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