Nog even een beetje research naar Westface Capital, de verstrekkers van de financiele lifeline naar Xcite om de poen en dus de tijd te hebben de optimale deal te organiseren, gedaan.
De optimale deal is bested voor shareholders uiteraard.
Blue-Eyes/Changeling is de auteur van het stuk.
Komt ie:
Interesting to note that we are the first clients of the new fund - but I am intrigued by the comment "lead investor"
West Face, an investor known for its activist approach, manages more than $2-billion. The firm closed its first deal for the credit fund in December as lead investor in an US$80-million unsecured debt financing for Xcite Energy Ltd., a North Sea oil and gas explorer. The financing also included a common equity and warrant component.
West Face has a reputation for doing an enormous amount of homework on companies it backs, and unlike many Canadian peers, the fund is willing to sink capital into distressed corporate situations. It has firepower that's in the $1-billion range. Co-founded by financier Greg Boland, West Face and predecessor funds have made money on CanWest Global Communications, Stelco, Saskatchewan Wheat Pool and CP Ships.
Most investors think risk is a four-letter word. For Greg Boland, it's a beautiful thing.
Bankruptcy plays don't faze him. Accounting scandal? The messier, the better. Hated companies, orphaned stocks that everyone else has given up on -- he's all for them. He is the investing world's equivalent of a guy who enjoys car wrecks.
He ought to know the value of a strong stomach. Mr. Boland, operating under an investment vehicle called Sunrise Partners, was one of the mystery men behind Stelco's restructuring, a high-wire act full of politics and tactics that several times looked like it might fail. The partnership bought 18 per cent of the Hamilton steel company in bankruptcy court for $27.3-million.
One month later, that stake is worth almost $100-million, and he thinks it will be worth a lot more once the new Stelco proves it's much better than the old. Investors will get a taste next week when the company reports its first set of post-bankruptcy financial results.
So far, it looks like the trade of the decade, but outside of Bay Street, almost nothing is known about the man behind it. Mr. Boland, 41, whose official title is chief executive officer of West Face Capital, has stayed almost completely out of the public eye, until now.
The Stelco play, it turns out, is a pretty good illustration of an investing style that's worked. The hedge fund says it has 25-per-cent returns, compounded annually, since it began in 1998 (the figure is unaudited), while running, on average, about $400-million during that span.
. Boland waited tables in the mid-1980s. One evening, the place was full of big Canadian financiers raising money for the University of British Columbia's portfolio management foundation, which lets finance students learn by managing millions of dollars. For a computer geek who had dabbled in the stock market, the idea clicked, and he went off to Vancouver in search of a degree in computer science and finance.
But if investing were as simple as building spreadsheets, the Forbes billionaires' list would be full of mathematicians. It's as much art as science, and the Stelco case turned out to be a fine, though unusual, example of the art. Dozens of investors, including Mr. Boland's friend and former trading partner Roland Keiper, anointed "The Smartest Guy on Bay Street" in 2004 by Report on Business Magazine, calculated that Stelco's existing equity still had value, even in bankruptcy protection.
The arithmetic said they were right; tactically, they had it wrong. "What was clear to everybody was there was a massive increase in enterprise value," Mr. Boland says. But he and his partners -- Tom Dea, a former Onex deal man, and Peter Fraser, who had been a senior guy at BMO Nesbitt Burns -- figured the shareholders were playing a game where the rules were stacked against them.
"We said, we have two choices. We can get involved in the [old] stock -- and then we've got a butter knife and everybody else has got an Uzi," Mr. Boland says. "Or we can just go in through the official process" and bid to buy Stelco's new equity in the restructuring.
Few of West Face's investments are as high profile as Stelco, but many of them are just as hairy. The firm bought convertible debt and ultimately became a large shareholder in Saskatchewan Wheat Pool after it ran into financial trouble in the early part of the decade, reasoning that control of the company would have to be wrested from farmers (it was). "It was completely off the radar screen. I honestly think we were the only guys paying attention to it who wasn't a bondholder," Mr. Boland says.
The firm also made a killing by buying CP Ships stock when it plunged in an accounting scandal. They hired a shipping consultant to go through CP's fleet -- "they don't quote ships on the Internet" -- and learned the entire company was worth less than its boats, even though there was an international shortage of cargo ships. Sure enough, CP was taken over last year.
A lot of people expect something similar will happen to Stelco as the global steel industry consolidates. If you go up against the smartest guy on Bay Street and beat him, do you get to claim the title?
And then there is Talisman
West Face established a stake of 10.8 million Talisman shares last quarter, giving the hedge fund about 1 per cent of Talisman. At the same time, Ontario Teachers’ Pension Plan increased its stake by 12.3 million shares to 17.4 million, which represents 1.7 per cent. The stakes were revealed in regulatory filings this month, but had not yet received widespread attention before a Streetwise report late Friday.
To be sure, Ontario Teachers is a long time Talisman owner. But the fund also has an intriguing connection to West Face – the two agitated for something to happen to boost shares of Petro-Canada in the period before that oil producer was sold to Suncor Energy Inc
Wat mij opviel was:
Westface pikt 'distressed' companies uit.
Roger Ramshaw, XEL's Bestuursvoorzitter is sinds Sept. vorig jaar ook directeur bij Talisman/Sinopec.
I say no more.
Z. te N.