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Eefrit Eve Financial Services	Posted - 2008.03.19 14:59:00 - [1] After a lot of feedback from investors and private counsel, these represent what I feel are the best options going forward. The options for both FIN and FIN-U will require a vote, which I will keep open for 10 days. I will vote the way I see fit with the FIN bonds that I personally own (about 2% of the total), but will not vote with any of the FIN-U bonds that I control as I never personally bought any of them. FIN There are essentially two option open here. One which does not need a vote, which I could implement at will. However I am convinced that the second option is the better long term option here, and so will give investors an opportunity to vote for the alternative if they also feel that way. So the two options are: 1) Instruct the trustees to liquidate the assets however they see fit. This will definately cause a loss to investors but they will get back a portion of their invested Isk at the end of the disposal. I am not sure how much this would be, as I have not been watching the T2 BPO market actively for a while, but my best guess right now is that it would below half based on what I have seen in the last week. The extra security that I personally added to FIN would be forfeit (about 30-40% of NAV at the time it was put in). 2) Reduce the minimum dividend to 2.5% and use any extra Isk above that to re-invest into FIN. While many of the BPOs that FIN holds are not massively profitable now, that may change if T3 requires T2 BPCs, which CCP have hinted at, or if CCP tweak invention back a notch or two. I personally will be voting for option 2, but I urge all investors to decide which option they would be happiest with and vote for that. FIN-U Here also there are really two options available, with the case once again being that one option does not require a vote to move ahead but the other does. 1a) Keep payments at 7% until the end of July 2008 by cannibalising assets. b) After this point drop dividends to zero and re-invest the money into FIN-U until it has reached a point where paying out dividends again does not jeopardise the long term viability of the investment. c) A list will be opened for bond buy backs which will give any investor 2 weeks to list the bonds that they wish to sell at 95% of IPO value. d) Those will then be bought back at a rate of no more than 5% of total investment per month until they are all bought back. This will more realistically be just above 0% and may take years to complete. 2a) Drop dividends to actual profits (closer to 3-4% at present) b) I will use my personal income to try buy back bonds at IPO price as fast as is possible rather than use it to try and bring the dividends up to 7%. I expect that this would be complete in less than a year, at which point all investors would have their full investment paid back. c) I realise some people paid a premium buying from third parties, but that is a risk they took. Everything has always been structured around IPO prices which included any buyback option in the initial investors agreement. I would recommend a vote for option 2, but any investor should only vote as they see fit. If there are any questions from investors I will try and answer them as best I can. I have a list of every single person I ever sold any bonds to and will work predominantly off that, with the odd exception where appropriate. I sincerely wish CCP had not destroyed so much of the market the way they have, and that these sorts of measures were not necessary. I will continue to do my best to rectify the situation with the limited means at my disposal. I will allow some time for discussion before the actual votes are created. Also I will be paying the FIN-U dividends today at the agreed upon 7% for the month of February. Sincerely, Eefrit
EBANK Ricdic Eve-Tech Savings n Loans Zzz	Posted - 2008.03.19 16:07:00 - [2] Why doesn't FIN-U have a close shop option? Seems to be either: * Forfeiture of a few months dividends or * Reduction in interest rate
Eefrit Eve Financial Services	Posted - 2008.03.19 16:17:00 - [3] Originally by: EBANK Ricdic Why doesn't FIN-U have a close shop option? Essentially option 2 is a close shop option for FIN-U, but it is one where I will personally take the hit, and investors will get out with the full IPO value of their bonds. Doing a straight liquidation would mean a significantly higher loss for investors and hence I made a decision not to. Sincerely, Eefrit
Shadarle LI0NS Industries	Posted - 2008.03.19 16:27:00 - [4] Originally by: Eefrit 1) Instruct the trustees to liquidate the assets however they see fit. This will definately cause a loss to investors but they will get back a portion of their invested Isk at the end of the disposal. I am not sure how much this would be, as I have not been watching the T2 BPO market actively for a while, but my best guess right now is that it would below half based on what I have seen in the last week. Ok, getting over the amazingly overvalued state FIN was selling for compared to it's true NAV... How is any investor able to make a true decision if they don't have concrete numbers? Without knowing just how much the BPO's owned are worth there is no way to make an informed decision if it's worth liquidating or not. As you said, you don't know what is going on with the T2 BPO market. From what I've seen some T2 BPO's are selling at higher prices today than 6 months ago, some at 200-400% of yearly profit. So it makes me wonder if you are accurate at all in your predictions. Shouldn't someone with some better knowledge of the situation price out all the assets quickly (shouldn't take more than an hour or two to price out a bunch of T2 BPO's) and then report back?
