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Eredene Capital : ERE

Eredene’s interim results for the period ended 30 September 2013 show a fall in the NAV from 17.2p to 13.3p as write downs in the valuation of investments were exacerbated by the falling rupee. The Board has taken steps to cut overheads by employing a new manager (Ocean Dial, manager of India Capital Growth Fund : IGC) in London – cutting head office costs by c£1m per annum (including removing the CEO and CFO). ERE is already in discussions to sell two investments, Matheran Realty and Gopi Resorts, for £3m. Ocean Dial will be incentivised to maximise the disposal proceeds generated by selling ERE’s other assets with a fee between 0.4% and 0.6% of sales proceeds (varying according to the price achieved). If the Matheran and Gopi disposals do not go ahead, Ocean Dial will be incentivised to sell these with fees ranging from zero to 5% of proceeds depending on the sales price achieved but ERE may have to commit additional funds to these projects to maximise their value.

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