Stephan Bernstein, CEO of GreenRoc, details the PFS results for the new graphite processing plant. Watch the video here.
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Undervaued now a takeover target. Three to four bagger from here!
I just don't like the At Best Buys.... http://www.screencast.com/users/globalcrossings/folders/Jing/media/ec64a389-263f-416d-8fde-94d1013f942a
("Internalisation"), is an important step towards achieving an overall funding solution as it is anticipated that it will enable the Company to realise a substantial level of cost saving, with an immediate impact on the level of monthly cash outflows.
... Barclays is only allowing "At Best" Buys..?
LONDON (Dow Jones)--Speymill Deutsche Immobilien Co PLC (SDIC.LN) said Thursday the Board of SDIC has reached final agreement on the heads of terms with Speymill PLC (SYG.LN) in relation to the termination of the Investment Management Agreement, or IMA, and the acquisition of the Company's investment adviser, GOAL service GmbH. MAIN FACTS: -The internalization of the management, investment advisory and property management functions which is intended to be achieved through the termination of the IMA and acquisition of GOAL, is an important step towards achieving an overall funding solution as it is anticipated that it will enable the Company to realize a substantial level of cost saving, with an immediate impact on the level of monthly cash outflows. -The Internalization has received the support of various stakeholders in the Company including the Company's key debt providers and shareholders. -SDIC has entered into an agreement to terminate the IMA with effect from June 1. -The consideration to be paid, in lieu of notice, for the termination of the IMA is EUR7.851 million which is to be settled by the transfer to SPG of property assets owned by the Company, at the latest DTZ valuation. -To cover the handover of services over the intervening period, the Company had agreed to pay SPG the fees due under the IMA for a period of six weeks from June 1, expected to be about EUR1.14 million, and such fees to be settled also by transfer to SPG of property assets. -The consideration for the termination of the IMA and the payment for the six week period will be satisfied by the transfer to SPG of shares in two separate special purpose vehicles, which will include both the property assets and the associated loans. -The first transfer is scheduled to take place within seven days from the date of termination of the IMA and the second by Aug. 15. -The agreement includes adjustment provisions so as to enable the Company to meet the level of agreed consideration for the termination of the IMA and the payment of the IMA fee for the six week period from June 1. -At the same time, the Company, SPG, GOAL and Speymill plc shall enter into a continuing services agreement with effect from June 1. -Under the terms of the Continuing Services Agreement, each of SPG and GOAL shall continue to provide similar services as they are currently obliged to do under the terms of the IMA until the earlier of the completion of the acquisition of GOAL by SDIC or Aug. 15. -These arrangements are intended to enable the Company and SPG to achieve an orderly handover of the services provided over an acceptable period. -The Company has also agreed to acquire the entire issued share capital of GOAL from Speymill Property Group (U.K.) Limited at its net asset value. -The net asset value of GOAL as at Dec. 31, 2009 was EUR1.9 million and will be adjusted for any post balance sheet events as at completion. -The consideration for the acquisition of GOAL will be satisfied by the issue of a con
RNS Number : 7974N Speymill Deutsche Immobilien Co PLC 17 June 2010  17 June 2010 Speymill Deutsche Immobilien Company plc ("SDIC" or "the Company") Internalisation of management Further to the announcement on the update of the Company's bank facilities and internalisation of management made on 4 June 2010, the Board of SDIC is pleased to announce that it has reached final agreement on the heads of terms ("Heads of Terms") with Speymill plc in relation to the termination of the Investment Management Agreement ("IMA") and the acquisition of the Company's investment adviser, GOAL service GmbH ("GOAL"). The internalisation of the management, investment advisory and property management functions which is intended to be achieved through the termination of the IMA and acquisition of GOAL ("Internalisation"), is an important step towards achieving an overall funding solution as it is anticipated that it will enable the Company to realise a substantial level of cost saving, with an immediate impact on the level of monthly cash outflows. The Internalisation has received the support of various stakeholders in the Company including the Company's key debt providers and shareholders. The principal terms and conditions in relation to the Internalisation as stated in the Heads of Terms are as follows: Termination of the IMA SDIC has entered into an agreement to terminate the IMA with effect from 1 June 2010. Under the IMA, Speymill Property Group Limited ("SPG") is entitled to 12 months' notice. The consideration to be paid, in lieu of notice, for the termination of the IMA is €7.851 million which is to be settled by the transfer to SPG of property assets owned by the Company, at the latest DTZ valuation. To cover the handover of services over the intervening period, the Company had agreed to pay SPG the fees due under the IMA for a period of six weeks from 1 June 2010, expected to be about €1.14 million, and such fees to be settled also by transfer to SPG of property assets. The consideration for the termination of the IMA and the payment for the six week period as referred to above, will be satisfied by the transfer to SPG of shares in two separate special purpose vehicles ("SPVs"), which will include both the property assets and the associated loans. The first transfer is scheduled to take place within seven days from the date of termination of the IMA and the second by 15 August 2010. The agreement includes adjustment provisions so as to enable the Company to meet the level of agreed consideration for the termination of the IMA and the payment of the IMA fee for the six week period from 1 June 2010. At the same time, the Company, SPG, GOAL and Speymill plc shall enter into a continuing services agreement (
May your arrow fly long and straight & right to the heart of your target. I will settle for a few quid, but BILL is the one ( MR Mellon 30% holding) that really could fly long and srtaight.
