Ann: Net Tangible Asset Backing - 31 Dec'23 & Quarterly Update, page-9

At face value this looks like a share worth acquiring; a company with a NTA of around $4.13 of which some $108m of around $126m will be cash (available cash at Dec 31 of $16m + settlement sum of $92m). To acquire shares around $3 sounds like a deal too good to be true, doesn't it?
But, where to from there, and will you EVER see your discount to NTA.?

When you study the limited detail of the future intentions (distribute nothing but convert to an LIC) & consider the past form of the directors and majority share owner (Leanne Catalan), this does not bode well. In my opinion, anyway.

A few posters above have aluded to lack of transparency and performance in the investment side of things - which atm is just a tiddly $25m. This ais about the same amount when I sold out a few years ago. Back then the gun guru was Michael Glennon - now obviously departed. The new gun guru hasn't impressed to date and has a first class 'job hopping' CV. Check out Linkedin.

Think you are the first group to cry - 'where's the investment thesis?' And lets face it, having this, plus a performance criterion and checks and balances on all investments made is just Biz101. You are not.

In 2021, a group clearly concerned by the above & cheekily calling themselves the 'World's Slowest Strategic Review Activists' garnered together the 5% to lob an extraordinary meeting with the intent of removing Leanne Catalan as a director. They knew she was using ECL as a personal cashbox and that the Chairman was very much in her camp - as he is/was for the entire Catalan family. Check him out, he is front & centre in many of the legal squabbles which this family has been involved over the past twenty years or so. Clearly good at what he does, but I doubt he represents the ordinary shareholder in ECL. Could be wrong and I know nothing about the third doirector.

What one can say is this - what Leanne Catalan wants is most likely what will happen.

So, how did the Extraordinary Meeting to oust LC go? It failed - but as the Activist group reported, 'over 91% of votes cast by shareholders other than the controlling Catalan shareholder group were in favour of her removal resolution'

So ECL reverts to a LIC - one of the older, 'leper style' share structures on the ASX' constantly trading at less than NTA. many have tried to alter that situation and failed. Not saying this will happen at all, but, not only is it theoretically possible, I do know of a situation from around 10 years ago where a dominant shareholder used available cash to buy back shares from isolated, frustrated shareholders. Where there are no buyers, guess who dictates the price? And eventually the great majority of shareholders have gone and the lollypop goes to the remaining shareholder/s. When you have time on your side and the funds are going into your Superannuation Fund, what could be better!

History will prove that the 'World's Slowest Strategic Review Activists' didn't get their review and Leanne Catalan (again) proved herself to be a formidable fighter, unafraid of shareholder dissatisfaction or legal action and intent on keeping ECL under her wing.

It's a definite pass for me because it doesn't at all favour the ordinary retail shareholder.