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Started: WillLackster, 31 May 2024 11:21
Last post: Guitarsolo, 13 Jun 2024 15:00
Chris, there is still time. It depends how it is done and there are many ways for the private investor to be shafted.
Even if there is an open offer / rights issue, I've recently had those and been given a week to raise funds. If your shares are inside an ISA you can get shafted if you either don't have funds immediately available or you can't get more funds into an ISA.
There might not even be an rights issue or an open offer. There could just be a placing by Inglis to his mates for a tasty discount for them. We get shafted as we can't even participate in the placing.
From the private investor standpoint it is worth noting that after the recent National Grid rights issue (where a very large number of us would have parted with cash to buy NG. shares at a discount) there will be many of us who have already used up what cash we had available.
To answer your question, I believe there is still plenty of time. However, it is appalling that RGL/ Inglis have taken this to the wire. It clearly demonstrates a weak position.....
I wonder does anyone know if there is a minimum time needed for a rights issue? Given the 50 odd days to go until the bond is due for repayment do they have time left to do a rights issue or is debt refinancing now the only way to go?
Markets like certainty and they ain’t giving us any of that on the Bond situation
10 days on,less than 2 months to bond maturity,and still not a peep out of the ar*ewipes.
Underwater here but have been slowly adding but this bond situation is a little concerning....
Started: saintly, 22 May 2024 09:03
Last post: broomtree, 29 May 2024 22:42
The clock is ticking on the Bond financing, depending on how and when they sort it, this may become investable again
Thanks. I was thinking around 9% too for me to be interested in rolling over.
Not that I'm expecting it to be offered but probably somewhere between 9% and 10% for 3 to 5 years. But perhaps they'll have some other combination in mind worth considering. Not sure BOE will reduce interest rates before August which I'm sure BOD were hoping for and would have given them a bit of scope to offer lower coupon on extension.
Otherwise I'm content to receive maturity proceeds (assuming they will be able to find the cash) and move into something paying a little less but safer.
What rate would make you extend? and for how long?
As a bondholder I'd be happy to extend - mind you at a lot higher coupon than the current 4.5%.
Started: tickhilltim, 22 May 2024 16:16
Last post: tickhilltim, 22 May 2024 16:16
Shore Capital got a new “sell” rating out.Anyone got a copy?
Started: broomtree, 16 May 2024 19:22
Last post: RT003, 22 May 2024 07:12
Not so good
0.012 unchanged from last payment
My information provider updated it Monday at 0.013 up marginally from 0.012 last payment
So maybe an update tomorrow ? Or this week anyway. Be interesting to see what the dividend will be.
Very hefty buy into the close there over 27k
Fair enough and thanks
Dividend Max had it for yesterday for some reason
Started: Laughton, 17 May 2024 10:59
Last post: Laughton, 17 May 2024 10:59
Not all doom and gloom
https://www.cityam.com/landsec-workers-returning-to-offices-in-london-boost-landlord/
Started: MattTheBrave, 22 Apr 2024 15:00
Last post: broomtree, 9 May 2024 18:23
Well done Matt, nice one ☝️
Out today at 25.09p - a 90% return in a couple of months will certainly do me!! :-). Good luck to all longer term holders here - I hope there's a longer term recovery story for you!
Matt - indeed ‘when to exit’ is the key, too often greed gets the better of us, I first got out at around 97p and was fortunate, I re-entered in the mid 20’s but just over 30p the warning lights came on again so I got out. This thing is far too volatile and and a lot of risk built in, so good fortune with your plans
Hey Broom - absolutely agree - I certainly wouldn't be buying here, it's more about when I exit!
Matt - good call but you’re a braver man than me on this one. I still want some clarity on bond before buying
Started: Pangloss73, 8 May 2024 19:48
Last post: motorhead, 9 May 2024 16:13
OK. Close, but no vape. I'm forgetting that a £75m raise would allow £25m of secured loans to be paid down. Although raising debt at 9%+ to pay down debt at 3.5% would be pretty desperate - unless these loans were close to breaching LTV coventants. Not entirely sure of how the existing hedging on the floating rate loans would apply, assuming that these alone were paid down. However, as a theoretical exercise...
