Evil Diaries: The bloodhound reports

3 mins. to read
Evil Diaries: The bloodhound reports

As earnest readers know, I am a hound after explanations that matter. I had taken the view that it would be helpful, perhaps even important, to know what promoted the Italians government’s refusal to pay the E200m+ owed to Rockhopper (RKH) pursuant to the ICSID arbitration. So I got hold of Vigo Consulting who handle IR for RKH and I promptly got a reply from Vigo as follows:

Dear Mr Cawkwell

We conveyed your request for information on the grounds for Italy’s request for annulment. The reason this was not announced is because ICSID proceedings are legally confidential between the parties.

You may however find this attachment of interest (ICSID Convention Rules). If you scroll to page 25, Article 52, it briefly lists the limited grounds on which a party may seek an annulment. While this does not tell you specifically what Italy’s grounds were, you will understand the parameters, none of which could have anything to do with Rockhopper’s own competence in the matter which was one of your concerns expressed.

You may also find this second attachment of interest (ICSID Caseload Statistics). If you scroll to page 16, it shows the statistics on annulment proceedings. You will note very few are ever successful.

I am sorry we cannot disclose the grounds of Italy’s appeal – ICSID does not allow this. I hope Article 52 at least has some use in narrowing the scope for you on the grounds for which annulments may be sought.

Kind regards

Ben Simons

So there you have it. I still think RKH is cheap at 10p, possibly very cheap.


I also asked a very experienced veteran of many floats what he thinks of Logistics DG (LDG) and, although I disagree with his conclusions, hand on his review of matters. I am after all an equal opportunities employer.

Following our chat, I have had a quick look at LDG. They are effectively an investment holding company seeking capital growth through their investments. They are being advised by DBAY, an asset management group based in the Isle of Man. They have recently sought approval to expand the areas in which they can invest, which originally was restricted to logistics. It has an experienced board lead by Adrian Collins as chairman (Ex Liontrust and Gartmore) and including David Facey (ex SP Angel and HSBC Investment Bank) and Peter Dixon ex DBAY. LDG’s past investment performance has been successful as evidenced by its cash pile, which has not been distributed to shareholders. Nor is it management’s intention to do so. Its future fortunes will be entirely dependent on the success of its new investments. It has been nibbling at Findlay Food Group and CoreTech but it still has substantial cash on deposit. It is also buying in its own shares to try and reduce the discount to its net asset value. The market will however continue to discount its cash value as it is being held to fund new investments and, until LDG makes a substantial investment, which the market can assess and be convinced that it will generate future capital gains, the share price will not improve.

Unless I have missed or overlooked an important aspect of its business plan, I would not be an investor in LDG in the current state of the economy and capital markets. There are plenty of other investment opportunities in companies where the assets/ businesses are known and which generate significant and secure income and are likely to increase in value.

So, dear readers, you again have it.


Finally, interest rate rises may start to look as if they are topping out in the USA. Accordingly, I loaded up on gold at $1,640 and have so far been rewarded by a $10 loss.

Comments (1)

  • Nick Sudbury says:

    The positive aspect of LDG is that the high cash weighting should put a floor under the share price and sentiment towards the UK micro caps is so bad that they should be able to pick up some attractively priced investments. However, there is no obvious catalyst for the sentiment to change and you can pick up UK micro cap investment trusts like DSM and RMMC at discounts to NAV of more than 20%, so the LDG discount looks about right, assuming they don’t just wind up the company and return the cash.

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