Sector: Financial Services.
London Asia Capital PLC (LAC) is principally an investment group focusing on China and other Asian markets. The company was listed on the AIM market of the London Stock Exchange.
Challenge
Since its IPO and various fundraisings totalling approximately £100m, LAC had built a labyrinthine structure of investments and acquisitions which were incomprehensible to all but those who had transacted them. Former directors and senior executives appeared to have enriched themselves at the expense of shareholders, who saw no return on the substantial amounts committed to deals over several years. These shareholders had appointed previous independent chairmen and directors to realise long-hidden value, but the opacity of the group’s portfolio, combined with disagreements among board members, had made progress very slow.
Solution
David Buchler was appointed as independent chairman by shareholders in 2011. He brought in a team led by Paul Bobroff, as Managing Director, to review realisable assets and engage with the group’s main Chinese trading partner and Singapore based largest shareholder. The team travelled regularly to China to discuss strategic opportunities, meanwhile unravelling the web of investments with remaining value, cutting costs and litigating selectively where it was in the interests of shareholder value.
Outcome
The team recovered £15m of funds, not only from Asia, but worldwide. A distribution was made to shareholders, with an offer to buy back their shares. This was widely accepted. The company is left with one principal asset: a 20% holding in a Chinese clean energy company based in Wuhan. That business is undergoing its own restructuring, which was unsurprisingly slowed by being at the epicentre of the Covid-19 outbreak, but continues steadily.