Ray McCormack hirr Morsus Mihi	Posted - 2008.03.19 16:35:00 - [5] Eefrit, the minimum value of the BPOs may well exceed even your high-end estimations of their value. The market has taken an up-turn recently and some are selling for close to four years' profit. Regarding trustees liquidating the assets. Personally I no longer have any faith in them, if security has indeed dropped by 50% they should have made an announcement or ordered it shored up at least 6 months ago. Nothing his suddenly happened within that time-frame that could account for such a loss. Would you entertain the idea of a third party liquidating the assets? [WTS] Shares \| Secured ISK Loans
Eefrit Eve Financial Services	Posted - 2008.03.19 17:07:00 - [6] Edited by: Eefrit on 19/03/2008 17:10:24 Edit: random grammar and wording Originally by: Ray McCormack Eefrit, the minimum value of the BPOs may well exceed even your high-end estimations of their value. The market has taken an up-turn recently and some are selling for close to four years' profit. Regarding trustees liquidating the assets. Personally I no longer have any faith in them, if security has indeed dropped by 50% they should have made an announcement or ordered it shored up at least 6 months ago. Nothing his suddenly happened within that time-frame that could account for such a loss. Would you entertain the idea of a third party liquidating the assets? Ray, I could very well be incorrect on the value of the BPOs, but I do not think it will be possible to value them accurately in an unstable market. That is part of the problem in that it could be the low point in the market right now, which would make selling now a poor choice if it turns out to be (of course I can't show this to definately be the case). I have no problem with a third party liquidating assets if it is agreed to by a shareholder vote. I would however only propose that vote if I thought the third party trustworthy in the first place. There are quite a few people that fit that bill that shareholders could choose between if option 1 passes. Regarding the trustees, I think you being unfair on them. Their mandate was to make sure that there was enough security before any expansion took place and to prevent me from having access to the BPOs. That they definately did do, to a greater extent than their mandate at time (which annoyed the heck out of me) - the last time there was an expansion, to be safe they had me have the security at 140% rather than the required 120%. They also had no mandate to ask for assets to be shored up at all and could only lock me out and liquidate the assets if they believed that was the best course of action. I do not believe at any point in time that was a good option for the investors and hence can't point to any poor decisions that the trustees made given the information available at the time. Of course hindsight is a wonderful thing, and there are many things I would have done differently having seen the future path available at that point. I will not however second guess decisions made in the past based on the best available information at the time (I'm not implying you are saying I should Ray). Regards, Eefrit
Eefrit Eve Financial Services	Posted - 2008.03.19 17:13:00 - [7] Edited by: Eefrit on 19/03/2008 17:14:56 Edit: added comment on market prices Originally by: Shadarle Shouldn't someone with some better knowledge of the situation price out all the assets quickly (shouldn't take more than an hour or two to price out a bunch of T2 BPO's) and then report back? I am more than happy to have Ray do this if he would like. It should be made clear though that nobody can be sure what selling such a large amount of T2 BPOs in a relatively short period of time would do to the market prices for them. /Eefrit
Ray McCormack hirr Morsus Mihi	Posted - 2008.03.19 17:25:00 - [8] Should Option 1 for FIN pass I would recommend an immediate stop to dividends, but for BPOs to be maintained in production while they are liquidated over a period of time, the profit from which to be used to shore up any difference between bond value and liquidation value. Regarding the possibility of a third party liquidating the assets, I would like to put myself forward. I have a vested interest in ensuring the maximum liquidation value is achieved, and my knowledge of the Tech II market from valuing collateral for the BMBE stands me in good stead for this. With regards to trust, I don't see that being an issue. While I may pass the grade to handle such assets, it is still not necessary. All I would be is a third-party in organising contracts to be set by you or the trustees to the highest bidder, pending production cycles. [WTS] Shares \| Secured ISK Loans
Eefrit Eve Financial Services	Posted - 2008.03.19 17:27:00 - [9] Originally by: Ray McCormack Regarding the possibility of a third party liquidating the assets, I would like to put myself forward. Should option 1 pass for FIN, I would be more than happy with you handling the liquidation, pending shareholders agreeing to the same. /Eefrit
