The £205 million Ashmore Global Opportunities trust has warned that its shareholders should expect a ‘material reduction’ in its net asset value after the value of its largest holding imploded.
‘This decline is predominantly due to a reduction of approximately 90% in the value of the company’s holding in Odebrecht Agroindustrial,’ Ashmore’s board told investors.
The business, a Brazilian producer of ethanol from sugar cane, represents 13% of the fund’s worth and a loss of that magnitude would equate to a write-down of 11.7% of fund assets.
As recently as October Ashmore claimed that the company was ‘on track to double Ebitda from last year’s levels’.
Ashmore added at the time: ‘Frost in Brazil has affected the harvest somewhat but the company should still produce over 23 million tonnes of sugarcane, compared to 19 million tonnes last year. 'Cap-ex for re-planting and for expansion of agricultural land remains considerable and debt has continued to rise as a result.’
The Ashmore Global Opportunities trust is in the process of being wound down, but it invests in other Ashmore products that also have exposure to Odebrecht Agroindustrial.
Over the past five years the Ashmore Global Opportunities fund has lost 28% while its average peer in the Global Emerging Markets sector has returned 121%.