Millennium Investment Asset Sale Far Above Carrying Value

Millennium Investment and Acquisition Company (“MIAC” trading as OTC:SMCG) has begun realizing proceeds from sale of its minority stake in SMC Global Securities, an Indian brokerage business, at a price significantly above the carrying value in MIAC’s most recent financial statements.

MIAC History

The company came public in 2007 as an India-focused SPAC and purchased 15% of SMC Global in 2008.  The original expectation was that after a few years SMC would have an IPO in the Indian market at a higher valuation.  The IPO has yet to occur and MIAC endured some significant governance weaknesses.  Activist investor David Lesser of Hudson Bay Partners took control through a proxy fight and implemented the following changes:

  • Settled amounts payable to former management at a large discount
  • Sharply reduced overhead
  • Negotiated compensation to MIAC from SMC Global due to the delayed public offering
  • Implemented a new investment strategy focused on Alternative Energy where CEO David Lesser has experience from his other ventures such as Power REIT
  • Acquired a nearly finished biomass plant at a bargain price through a bankruptcy auction.

Insider buying from CEO David Lesser has exceeded $2.4mm in the past two years and he currently owns 30.3% of the outstanding shares.

MIAC Asset Value

As a registered investment company, MIAC publishes a quarterly valuation of its assets:

MIAC Portfolio 033116

Based on 10,859,814 shares outstanding on May 13, the company’s 3/31 Net Asset Value per share was $2.33.

Partial Sale

This week MIAC announced the sale of a portion of its SMC Global Securities holding at a negotiated fair value of US$1.23/share, a price far in excess of the US$0.58/share valuation used in MIAC’s last financial report.  Applying the recent transaction value to MIAC’s remaining holding would boost Net Asset Value per share by $0.79 to approximately $3.12, far above the current share price.

For additional information

MIAC Website with investor presentation

MIAC SEC Filings

 

 

 

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s