3.5% on £25m is £875k of interest saved and which can be added to the dividend distribution. So, raising £75m of new debt leads to dividend cuts of of 24% for a 12% interest rate, 33% at 15% and 17% at 9.7% - all rounded up.
Raising £75m with a 3:2 equity issue would (could) result in a 55% dividend cut to those who do not subscribe, but a 12.6% increase for those who do.
The above, and previous post, assuming a current annual dividend rate of 4.8p per share.
Https://www.costar.com/article/2142266678/martley-raises-%C2%A3250-million-for-uk-lending-strategy
12% on £50m is an additional £3.75m annual interest payment on top of the £2.25m currently being paid on the bond. The extra is the equivalent to a 15% cut to the dividend. A 15% rate is an extra £5.25m to the current interest paid, which is equivalent to a 21% cut to the dividend.
If the 'raise' is £75m then 12% interest rate equates to a 27% dividend cut, and a 15% rate gives a 36% cut.
SONIA is currently 5.2%, so 9.7% gives a 10% and 20% reduction respectively. A possible gamble if interest rates are expected to 'not rise' from here.
If there was a 1:1 equity raise ((£50m) then a shareholder who did not subscribe would see a 45% dividend cut. A shareholder who did fully subscribe would (ok - could) see a 9% increase to dividend received. The £2.25m saved can be added to the cash available to pay the dividend.
Nice little article from Oliver Shah available on the Martley website: https://www.martleycapital.com/shah-on-property-office-opportunists-need-chutzpah-and-access-to-cash/ It's a couple of weeks old, but evidently it's not just Martley that sees opportunities in the "beaten-up office market". Well worth a read if you're feeling a little nervous about your holdings.
Also contains a great quote on the two golden rules for property PLCs - Rule one: don’t ever do a deeply discounted rights issue. Rule two: don’t forget rule one.
Started: Pangloss73, 22 Apr 2024 18:17
Last post: tickhilltim, 24 Apr 2024 10:44
Very strange timing for the sale.They have watched the share price slide for a couple of years.Majik are very shrewd operators.They could not sell if they had received inside information on any potential share issue.Declining to receive information is a common practice- but,by inference,can convey something is going on.It would be normal to consult your largest shareholder if a rights issue is being planned.They may be selling because they anticipate a further dilutive share issue and want to reinvest the cash back in RGL.Or they may just not see the prospects for the shares improving in a realistic timeframe.No doubt it will soon be obvious.
I think as a non uk entity you have to disclose within 4 day's or as a UK entity within 2 days under FCA rules. Like you say interesting to see the share price holding up while this level of selling so I assume a deal was done with another interested party.
RNS indicates that Majik's holding is now 4.71%, whereas it was 9.13% back in September 2021. Whilst that's not a ringing endorsement of the company (!), it's surprising that the share price seems to have held up well during the selling (unless the bulk of the selling pre-dated the recent small bounce). More Majik selling to come or will they be content at this level?
Started: MasterRSI, 19 Apr 2024 16:30
Last post: motorhead, 19 Apr 2024 19:48
If REIT shares are held via a pension or ISA account then PIDs are paid gross. If held directly or in a taxable dealing account then they have 20% tax deducted - only the PID element, though, any ordinary dividend element is paid without deduction of tax.
No, I got 1.2p per share.
It seems the 1.20p is taxable of 20% tax
So 100,000 shares instead of £1,200 you get £960 yes £240 is discounted as tax
Usually, when they announce the dividend other companies are already taxed.
