14-06-2017, 03:43 PM
(12-06-2017, 11:49 PM)cif5000 Wrote: [ -> ](12-06-2017, 06:33 PM)yawnyawn Wrote: [ -> ](12-06-2017, 06:00 PM)yawnyawn Wrote: [ -> ](12-06-2017, 02:58 PM)cif5000 Wrote: [ -> ](01-06-2017, 09:37 AM)yawnyawn Wrote: [ -> ]The transaction is expected to increase the Group’s earnings per share and net tangible assets per share by approximately 5 cents for the financial year ending 30 June 2017, after taking into consideration adjustments for factors such as net assets, income taxes, and the Greenstreet carried interest.
Book value S$6m
Gross proceeds US29m or S$40m
Gross gain $34m
Less tax and management incentives of about $12.3m
Gain of 5ct or about $21.7m
Not sure what the taxes and incentives for Guggenheim disposal look like? Fair to assume 35%?
For this, you have to refer to the paragraph 3 of the "Proposed Amendment to the Management Agreement" circular entered between K1 and Greenstreet in 2014.
http://www.k1ventures.com.sg/admin/files...202014.pdf
This is how i inferred the management agreement. To keep it simple, upon disposal of any investments, Greenstreet gets a cut on the realized net profits(total distributions + divestment amount - initial capital - threshold level).
1) If the investment managed to compound at 10-15% over the years, Greenstreet will be entitled to a carried interest of up to 10% of the realised net profits
2) If the investment managed to compound >15% over the years, Greenstreet will be entitled to a carried interest of 15% of the realised net profit.
I tried to do some rough calculation for the case of KUH, the initial capital was US$57M and additional threshold was US$41M. Total threshold US$98M.
Based on AR2016, "Total cash and property distributions received from inception are approximately US$223 million at 30 June 2016." Divestment of KUH gives US$29M.
Therefore, capital in KUH managed to compound at ~12% over 13 years. The capital would grow to US$197M if investment in KUH compounded at
10% over 13 years. Greenstreet should be entitled to 10% of US$55M (US$252M less US$197M), therefore ~US$5.5M.
Thank you!
How about Guggenheim? Assuming k1 disposed this at US$220m, how much would the incentive be?
I finally looked at the circular for the 2010 Management Agreement.
http://www.k1ventures.com.sg/admin/files...rcular.pdf
Based on 2016 AR, it was stated that "The Group has received approximately US$35.1 million of scheduled dividends since June 2011. In addition, the Group has received supplemental special distributions of approximately US$3.8 million related to the Preferred Units."
Assume K1 disposed Guggenheim at US$220M, total sum would be US$259M. This gives a return of 17.2% compounded over 6 years.
10% compounded over 6 years would give US$177M. Greenstreet should be entitled to at least 15% of the realized net profit in this case. Actual amount may vary though since they are many confusing subclauses under the management agreement.