Dear All,

As per usual, I can only apologise for the delay in bringing this update to the website. I won’t bother making excuses… suffice to say that my personal situation has deteriorated and that knocks-on to the efforts to wrap things up expediently in respect of the various tranches of agarwood with which I am dealing. I have said before that I don’t expect sympathy. Someone had to be “Johnny on the spot” and if not me, then who else? There is, of course, an answer to that question but that’s one for another time.

This missive finds me once again back in the U.K. trying to generate external income to cover the internal costs. This situation of me doing this, as noble as my intentions may have been at the outset, has simply become untenable and so I have been forced to make some hard choices, hence the title of this missive.

Abulia is a symptom of mental abnormalities wherein the patient is absent decisiveness. Whether or not I am suffering from some sort of mental disorder personally, may be a cause for speculation down the line but I have self-harmed (metaphorically / financially speaking) by refusing to make certain decisions, to whit: I have refused to simply lie down and fire-sell assets.

My logic has always been that, done right, better prices can be achieved for our produce. Given how many assets were lost – literally – in the fallout from the Touchwood collapse, to my mind it was essential not to let a market, fully aware of Aequus’ distress, simply walk all over us. Put simply, with the assets lost, the recapture of value and consequential returns to investors was already looking extremely bleak. Better pricing on asset sales would still leave us with considerable losses but would improve the situation.

I still maintain that the formal appointment of a Liquidator would have in all likelihood resulted in a complete nil return to investors. Everything I have done, whether latterly to be judged as competently or otherwise, has been aimed at considerably bettering such an outcome. 

I have documented previously how the initial crusade upon which I embarked was backed by what I now understand to be an apparent misconception regarding the efficacy of the Minnesota inoculation technology. With that misconception now understood and proven – in my view – as conclusively as I am currently able, I am left with the realisation that what I had believed to be fire-sale prices may, in fact, be disturbingly close to the “true” market value of our produce; if such a thing can ever be truly gauged with any sensible level of certainty. 

As previously described a combination of low quality (market consensus) produce and a soft market has left me having to adjust my expectations regarding obtainable pricing and a sensible estimate as to timescale required to see all assets disposed of without devaluing to unacceptable levels. 

I am in the process of putting a final, formal proposal to the Board of the Funds regarding the final closure of the Funds. I am under pressure from them, from counterparties and from regulators to bring things to a close in short order. It’s understandable in the current fund climate. 

Once I have that proposal accepted I will publish it for you all to know and understand but in brief it will be a combination of the following activities:

  1. Completion of sale of oil produced for us by Treedom Group.
  2. Appointment of an independent sales agent (already identified) to dispose of oil produced by Aequus.
  3. Appointment of Third Party producer to process the remaining unprocessed product to then be sold via (2).
  4. See out the result of the claims against Touchwood Forestry Company Limited. 

Treedom should have the remaining unsold stocks dealt with within 4 to 6 months. I hope to finalise item (2) during the course of next week. Ditto for item (3). Regarding the claims, the final appeal paperwork against the Bankruptcy Court’s initial ruling was filed on Monday of this week. It will be 1 to 2 months before we get judgement but unlike the initial claims where no reason for refutation had to be given, even if we lose the appeals I will get a written judgement so that we can see the basis of the failure. Legally, our hand should be very strong but as written previously my experience of Thailand’s legal system leaves me with an opinion of it that is extremely low and I am not holding my breath for a win here. 

And thus we’re into the final stretch for definite this time. Whilst my day-to-day involvement will, by necessity, become less I will be getting regular reports as part of agreements being put in place and will collate and publish going forwards to ensure full management of expectations all round. Part and parcel with that, and as previously promised, I will increasingly be able to start making educated guesses at the likely final outcome… guesses that will progressively converge with certainty until all is complete.

I did mention in a previous update that I have found ways that we can treat our oil to improve its perceived worth in the market. Since we still will have time (given that processing and selling is not an overnight thing) I will work with our new and existing agents to see if we can get at least a portion of the oil modified and assess the outcome. Those experiments will affect how the remainder of oil gets dealt with however I must stress that this will run concurrent and not be allowed to slow progress. In a perfect world I would be trying all of these things to the nth degree prior to making any decisions but, as I said above, circumstances now dictate that I start to admit to what I would personally class as a defeat and move things on without further exploration of alternative options; or anything which would further delay the closure of the Funds. 

I trust everyone understands and will agree that this is now the right course of action to take in the circumstances. As always I would welcome any comments anyone wishes to place on the website whether questions or suggestions and my responses will be visible for all to follow.

 

Kind Regards,

 

 

Mike Simmons.