Started: tickhilltim, 16 Apr 2024 08:38
Last post: hghotshot, 18 Apr 2024 15:18
PG73, it is refreshing for an old-fashioned chap to read a post which does not contain extreme language surrounding the certainty of the imminent demise of RGL. Do you remember the embarrassing exchange here on whether RGL could continue as a going concern? There is no realistic likelihood of any such catastrophe. There are certain short term challenges to be dealt with. In particular, the retail bond situation needs to be addressed. It needs to be clearly understood that RGL is not looking for new money but replacement of existing financing. This can be readily achieved in a number of ways. The worst outcome here is a higher interest rate for the entire £50 million. Clearly, this would be regrettable (implying a small reduction in income available for dividends) but far from catastrophic. One should not forget that as at the year end 2023, there was £30.2 million unrestricted cash.
Concerning the LTV target of 40%, this is only a target. Nothing happens if this is exceeded. Loan covenant LTVs are more consequential, in particular the Santander financing where there is the real possibility of breaching the 50% LTV limit when the limit is reduced to this level in June. However, there is no significant likelihood of draconian action by any lender, providing the business continues to generate significant cash to make interest payments.
HG - you're old-fashioned! However, I totally agree that the leasing news is very encouraging. In normal circumstances, I don't think this would be worthy of an RNS as it's more 'business as usual'. Unfortunately, in the unusual situation RGL is in with so many concerns (some real, some mischievous) it might be considered as potentially price sensitive and therefore subject to RNS.
I think the Martley stake is the big news (great find Chris). I also love the quote from their CEO back in January - when asked about opportunities on the public market, he stated "There are companies that look just absurdly cheap, particularly those that are externally managed that, usually unfairly, are just hated by the market." I think the stake he subsequently built in RGL shows exactly what he thinks of the valuation. Sometimes it's good to be old-fashioned!
Call me old-fashioned, but I consider the RNS to be very encouraging (leasing of additional 30,000 sq ft, even if it is in Glasgow?). I do not share the view that RGL property values are over-stated (what evidence is there of this?), nor do I consider that RGL is a desperate seller.
Does look slightly desperate to be issuing a RNS just about taking on tenancies of one building in Glasgow.
More BS. I suppose letting in line with latest estimated value is a good result for these boys.Portfolio value still overstated for a desperate seller imho.
Started: chris1979, 11 Apr 2024 11:51
Last post: KAF444, 11 Apr 2024 17:31
Thanks Chris.
Yep. Martley are probably either looking to provide finance, or to take over the management of RGL themselves. But whatever happens will be dilutive to shareholders in one way or another: higher interest payments on alternative finance means less cash available for the dividend.
For each 1% interest above the current coupon on the bond, £500k less cash is available to pay the dividend. Assuming a rather generous 8% interest rate, that's a 7% reduction on the current dividend (on an annual payout of 4.8p). 10% interest is an 11% reduction. etc.
June - yes 'June' - is getting closer.
Martley are yet another small- time team of chancers trying to make a name for themselves.Not a lot different from the current team,but without the backing of ARA.Like the rest of the world they could probably run RGL better than the current load of muppets.Or looking to elbow into a fee- earning role.Its an obvious asset- strip for a well- funded client.
Chris, Thanks for taking the time to post that link to Martley. Makes very good reading. Rgds, S
Thanks for this'
"The building of a stake by Martley, the company says, is a reflection of its belief in the long-term strength of the regional office market and that an increased desire by employees to work near home will reduce the level of long-distance commuting". That's my perspective too even though it may be reflected in more working from bed(read home)...
They seem to think they have a better refinancing plan. We will see.
Started: Sandaya, 10 Apr 2024 09:50
Last post: broomtree, 10 Apr 2024 18:12
House Brokers are something I struggle to believe by the very nature of their position. Whilst I appreciate things haven’t been easy, the debt on the bond side should have been sorted well ahead
Edison just seem to be clear there will be a rights issue or a further debt issue. Just a shame the management here are leaving it so late
Www.edisongroup.com%2Fresearch%2Fperforming-as-expected-ahead-of-refinancing%2F33446%2F
/www.edisongroup.com/research/performing-as-expected-ahead-of-refinancing/33446/?j=197578&sfmc_sub=12780302&l=716_HTML&u=5795183&mid=536001663&jb=1
Started: saintly, 5 Apr 2024 12:35
Last post: saintly, 9 Apr 2024 06:07
Morning Krusty, Good to see we are still treading the same path albeit a bit of a bumpy one with RGL at the moment. But then again whoever said dealing in shares (especially RGL) would be easy!!!! As long as the dividends keep coming then happy to keep collecting. Continued good fortune to you and may your gains exceed your losses. Rgds, S
Thanks saintly, and the same to you. Pile those dividends high!