Ray McCormack hirr Morsus Mihi	Posted - 2008.03.19 17:28:00 - [10] Originally by: Eefrit Originally by: Shadarle Shouldn't someone with some better knowledge of the situation price out all the assets quickly (shouldn't take more than an hour or two to price out a bunch of T2 BPO's) and then report back? I am more than happy to have Ray do this if he would like. It should be made clear though that nobody can be sure what selling such a large amount of T2 BPOs in a relatively short period of time would do to the market prices for them. That's a pointless exercise in my opinion. I could give you a low estimate based on a year's production profit, but I assume you are already working with those figures. With regards to the time-frame for selling off the BPOs, I suggest 6 months to avoid doing exactly what you say. Some investors may have to wait for their capital to be returned, but it's a fair price to pay to avoid the loss. [WTS] Shares \| Secured ISK Loans
Shadarle LI0NS Industries	Posted - 2008.03.19 17:30:00 - [11] Edited by: Shadarle on 19/03/2008 17:30:30 a
Eefrit Eve Financial Services	Posted - 2008.03.19 17:32:00 - [12] Originally by: Ray McCormack Originally by: Eefrit Originally by: Shadarle Shouldn't someone with some better knowledge of the situation price out all the assets quickly (shouldn't take more than an hour or two to price out a bunch of T2 BPO's) and then report back? I am more than happy to have Ray do this if he would like. It should be made clear though that nobody can be sure what selling such a large amount of T2 BPOs in a relatively short period of time would do to the market prices for them. That's a pointless exercise in my opinion. I could give you a low estimate based on a year's production profit, but I assume you are already working with those figures. With regards to the time-frame for selling off the BPOs, I suggest 6 months to avoid doing exactly what you say. Some investors may have to wait for their capital to be returned, but it's a fair price to pay to avoid the loss. I agree fully with that, as the only real way to value them is to sell them. Selling over 6 months would imho be the most logical option as well, but according to the agreement that is up to the trustees to decide. /Eefrit
Kane Portnoy Dragon Clan Guardian Federation	Posted - 2008.03.19 17:50:00 - [13] Hi, I am owning just a little amount of FIN-shares (5k shares) at my alt-corp. so my question is, how long, do u think, does it take to push back FIN dividends from 2.5% to 4%? Because if this 2.5% will stay for a longer period of time, it would make more sense to me, to get my money to ebank, where i get about 3% with all-time availability. But if it is possible for you to say something about that time, hanging around with at least 2.5%, it would help me to calculate and maybe invest into more shares.
Ray McCormack hirr Morsus Mihi	Posted - 2008.03.19 18:01:00 - [14] Originally by: Kane Portnoy so my question is, how long, do u think, does it take to push back FIN dividends from 2.5% to 4%? At Eefrit's estimated evaluation of a 50% liquidation you could assume 50/1.5, 33 months. But that simple sum is flawed in so many ways. The extra ISK would need to be re-invested in the very assets that have caused the problem. And there is no telling what CCP could do in the future. The problem could be even further aggravated, which is more likely than CCP reverting back to the perceived ISK printing conditions of yesteryear. [WTS] Shares \| Secured ISK Loans
Ray McCormack hirr Morsus Mihi	Posted - 2008.03.19 18:07:00 - [15] Originally by: Shadarle Come on. I would think nearly anyone could value the BPO's at 1 year, then do a quick search of past BPO sales on the forums to see if they have gone for more or if similar items have gone for more than 1 years value. If so, you could make a proper valuation that will be fairly accurate. Lets assume we have a correct yearly profit figure of 250b on the BPOs (2.5% dividends). Lets assume they are all decent BPOs, nothing trivial. Perhaps 1.5 years would then be a better estimate, closer to recent sales. This brings the figure to 375b, 25b short of capital invested. Originally by: Shadarle And remember, if it takes 6 months to sell the BPO's off then you're tying up all that money for 6 months. Valuing at 4% that is ~25%. So by holding the BPO's for longer you have to at least make ~25% more or it wasn't worth the time waited. Of course that would need to be evaluated, but you'd never be able to tell for sure. 25% may well be possible, though, but it's something that would need to be measured as the liquidation is in process. [WTS] Shares \| Secured ISK Loans
Dal Thrax Multiverse Corporation Cosmic Anomalies	Posted - 2008.03.19 18:15:00 - [16] I think FIN investors need a list of assets. If FIN is to be a going concern the investors will need to know how much of the asset value represents capital goods and how much represents "good will" of a going concern. Dal Originally by: HEXXX In all seriousness; I think I made a miscalculation originally. . . We either need to fix this or fix our advertising.
