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The secured lender is in a pickle amid problems involving several investments
Thursday 09 Jan 2020 Author: Daniel Coatsworth

Following news on 9 December that Hadrian’s Wall Secured Investments (HWSL) may wind up after encountering problems with some of its holdings, we think now is to time for shareholders to cut their losses and get out.

Having recently increased its loss provision on two biomass investments from £3.27m to £18.1m, the investment trust said on 17 December that there are likely to be additional costs in efforts to recover some value from these assets.

There is also a risk that Hadrian’s Wall may need to provide additional capital to one of its borrowers. Any problems with the latter getting more funds could expose the investment trust to another material loss.

Shares said to buy Hadrian’s Wall in October 2018 in the belief that it would provide a decent income stream via secured loans. Subsequent to our article it made higher-risk investments in biomass which haven’t played out as expected.

Winterflood says: ‘We suspect shareholders were rightly disappointed that the security on the (biomass) investments appeared to be worthless, despite an update in October suggesting that the situation would not result in a material loss.

‘We are conscious that the portfolio’s realisation may not be a straightforward process given its underlying illiquidity and often complex nature of its loans.’

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