Evil Knievil: Patience will pay off

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Evil Knievil: Patience will pay off
Master Investor Magazine

Master Investor Magazine Issue 59

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Caribbean Investments (LON:CIHL) has continued its ascent.

With the exception of myself there is no knowledgeable buyer. But insofar as I can I have done my homework. The fact is that this might yield 10p+ by way of dividend a year. The business is probably earning 15p+ per annum and it is highly solvent with tnav of 100p+.

The problem is that the Government of Belize have undoubtedly cheated in the past and still owe (now) USD100m+ to a debt vehicle, Midway Investments Limited, which holds the relevant debt formerly in CIHL. Midway is valued at nil and there is no trade in its stock.

That looks wrong to me since, one day, the GoB will want to raise debt internationally. When that happens, it will be pointed out to them that, failing settlement of the Midway debt, it will either be impossible to raise a penny or the terms will be intolerable.

USD100m is a small fraction of the GoB’s aggregate international indebtedness. Thus, I reckon patience will pay off.

All this hangs over the current share price of CIHL which would surely be well over 50p and approaching 100p otherwise.

There are elections this year (I am unsure when) and my chum reckons that Lord Ashcroft will only tidy up the balance of stock that he does not own once these are over. I am not sure why.

There is very little stock in free float and thus the stock can go down as readily as it can go up.

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