4rc4ng3L Soldiers of the Empire	Posted - 2008.03.19 18:17:00 - [17] I am relieved to see a step toward a solution. As a FIN-U share holder i would lean more toward option 2. I am glad that u are not doing a straight liquidation as i would rather not take that large loss. I'm curious as to what the other investors have to say however. ------------------------------------------ - To Jumanji, or not to Jumanji...... -
Eefrit Eve Financial Services	Posted - 2008.03.19 19:21:00 - [18] Ray, the FIN invested amount is 250 Bill Isk. FIN-U has about 130 Bill Isk invested in it at the moment. Originally by: Dal Thrax I think FIN investors need a list of assets. If FIN is to be a going concern the investors will need to know how much of the asset value represents capital goods and how much represents "good will" of a going concern. You are free to wish that, however the investors agreement clearly stated this would not be the case. It was clearly put that if you do not trust the trustees to make those decisions for you then you should not invest. I do not believe there is such a thing as goodwill value in Eve, as there is no legal framework to back it up with. Hence I only use capital value here. /Eefrit
Ray McCormack hirr Morsus Mihi	Posted - 2008.03.19 19:25:00 - [19] Originally by: Eefrit Ray, the FIN invested amount is 250 Bill Isk. FIN-U has about 130 Bill Isk invested in it at the moment. Why do FIN dividends add up to 4% of 400b? This makes things a little simpler though. [WTS] Shares \| Secured ISK Loans
Eefrit Eve Financial Services	Posted - 2008.03.19 19:30:00 - [20] Originally by: Kane Portnoy Hi, I am owning just a little amount of FIN-shares (5k shares) at my alt-corp. so my question is, how long, do u think, does it take to push back FIN dividends from 2.5% to 4%? Because if this 2.5% will stay for a longer period of time, it would make more sense to me, to get my money to ebank, where i get about 3% with all-time availability. But if it is possible for you to say something about that time, hanging around with at least 2.5%, it would help me to calculate and maybe invest into more shares. Kane, I honest can't tell you as it depends largely on how soon the market corrects, both in terms of CCP changing various things as well as in people that are selling below cost currently exiting the market. Also if T3 is implemented within the next year the way CCP have hinted it will, that would also change things significantly. Assuming nothing changes at all and the market stays the way it is now, I would give it something like 18-24 months to recover to full value. Regards, Eefrit
Eefrit Eve Financial Services	Posted - 2008.03.19 19:32:00 - [21] Originally by: Ray McCormack Originally by: Eefrit Ray, the FIN invested amount is 250 Bill Isk. FIN-U has about 130 Bill Isk invested in it at the moment. Why do FIN dividends add up to 4% of 400b? They shouldn't add up to that. They have always been based on 250 Billion, so I normally pay out 10 Billion Isk = 4% of 250 Billion. /Eefrit
cosmoray School of Applied Knowledge	Posted - 2008.03.19 19:36:00 - [22] Erefit, how can you claim investor statements and protocol when you ignore your own gaurantees. FIN-U is a bond that you GUARANTEED. As I see it if you want to quote investor statements, IPO set ups, prior agreements you therefore are responsible for paying FIN-U dividends until July then offering buyback at 95%. I don't see how you have any other options, as that was your 'word'.
Ray McCormack hirr Morsus Mihi	Posted - 2008.03.19 19:44:00 - [23] Originally by: Eefrit They shouldn't add up to that. They have always been based on 250 Billion, so I normally pay out 10 Billion Isk = 4% of 250 Billion. I think the last time I checked I must've added up overlapping emails then. But you're right. Originally by: cosmoray I don't see how you have any other options, as that was your 'word'. Yes he does, a bond holder vote. Which, oh wait, is what he's done. And given the option of keeping his word. Stop looking for more than is there, your drama bombs are unwelcome. [WTS] Shares \| Secured ISK Loans
Eefrit Eve Financial Services	Posted - 2008.03.19 19:46:00 - [24] Originally by: cosmoray rabble rabble rabble Seeing as you are non-shareholder alt, I am not responsible to answer anything at all from you. If your main is a shareholder, at least have the guts to post with him/her. /Eefrit
cosmoray School of Applied Knowledge	Posted - 2008.03.19 20:14:00 - [25] My drama bonds aside, I have some question for the MD forum. IMO both votes don't look particularly favourable. Option 1, keeps paying dividends until July then a progressive buyout that return investors money by May 2010 (max 5% per month). Option 2, no dividends but payback in around a year. Q: If you launch a bond, what is the definition? As I understand it, it is a guarantee to make a fixed payemnt schedule, and then repurchase the bond at full price on a fixed date. Q: What is definition of an IPO Investment in a company/corp that assumes a level of risk. May enjoy higher dividends than expected or lower, but that is the implied risk. I don't understand that if you launch a bond, how you can change the payment rules set up? You stated you have a personal fortune of 600B, why don't you buy out the bond? hardly a major hit to your capital. How does this effect bond launches in future? What would be reaction if Ebank wanted to renegotiate terms of their bonds (BTW, I don't believe they would, just an example)? How can I/we invest in a bond in the future? Is there now no such thing as a fixed bond in Eve, if someone with a good reputation wants to change rules ona FIXED bond?