The results will be out next week : we have seen some massive buying on the stock last week as someone was putting a series of 200 K share orders at 16 and 17 c. You all know my position on the stock as I posted a quite thorough analysis on the stock and think that institutional inflows on real estate is picking up again. Such a situation usually favours small caps liKE sdic. good luck to you all : some of us might become millionaires or go bust :-)
I agree with you, from what you are saying the € 20,000 being spent per flat in the Refurb program is not increasing those flats market value by sufficient amounts to offest the decline in value being caused by dilaidations and the low annual repairs and maintenance costs per flat which is causing vacancy rates to rise and these flats attract poorer quality tenants which in turn causes higher bad debts. I would presume work such as new bathrooms will fall within the refurb program. The only defence I can see is there maybe a timimg issue in that flats being refurbed are vacant and therefor the uplift in their market value is yet to be reflected. Otherwise the basis on which SDIC was formed would seem to be in question.
There are 1700? flats in the refurb program and a provision of 30m (approx) euros for refurb "investment". If you divide the latter by the first figure it seems very close to 20000 euro per unit. As for the 1100 or 1600 per flat figure- I've just spent twice that on a bathroom on a flat I rent out(no gold plated fittings either !).
Bondholder Look, I agree with you, clearly there is a problem and this manifests itself in high vacancy rates and high bad debt levels. The big question for me is can the current management turn things around? €20,000 refurb per flat impossible.... I guess you meant €2,000 which still seems quite low.
If the valuation is correct then presumably there will be some decent sized disposals in the near future to reduce the outstanding mortgage. What got me going was the idea that is going round that the income position is on the edge of breakeven after interest costs even though the FFO does not account for possible accrued repairs.(if my belief that 8 million repair spend is nowhere near enough to cover wear and tear) Incidentally you mention the figure of around 1300 per flat for refurbs which is the sort of figure i had picked up from the accounts but in one analyst report they say it is 20000 per flat ! What sort of refurb can you do for just over £1100 ??
Not totally clear on your point. But if you are saying their should be a further provision for repairs and maintenance in the accounts, my only counter comment would be that this is effectively reflected in the professional Estate Valuation. This fell in the last year and was reflected in the P/L as Change in Fair value of property Investment.
pomander My point is that we do not need to look behind the refurb expenditure as it is clearly presented as capital expenditure i.e. the equivalent of buying more units. It is the 300 euro per flat repair budget which looks woefully inadequate. For example if all the flats were brand new the repair expenditure for the first few years would be very low indeed but it would be mickey mouse when presenting the financial results not to make a provision in the income statement for a sinking fund to meet the inevitable long term costs which arise for replacements e.g. painting,flooring, kitchens,bathrooms,external,roofing, heating,electric etc etc. These costs have vanished because FFO does not allow for depreciation. If you allow say another 500 per unit pa you get an adjusted figure for net income before interest which is 13 million lower. i.e around 40m compared to interest costs of over 50 million.
If you are correct that indeed costs being presented as refurbishment costs are indeed simply reairs and maintenance costs the model on which the company is based comes into question. Th epoiont about buying older properties was that you could buy them at a discount of 40% of the building costs of an equivalent new build property.(excluding land). By spending much less than that 40% on refurbishment the idea was that you were converting older properties into equivalent new build properties at a much lower building cost. This has certainly not been reflected in the market value of the Estate which shouldm be the case. Indeed it was marked down again in the last accounts.
I agree with your comments, thye accounts refer to a refurb figure of € 1303 (from memory) per unit that has been refurbed, so the amount being spent on maintenance can not as you say be adequate. This prortfolio is also made up of older properties. I think the company is in a vicous circle, poor original property choices, high repairs, poor quality tenants, high vacancy rates, high bad debts and of course it has hefty management fees to support. Heating costs are a big issue for tenants in these older properties and the coldest winter in 30 years will not have helped. I wonder at what price a bid might become attractive to a potential suitor.. Other companies in this sector are faring much better and have much tighter models in terms of cost control etc. SDIC seems to fall below the sector performance on many fronts. Below 12 cents I might start buying again. All very disappointing, glad I pulled out at 30 cents but not before I saw it climb to 40 cents. Those days look a long way off now.