👍
Dividend day is once again upon us. Pleased to say that all monies are now in my accounts. Continued good fortune and patience to one and all. Rgds S
Started: MrG123, 27 Mar 2024 17:06
Last post: broomtree, 3 Apr 2024 21:34
Yip roller coaster or what looking for some stability and clarity on Bond repayment before getting back into this
LOL! Yeh someone commented here that the 20p=>13p tank, following the bizarre RNS a couple weeks ago, was on no new news whatsoever, and therefore it should trend back to 20p. Et voila! And now: an ER which says.. nothing everyone didn't know already. How many of us are kicking our own behinds about not doubling-down at 13p!?! Some talking head - was it ware Buffet? - said investors have enough brains, but not enough balls...
Last week everyone thought RGLs days were numbered. Now it's climbing 10% in 1 day. Easy money if you know how to play the game.
Started: KAF444, 27 Mar 2024 10:34
Last post: KAF444, 27 Mar 2024 10:34
Now I can see light at the end of the tunnel SP should start going back up .
🤞
Finally getting somewhere. £22 million under offerand another £20 million under negotiations.
Total £42m if LTV is 55% should leave £20m free after £22m is repaid loans.
With the other cash £35m+20m that should cover the £50m bond.
More sales to follow should turn round this sinking ship, shame inglis didn't do it 18 months ago, would have got much better prices.
Correction: NAV per share is 59.3p, giving a discount of 69.3% ( My maths is bad today... one minus...)
Santander LTV 52.1% as at 31st December. ~£2.5m of the loan paid down further. £10.9m paid down in total.
The new known unknown is by how much any of the loans have been paid down since the year end.
NAV per share of 56.4p, which with a share price of 18.2p is now at a discount of 32.3%
No news is... no news...
LTV covenants are not published in the RGL annual report for any borrowing facility.Covenants can be amended- temporarily or permanently- at any time by mutual agreement.How an LTV covenant is calculated could vary for each facility.Certain properties,such as unoccupied,might be excluded,for example.Typical covenant level is 60%.With an LTV of 55% RGL has not much flexibility.All guess work as RGL does not disclose useful information of this type.Slippery or what?
The change to the Santander LTV limit is recorded in the prospectus for the 2019 capital raise - page 166:
"11.11.2. .....On 18 June 2019, the facility amount was increased to £66m and the term extended to 18 June 2029. A further 18 properties are now secured against this facility to support the increase. This amendment has resulted in the applicable rate of interest increasing to LIBOR plus 2.20 per cent. per annum plus mandatory costs and the financial covenants have been amended, such that:
• historic interest cover must not be less than 300 per cent. at all times;
• projected interest cover must be not less than 300 per cent. at all times; and
• loan to value must be not more than 60 per cent. until the fifth anniversary of the amended facility being signed and 50 per cent. thereafter."
That last point. The loan won't need to be refinanced soon - matures in 2029 - just the possibility that some might need to be paid down sooner. And SONIA now rather than LIBOR.
ZDPs would certainly be an option, but their issue is that interest is being rolled up as capital which would be paid out of assets upon redemption - or a larger capital raise alternative. They're a creeping incremental liability on the NAV. That's fine if the assets are increasing in value, more of a problem if they're stagnant or falling in value. The risk is this uncertainty, whereas fixed-rate debt is a known (not necessarily a nice known, though!).