D'Tann Phoenix Industries Sylph Alliance	Posted - 2008.03.19 20:42:00 - [26] I am going to reread the shareholder agreements later but, I could have sworn that both FIN and FIN-U had scheduled buybacks for bond maturity?!
Marcus Baltar Savaran Zhayedan Spah	Posted - 2008.03.19 20:49:00 - [27] Originally by: Eefrit You are free to wish that, however the investors agreement clearly stated this would not be the case. It was clearly put that if you do not trust the trustees to make those decisions for you then you should not invest. While I hate to agree with them, it also clearly states in the FIN investors agreement; "1.7 As a disinvestment option, we will set a buy order with the EGSE for 1 Bill Isk, or 5% of the invested capital (whichever is the greater) each month. 1.8 The buy order will be for 95% of the initial value of the shares (i.e. 9,500 Isk)." and; "4.1. A change to the interest rate is only allowed subject to an offer to buy back all bonds from any investors that choose to cash in their bonds rather than accept the change." Personally, I would like to see FIN and FIN-U continue. As to which option to choose in a FIN vote; I would like a statement from the "trustees" of FIN as to the current value of the security held, and who it actually belongs too in order to make an informed decision. For example, how can you be offering a 2.5% dividend if in the previous breath you are stating the bonds are worth only half their original value. Now the FIN-U vote options; Option 1 seems to be what was originally promised with FIN and is now having alternatives proposed. Option 2 seems a bit strange to be saying that it could be paying a reduced dividend that FIN cannot. Of course, there is the original launch thread of FIN-U where there is no mention of the "guaranteed 7%", so I feel that 3-4% is better than nothing until I get the original launch price back Decisions, decisions I sympathise with the position you are in, appreciate and applaud all that you have accomplished with FIN and FIN-U up to now Please do not stop now. Player Stock Exchanges; Eve Galactic Stock Exchange (EGSE) & Real-time EVE Stock Exchange (RESX)
FastLearner Fury Holdings Brutally Clever Empire	Posted - 2008.03.19 20:49:00 - [28] Not sure a bout FIN-U, but here's a few things from the FIN launch document: "After the first 3 months of operations, we will create a thread where investors can post on a waiting list to have their shares bought out by EFS under the following conditions: 1. A buy order will be placed for a minimum of 1 Bill Isk or 5% of the invested capital (whichever is the greater) with the EGSE every month pending the other conditions." So there should already be a thread for FIN customers to register to sell at 95%. Contrary to what is stated in the OP, the obligation was very clearly to buy back 5% of shares per month (if requested) at 95% of IPO price. "4.1. A change to the interest rate is only allowed subject to an offer to buy back all bonds from any investors that choose to cash in their bonds rather than accept the change." Strangely, this clause appears to have been forgotten in the OP. I'd advise investors to vote in favour of reduced dividends - then request their shares be bought back. I'd assume this would be a "genuine" buy-back, i.e. at 100% of IPO value - as no lowered value is stated in this clause, and clearly it would be ridiculous for that offer to mean any arbitrary value could be chosen.
Eefrit Eve Financial Services	Posted - 2008.03.19 20:56:00 - [29] Originally by: Marcus Baltar ...how can you be offering a 2.5% dividend if in the previous breath you are stating the bonds are worth only half their original value. Marcus, there is a difference between what a BPO can return per month and what it would sell for. I BPO that makes say 500 Mill Isk a month may only sell for 7 Billion Isk (which would then be its value). /Eefrit
Eefrit Eve Financial Services	Posted - 2008.03.19 21:05:00 - [30] Originally by: D'Tann I am going to reread the shareholder agreements later but, I could have sworn that both FIN and FIN-U had scheduled buybacks for bond maturity?! Neither of them ever had scheduled buybacks. They are what perpetual bonds, which do not have to have a maturity date. There are a few examples like this in the real world but they are the exception to the rule, which explains why most people assumed they had a maturity date without checking on it. /Eefrit

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