lacking competence in running a business when it is too late.

[winner69]

Dust says "If you dont understand what you're buying, best not at all".

In CBL’s case surely reading the CBL presentation of early December with all the technical notes in it I would hazard a guess nobody on this forum would have understood what they really do ..except in vague terms.

And I did comment at the time only a few in the company probably did ...in hindsight maybe even they didn’t

[Dust]

Yes I agree BP, not saying there was anything wrong with investing in sound financial companies in general.

Speaking more from a personal experience, when CBL first got on my radar, I didn't even get as far as looking at their financials yet before every gut instinct started telling me to run in the opposite direction. Writing foreign business was a big turn off at first (not that theres anyting wrong with this, just I'm no expert in european insurance regulations)...then a quick trip to their website kind of sealed the deal, there are no legitimate businesses in 2018 running scuffed sites looking like that I can tell you. I've seen cryto ponzi sites whose made more effort in their presentation!

[BlackPeter]

Yes I agree BP, not saying there was anything wrong with investing in sound financial companies in general.

Speaking more from a personal experience, when CBL first got on my radar, I didn't even get as far as looking at their financials yet before every gut instinct started telling me to run in the opposite direction. Writing foreign business was a big turn off at first (not that theres anyting wrong with this, just I'm no expert in european insurance regulations)...then a quick trip to their website kind of sealed the deal, there are no legitimate businesses in 2018 running scuffed sites looking like that I can tell you. I've seen cryto ponzi sites whose made more effort in their presentation!

Fair enough ... and yes, I do remember winner commenting on the presentation.

I think what I would take out of both of these issues is that they either didn't bother to present to the respective audience or had pretty bad presenting skills (or both). I guess we will (hopefully) still learn whether their bad presentation skills resulted in the disappearance of hundreds of millions of dollars (and who knows - maybe the liquidator finds some of them (just being optimistic );

I still feel that it is more likely the recent events point either to board incompetence (lack of due diligence?) or to more sinister reasons - and these are both things which unfortunately can happen in any industry with or without presentation skills.

I do agree however, that their collection of (rather unrelated) niche markets around the world might be as well a sign for something, but again - I don't think this was the cause for the current situation.

If we assume (we don't know, but this is the only hint we have) that the current malaise is based on them miscalculating the long tail for the French construction industry, than neither a more glossy and readable presentation nor a better designed web page for the parent holding would have stopped what happened.