Started: Pangloss73, 26 Mar 2024 12:32
Last post: Laughton, 26 Mar 2024 12:47
Still a chance to pick up the bonds @ 94p if you're feeling confident, for a YTM in excess of 20% (assuming my calculator is working properly). Yes, only 5 months but it beats cash in the bank.
Obviously not out of the woods yet, but such a relief to some some detail on a significant disposal programme. Personally, I'm not tempted to buy any more whilst there's a possibility of a capital raise, but it appears they are no longer asleep at the wheel.
Started: jnewton4098, 26 Mar 2024 09:01
Last post: lse1111, 26 Mar 2024 11:49
Looks like the asset sales are well advanced so covering the bond is not an issue now. I think that the share issue was a last ditch opportunity to ensure that if sales did not materialise then they had the funds to ensure survival if all else failed. I don’t think it is a realistic option now.
In the Debt Financing and Gearing Section unrestricted cash is stated as £25.7m,whereas in the Financial Resources Section it is £30.2m .Why the difference?
58 “assets” are up for sale totalling £130m.Is an asset the same as a property ? They have 144 properties valued at £700m.So they are selling the smaller stuff,basically.Bigger stuff will have to be used to repay the institutional lenders.
A dump to get the bond covered.No bad thing.But £100m+ needed to get out of the Straight- jacket.
I do not believe there is any vaguely significant likelihood the business cannot continue as a going concern. The retail bond concern is a minor irritation for which there exists a wide range of alternative solutions. In 2023 the business had an operating profit of £43.1 million. As at the year end there was £30.2 million unrestricted cash.
2.2 Going concern
The Board have performed an assessment of whether the Group would be able to continue as a
going concern for at least twelve months from the date of the consolidated annual financial
statements. The Directors took into account the financial position, expected future performance of
the operations, the debt facilities and debt service requirements, including those of the proposed
refinancing of the Company’s Retail Eligible Bond, the working capital and capital expenditure
commitments and forecasts.
The cashflow forecast indicates that the Group requires additional liquidity to fund the Retail
Eligible Bond obligation during the next twelve months; and the Group’s ability to continue as a
going concern is dependent on its ability to obtain the necessary additional funding required through
a capital raise or alternative funding sources, which are currently being considered by the Board.
This condition indicates the existence of a material uncertainty that may cast significant doubt on
the Group’s ability to continue as a going concern. The consolidated financial statements for the
year ended 31 December 2023 have been prepared on a going concern basis as, in the opinion of
the Directors, the Group will be in a position to continue to meet its operating and capital costs
requirements and pay its debts as and when they fall due for at least twelve months from the date of
this report, as the Board are confident they can raise the necessary funding to replace the Retail
Eligible Bond due to be repaid in August 2024.
Started: chris1979, 21 Mar 2024 15:00
Last post: Jaxonsax, 23 Mar 2024 11:26
I dont quite understand the recent buying given that it has been announced they are considering issuing shares at a significant discount. Why not wait until after if you wanted to buy?
Given that refinancing has recently been flagged via Edison then an official announcment is in everyone's best interests - especially the Board's. The (bad) news is expected so they ought to take the opportunity to get it out into the open. Failure to do so might suggest an element of panic.
Interesting to see lots of trades buying into the stock over the past couple of days ahead of the annual results supporting the price up a bit. Do you think the we / the market will get the clarity over debt and financing it clearly needs from the annual report and / or any statements issued at the same time?
Started: CHELMOCHASER, 15 Mar 2024 11:10
Last post: 404x, 15 Mar 2024 18:06
Shows how useless these newspaper share tips are. At least they admit they got it wrong recommending the equity before share price went on to collapse. More than can be said for quite a few rampers on here when it was 30p+, who seem to have now gone very quiet?
Very disappointed that the management didn't do something earlier - its all about confidence and whats known.
i.e. to sell property it would be at a huge discount as everybody knows its a fire sale - so not really on, especially if already collateral. A share raise is now a disaster as the more the price sinks the lower the price needed for any interest, again especially as the institutions know this. What price here - could be 5-8p.
