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Woodford Patient Capital may fire Woodford

Woodford Patient Capital may fire Woodford – this morning the trust made the following announcement –

The Board of Woodford Patient Capital Trust plc (“WPCT” or the “Company”), as stated in the announcement on 28 June 2019, has been closely monitoring the situation at Woodford Investment Management Limited (the “Portfolio Manager”) and remains focused on preserving the value of WPCT’s portfolio and protecting the interests of shareholders in WPCT.

The Board has been working with the Portfolio Manager to assess the funding requirements of its investee businesses and to reduce borrowings which, as at 25 July 2019, were GBP117.4 million equating to a gearing position of 15.95 per cent. of Net Asset Value. The Board has also held preliminary discussions with select management groups that have approached the Company regarding the ongoing management of WPCT.
The Board continues to monitor and assess all options available to it. Therefore, whilst the Board remains confident in the Portfolio Manager’s commitment to WPCT and the current day-to-day management of the portfolio, the Board intends to engage with a broader range of third-party managers in order to undertake a full assessment of all potential management options, which may or may not lead to a change in the Company’s management arrangements.

The Board will update the market in due course, as appropriate.”

[The net borrowing figure is much better than we thought, suggesting that the trust has been busy selling down its listed investments. As we have discussed before. we think that firing Woodford Investment Management may get Woodfortd Patient Capital off the hook when it comes to the outstanding £45m commitment to Proton Partners. This makes a lot of sense, therefore.]

It also seems that Neil Woodford has personally sold 1.75m shares in the trust (60% of his holding). The explanation given was that he needed the money to fund a tax bill. He still holds 1,251,532 shares or 0.14% of the issued share capital.

[Given the vast amounts of money that Neil Woodford has made from Woodford Investment Management, it seems strange that he was forced into a position of having to sell a large part of his WPCT stake. It looks to us as though he is already severing his ties with the fund.]

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