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"Thus, u cannot say that real valuation of INTU properties has decreased, rather, it is possible that they may have recovered.!
Priceless !!!
The whole of the sector has devalued .Intu arent in a class of their own. When the corporate valuers shave another 10%of values they wont be doing that out of spite
Good news about the 2nd Spanish asset .What they of course dont flag up is the price achieved was well below last summers book valuation
Sain@Vision: ''The whole of the sector has devalued .Intu arent in a class of their own. When the corporate valuers shave another 10%of values they wont be doing that out of spite''
If that is the case than all REITs company share price would have collapsed. So, give me share price collapse of any other REITs company?
For INTU ... Share price gone down from 80 pence to 18 pence in 6 months, that is more than 75 percent.
Actually, share price of most other REITs comany has gone up rather than gone down, so, if their property values has gone down than why their Share price has gone up, rather, should have gone down as What INTU share price had done?
For instance:
Land securities SP has gone up from ~ 750 pence 6 months ago to 950 pence today.
British Land ... from below 500 pence 6 months ago to 576 pence today
Great Portland Estates ... from 650 pence 6 months ago to 926 pence today
Hammerson ... From 210 pence 6 months ago to 252 today (was over 310 in December)
Hansteen Holdings ... From 90 pence 6 months ago to 116 pence today
Shaftesbury ... From 750 pence 6 months ago to 930 pence
And son on. Almost all REIT company share price has gone up in last 6 months but ... :)
Well, what is the mystery? ... Is it only INTU properties got down valued and so much that share of INTU today is selling at below 8 percent of their book value? ...
Asturias shopping centre sold for 290 million Euro. INTU share was 145 million Euros (£123 million). After cost and debt payment, INTU received 85 million EURO (~ £72 million) ... It means, debt and other expenses on INTU share of Asturias was approx 60 million Euros (or ~52 million) ... It also means, just by paying debt from the sale (excluding what INTU got in cash) was approx 1 percent of INTU debt (~£470 million).
Overall, after reducing debt by 1 percent (debt related to Asturias shopping centre, that was ~ 1 percent of INTU total debt), INTU cash pile must have increased by approx £72 million.
INTU Xunadu (spainish property) value is almost as more than Venecia (that INTU already sold) and almost double of Asturias (spain). Once sold, INTU would get more than £250 million from Xunadu (if not more).
Actually, INTU debt on Asturias was £60.5 million.
(Since, INTU only paid £52 as cost, it means, before sale, INTU must have got the debt reduced)
Further:
Venecia was £112.5 million
and
Xanadu is £131.5 million
Once all 3 gets sold, debt reduction would be over £300 million (over 6 percent of total debt), plus whatever INTU received and would receive to increase their cash pile.
Correction: ... Actually, debt figures I posted earlier is not in pounds but EURO.
INTU debt on Asturias was Euro 60.5 million, that is ~ £50.4 million).
Further debt on
Venecia was Euro 112.5 million
and
Xanadu is Euro 131.5 million
Umeed, the reasons why intu share price collapsed while SP of other REITs didn’t are the following:
1. Intu and Hammerson are concentrated on retail properties. Others are more balanced. Other commercial properties are holding value okay. The market is very difficult now only for retail properties.
2. Intu is the most leveraged by quite far. That means that drop in valuations reduce net assets of intu much more .
3. Intu is in danger in breaching debt covenants and not being able to refinance on any decent terms
4. Intu has the highest cost of debt
Generally when the market is difficult, the weakest and most leveraged companies are punished much more.
The Mr Market is not stupid, it prices the intu correctly based on current risks
Intu’s directors are dodgy when compared to HMSO. Umeed needs to compare intu’s BS to HMSO to understand the Ponzi. Most intu assets carry huge debt with complex structures instead of straight forward bond debt. It makes no sense to have dumb loans when you can issue low coupon secured bond.