A historical precedent as usual is available - e.g.this happened to mighty Segro some time back when poor management overstretched it, and didn't believe Capital Economics telling them interest rates looked set to plummet - it then offered millions of virtually worthless shares as the price dropped over 80% - then hey presto - has a huge share consolidation so that existing holders (including staff - and I was one!) were wiped out, but the new institutions rescuing them were quids in on the cheap price and subsequent phoenix rise. oh, and the CEO - he went off with his gold plated pension after huge amounts of the staff were made redundant! This involved going from £10 to a penny share and then back to circa £2.50 again with many forgetting that the £2.50 should be divided by about 20 for the true share dilution price destruction.
Can't believe I was daft enough to think these managers knew what they were doing - part of their job is to read the market, prepare for hard times and unexpected events.
I'm afraid this is near wipe out time if you either sell out at a huge loss or have to shell out for a massive dilution.
Not pretty and after much procrastinating I'm still unsure which option to follow even now!!
Said it all along the bonds are the play here
Http://digitaleditions.telegraph.co.uk/data/1639/reader/reader.html?social#!preferred/0/package/1639/pub/1639/page/109/article/NaN
Started: Laughton, 14 Mar 2024 21:16
Last post: Laughton, 14 Mar 2024 21:16
Started: MrG123, 13 Mar 2024 13:20
Last post: Jaxonsax, 14 Mar 2024 15:47
Interestingly the Bond price has risen since the disasterously bad RNS
The problem is others might read posts like yours making claims about rent is going up and take an even bigger uninformed risk. I don't like to see people being misled by only being given one part of a story, whether knowingly or not.
By the way if anything I was being generous quoting the vacancy rate from interims. Q4s state occupancy had fallen further to 80%, so now the equivalent of 1 in 5 buildings by value they own is empty.
Rent going up is no use if it's more than offset by all these untenanted buildings. This is particularly precarious for such a highly indebted company when creditor demands on those same buildings continue, regardless of whether they're occupied.
It's not about whether it's fine or not, or whether there's risks or not. It's about Gauging what's in the price versus the reality. The property valuations already take account of whether a property is vacant or not, and a 70% discount to NAV, with rent easily covering interest and dividends, and a yield of nearly 40% represents good value, particularly when the recent issue is caused by an incredibly inept RNS rather than a fundamental change to the business. The trick is making sure you size these opportunities correctly in you portfolio - less than 0.5% for me on this one.
Not all commercial property landlords have the same pricing power. There are structural issues with the office market, demand has dramatically declined across the sector in recent years, particularly for the type of lower grade out of major city buildings that RGL specialise in.
This is very different from say warehousing which is booming, or even retail which is making a bit of a comeback.
This lack of demand is why RGL's vacancy rate is so high - in last interims ERPA rate reported as 16.2%. Compare that to say British Land with a diverse mix of prime offices and retail with a reported EPRA of 4.0%.
It's so important to not take some of these posts at face value because if you believed them you'd really be left with the false impression that everything was fine here.
You can keep repeating stuff, but it doesn't make it true. No one buys a property thinking they'll rent it for less. Rents fall if the market becomes awash with new properties or demand for rental properties falls. Given 98% rent collection, doesn't really seem like demand is falling. Most Companies who rent do so because they don't want to tie their capital up in an illiquid asset, or they cannot afford/get decent enough terms on a loan. And even if they do start buying, this would just push up prices and NAV for someone like Regional. We can agree that the RNS yesterday was a big mistake, but your understanding of commercial real estate is flawed. I've had dealings in this space for a few decades now, so I'm pretty familiar with it.
Started: silverknight, 13 Mar 2024 18:44
Last post: silverknight, 13 Mar 2024 18:44
The issue for me is visibility. As a (prospective) buyer of offices I would be seriously concerned about reletting once the lease term expires. Owning empty office space is a killer. Markets are always looking forward-hence the uncertainty and catastrophic effect on the sp.