ARC Capital Holdings has published its final results for the year that ended on 31 December 2013. While these numbers are very out of date now, they do say that the NAV fell from $0.92 to $0.83 over the year. It made two sales in the year – of Goodbaby and Shaanxi Dade Eucation Development but the pace of disposals has picked up since the year end – selling Ningxia Xiajin Dairy Co. Ltd. for $30.0m, Funtalk for at least $137.3m and Shandong Buchang Pharmaceuticals or $14.9m.
As the company’s dispute over Orient Home rumbles on, KPMG have qualified ARC Capital Holding’s accounts to say that there is no certainty that the loan made against Orient Home is recoverable (now in the books at RMB 250m). The report also says ” The Company’s auditors have also qualified their opinion in respect of the Company’s loan of US$15.9 million to a domestic Chinese strategic investor and a loan interest receivable balance of US$2.4 million as they were unable to obtain sufficient appropriate audit evidence about the timing or amount of estimated future cash inflows to satisfy themselves that the carrying amounts of these two financial assets were fairly stated as at 31 December 2013″.
It is also worth noting that the report says “the divestment of Funtalk has not proceeded as envisaged and due to the complex nature of the transaction”. Later on they say ” The First Tranche of US$12.5 million (proceeds of the sale of Funtalk) to be paid when PAG Capital closes its transaction, Second Tranche of US$25.0 million to be paid on the 20th business day following the receipt of the First Tranche and the Third Tranche of US$99.8 million will be payable 12 months after the receipt of the Second Tranche, except in the event an upside sharing arrangement is triggered.”
Following the resignation of the fund manager in February, the Board is working with the investment manager and a consultant to ensure a smooth transition.
These accounts do not include the recent news on the Jiadeli Supermarket holdback