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Sain you are far too pessimistic. At the end of the H1 I do not expect the published rates to move more than 50bps. He who pays the piper calls the piper calls the tunes, those RICs valuers will work their magic. However we all know those rates are unrealistic and they should be nearer 5.5% at H1 and nearer 6% at year end, hopefully the bulk of the CVAs should stop by then.
Umeed, I am confident of the management in this. MR is a smart guy, after all he was instrumental in selling DEBS to the PE guys. MR will find a way out, and selling to PE again, hopefully at 120 a share.
No one will pay more than that, since there are a low numbers of PE buyers for such assets out there apart from Brookfield. Those guys usually pay 20% discount to true book value.
I think true LTV is between 70-80% have a look at the annual report, Lakeside has a capitalisation rate of 3.9% and the Trafford centre 4.4%. I think they should be nearer to 5.5% and the rest of the portfolio nearer 7%+ in line with the recent JV deal with Cale St including that dodgy water-fall. RIC’s are a bunch of crooks, though INTU assets are valued similar to some of HMSO’s flagship UK assets, so might be the same valuer.
I do not know why people want to see Intu getting sold and that all cheaply? ... One should be confident of company future and look at things optimistically and logically. If going along with result Intu declared on 20 Feb, here is LTV covenant situation:
If asset value goes down 25 percent (very unlikely) from valuation at 31 Dec 2018, then breach would be of £123 million ... and that would imply debt to asset ratio of 71 percent. That would also mean total asset getting reduced to £6855 million.
Good thing is that, even if that happens, company net asset (asset - debt) would be around £2 billion (or ~ double the share capitalisation value).
So, I do not understand why worry. Just face the anomalies of share market and sleep (carefree). It is not that UK economy is soon going to be same as economy of Ethiopia, neither UK property would become as valueless as Sahara Desert. Share market is such that it has pulled many shares to rock bottom value and then, when things got clear, shares rebounded back. Sooner or later, sense do prevail.