Share Search
Visit the Share Search
Thalassa Holdings exits Corridor Resources investment
9th Mar 2020 09:56
(Sharecast News) - Thalassa Holdings updated the market on its trading on Monday, announcing that it has completed the disposal of one of its 'miscellaneous holdings' it referred to on 2 March.
The London-listed company said it sold its holding in Corridor Resources - now called Headwater Exploration - with a gain of around $0.72m, or 75%, on an investment of $0.97m, including foreign exchange movements.
It first invested in Corridor on 2 May 2019, and was still investing on 13 January 2020 when Corridor announced a reorganisation transaction, and the appointment of a new management team.
"I am very happy to report the completion of Thalassa's successful investment in Corridor Resources," said chairman Duncan Soukup.
"As a value investment, Corridor ticked virtually all the boxes, valued at less than cash when we started buying, no debt, no controlling shareholder, profitable and generating free cash, but with a highly motivated substantial and largest shareholder, in the form of Sir Chris Hohn's TCI Fund Management [at] 19.5%.
"Corridor was a veritable value buyer's dream with an extremely successful cornerstone shareholder with no liquidity."
Soukup said Thalassa's view was that "sooner or later", the "800-pound gorilla" would seek a liquidity event, and fortunately for the company, it was sooner rather than later.
"Whilst clearly pleased by the uplift in the share price during our investment period, we were unhappy with the terms of the reorganisation transaction, which allowed new management and their backers to purchase shares in Corridor at a 30% discount to its book value.
"These terms were not offered to pre-existing Corridor Resources shareholders.
"As we were unable to acquire a significant stake in what was clearly a massively mispriced asset, the decision was taken to divest the position."
The London-listed company said it sold its holding in Corridor Resources - now called Headwater Exploration - with a gain of around $0.72m, or 75%, on an investment of $0.97m, including foreign exchange movements.
It first invested in Corridor on 2 May 2019, and was still investing on 13 January 2020 when Corridor announced a reorganisation transaction, and the appointment of a new management team.
"I am very happy to report the completion of Thalassa's successful investment in Corridor Resources," said chairman Duncan Soukup.
"As a value investment, Corridor ticked virtually all the boxes, valued at less than cash when we started buying, no debt, no controlling shareholder, profitable and generating free cash, but with a highly motivated substantial and largest shareholder, in the form of Sir Chris Hohn's TCI Fund Management [at] 19.5%.
"Corridor was a veritable value buyer's dream with an extremely successful cornerstone shareholder with no liquidity."
Soukup said Thalassa's view was that "sooner or later", the "800-pound gorilla" would seek a liquidity event, and fortunately for the company, it was sooner rather than later.
"Whilst clearly pleased by the uplift in the share price during our investment period, we were unhappy with the terms of the reorganisation transaction, which allowed new management and their backers to purchase shares in Corridor at a 30% discount to its book value.
"These terms were not offered to pre-existing Corridor Resources shareholders.
"As we were unable to acquire a significant stake in what was clearly a massively mispriced asset, the decision was taken to divest the position."