I have posted about this on the iii board but not had much response. The company (and certainly some analysts and shareholders) seem to view FFO as a kind of profit before interest indication. Looking at the income statement the company have spent 8 million on maintenance in the last annual reporting period. If you divide that by 26000 units you get a spend of around 300 euro per flat - you certainly cannot get by in the long run and keep the portfolio in a lettable state at that level of spend. This raises a question mark over the refurb program and whether effectively long term repairs are being presented as new capital investment which if true would flatter the "profit" before interest figure by several million euros.
You do not renegogiate loan covenants (especially in today's enviroment), you have to take action to met them or the bank takes control. That is why the reaction in the SP has been so severe. I would not hang my hat on NAV, indeed if we adopt the European standard SDIC is trading at a huge 89%+ discount to NAV........hopefully management can turn this around and match its competitors.
Negative cash generation from operating activities (ie. rents do not cover, managers fees, expenses & loan interest). No capital appreciation in the Estate despite refrurb program. Now in breach of a loan covenant...it is really that simple.
What is going on here? This top 10 investment for the next 10 years id turning into a bit of a turkey!
The recent news of a likely breach of bank covenant has taken the market by surprise even the directors of the company who had been buying aggresively shares in the company. If on an operational level, the refurbishment programme is still on track ( vacancy rates have stabilised and should start improving in the following month) and the portfolio values have reached a bottom, the bank has problems with one of its bank loans and the current price share fall is pricing in a significant capital raising and a failure of the loan renegotiations. The main question is this scenario really going to happen? If there is a capital increase how dilutve will it be? First let's look at the type of breach : According to the group "This breach relates solely to an amortisation related covenant on one of the Group's six facilities. This facility involves a loan of (€353 million) out of Group loans totalling (€1.18 billion)." The good point is that is an amorisation breach so it is less worrying than a breach due to a fall in property values. At the end of June 09, the group had excess cash of 46.5m€ ( cf presentation) which should be around 65m includuing the recent disposal. This excess cash accounts for a bit less than 20% percent of the bank loan which is in breach. The bank has in my opinion enough money to top up its deposit should the banking renegotiations fail. Final point, with Jim Mellon owning a significant share of SDIC it is clearly not in his interest to have a dilutive capital raising. Finally let's take an extreme worst case of a capital raising of 30m€ at 0.1€ ( please note that this is almost 50% discount to current SP )- a doubling of the number of shares. As the NAV was 0.74€ pre capital raising, that would make a nav of (0.1+0.74)/2=0.42€. The NAV will still be well below the current share price. To sum all up, i think that the market is already pricing a high;y dilutive capital raising which I think is unlikely to happen. Should this capital raising happen, the would still be trading at a significant discount to NAV. Well, these are only my thoughts!! The bank has in my opinion enough money to top up its deposit should the banking renegotiations fail. Final point, with Jim Mellon owning a significant share of SDIC it is clearly not in his interest to have a dilutive capital raising. On the positive sign, the company has already raised 22m through the sale - at a premium to book value-of some buildings. The Company is also acting proactively which means that it will not be in a hurry to accept any deal with its debtors and has some time to renegotiate its covenants.
dropped quite a bit since i last looked at these. still haven't found out about the euros thing, guess it's always been like that. it'll rise and fall by the same percentage though so whether you can buy them at 0.0018EUROS or 0.18EUROS you'll make or lose the same amount of money. Any opinions? Still looking to buy in this when i can free up some funds. Either this or AXS (a potentially industry changing product they have there)
I bought these a while back. didn't know the price was in Euros not pence. Ended up getting confused and spending more that I thought. Hope this helps. Oops
I think there has to be a case, strange thing is tho, my sell price in my lloyds account has the same problem, so apart from losing trading costs it would appear as if I would get my money back. But yeah I'm in at 28p with 695 shares. It really doesn't make any sense at 28p, a, their 5 year high would be over £100 a share. b, according to an email from lloyds all shares are listed in pence. And just some friendly advice, If you ever need another trading account, don't get a Lloyds it take 10 days to "check issues" and then after that all they do is send you a copy of the contract showing what you bought and at what price. Anything you can find out at Barc's would be fantastic. Thanks
ouch ! that doesn't sound good ... so are you in with 695 shares for 28p a share ? it's so weird if that is the case, surely there'd be a case against it and you could get your money back! i've only been trading for about 6 months but never seen or even heard of this happening... i'll give barclays a ring when i get a free moment