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True Trotsky but positive regardless !
It shows they can get disposals away in the current market and there’s still 6 months to go.
I’m a lot more confident now that they will navigate the cash pinch in Aug-24 !
You're ignoring any debt repayments that might be due on the properties being sold (the retail bond is unsecured).
Very positive update !
YTD disposals of £27.2m on top of cash already held will easily see the bond repaid from existing cash resources if needs be.
Hence allowing the confidence to hold the dividend.
Again a statement that a range of refinancing options being explored with the promise of an update soon !
Expect a relief rally over the next few days; certainly up to the ex-div date of 29-Feb !!
Very happy with that considering !!
Say on the company's website, that 22.2 million of sales are in the hands of solicitors, but still a positive step forward I think.
Latest Dividend 1.2pps. Xd 29 Feb 24 . Paid 5 Apr 24. Rgds, S
Am i reading this correctly, if they have 27 million in sales going through they only need to raise 23 million in some way to fund the bond?
Good news.
In the circumstances I would expect another cut but for me it’s clarity on the bond payment or rescheduling I’m most interested in
I think the time to look at this will be when there is evidence that the company is raising cash to clear some of the debt. I sold several months ago when it was clear nothing significant was happening to reduce gearing. Not sure what covenants are in place but gearing North of 50% is ugly and seems too great a risk to bother considering.
What are your thoughts in terms of outcomes for the share price post dividend announcement tomorrow and why?
Will retaining a dividend boost the share price or has it already been baked in?
It is but plenty of room….think bond a great trade
Keep in mind that the debt is not just the retail bond. There's also £381m of secured debt held by banks. I agree that the bond can *currently* be repaid by liquidating the portfolio, but problems obviously emerge if property prices were to crash or if assets were sold at firesale prices..
£430m is a serious pile of debt for a company of this size!
This a very strong buy-85 offered a bargain
1.won’t default plenty of options to pay this, 700 mil of property on books- bond 50 mil
2.roll the bond ( v unlikely) into a higher coupon ie 12+ and then bond still safe
3.even if co folded (won’t happen) receivers sell the assets and bond repaid in its entirety.
Been buying these from 86.5 down to add to my existing holdings- v happy to keep adding as 6 months investment for 18% upside plus the 2.25% interest, decent in anyone’s book.
@damofarl I stand by every word, it's absolutely right to call out parts of my post sliced out of context.
From that exact same post of mine else could have cut out this part:
"they will surprise everyone with a white knight lined up to come to the rescue and make an offer for the equity."
See the difference? This is why context matters.
CaneToad - I got out with a small profit at just over 30p…. Looking at options to get back in but reading some of your commentary on the bond I’m wondering might that be a safer option with the u certainty? My one observation is that the bond price was fairly stable until the start of the month and it has since been mimicking the SP - any thoughts, thanks
On this board, I hadn't noticed any rough and tumble. Differing views, debate yes. I've not singled you out. I've singled out the hypocrisy of your post.
And I unstintingly question posters who focus in on the messenger, whilst choosing to ignore the message. I got your message - it's unviable without a white knight else it's administration.. What I didn't get was any context as to why you felt such. I prefer to focus on the fundamentals, good or bad here. I don' agree with a great number of the posts/views here, but I find the context invaluable in adding to my understanding/considering things I hadn't considered, precisely because posters give context to those (differing) views. I hope we can focus on the content, the context, not the poster.
Damofarl it's a bit odd that on all the rough and tumble of these boards you've chosen to single out my post and username for your paragraph there.
404x; I don't think that's a fair comment. Canetoad didn't take your post out of context .We all got the jist of your post, the context, that you believe RGL is doomed. By quoting your grand standing end, and asking why, they merely highlighted the tunnel vision view your post holds. Nobody is doubting RGL is in a difficult spot. What you have taken out of context is the difficulties, by totally ignoring the opportunities. Many posters here have questioned the debt/viability. None with such nilhilsm and negativity.
I look forward to the oppurtunity to misconstrue/misquote/take out of context. Your opening post wasn't that oppurtunity.
I said in an earlier post that the bond is a screaming buy - either they raise 50 bars by selling something from their 700 mil property portfolio or in worst case scenario and the co went under(which no chance imo) the receivers would sell property and 100% of the bond is repaid
They are offered @ 85 so 18% odd capital growth plus 2.25% dividend-not bad in my book for another 6 months of waiting-easy money-no brainer
Long the retail bond because it will be repaid as:
- RGL will cut the dividend
- RGL will do an equity issuance
- RGL will use unrestricted cash
- RGL will continue to sell asset to lower leverage and replenish cash level (more a medium term story)
They do need to pay the dividend on rental income but on a yearly basis, so for 2024, Im sure they can wait to pay it until 2025 after year end, say Q1 or Q2 2025.
Can they reduce the dividend? I thought being a Reit commited them to a minimum percent of income (profit??) to be payed out.
@404x: We're both just offering opinions. Opinions can be wrong, but it's simply not true that there's 'no way they'll be able to refinance the bond'. Anything is posssible. It just depends on the price. If the NAV was negative, I'd agree that it's very unlikely they'd be able to refinance themselves, but this is not the case here. You can't read anything from the RGL1 prices re: market sentiment; there's insufficient liquidity. FYI: That's very typical of large parts of the bond market that don't trade on the exchange (i.e. most of the bond market...).
404
It is not RGL choice on the bonds.They have to be repaid in August,just like a loan,unless bondholders agree to extend.
A competent Board and Investment Manager ought to be able to sort this out within 6 months.I have no confidence in either,but I do believe that ARA ought to have the skills and motivation to get RGL stabilised.Preferably kicking out Inglis and the RGL chairman in the process.
@CaneToad you've done that annoying thing some posters do on here and quoted just one part of my post, while leaving out most of it and the context, which gave the implicit answer to your why question.