Member Info for baldmark

This is probably as stupid question since these things always pass, but why shouldn't investors, not party to the recent fundraise, vote against the conditional component, i.e. vote against all resolutions? Now that the EPC has been agreed, any subsequent fundraise would be at a higher price, i.e. less dilution.

Apologies if this has been answered elsewhere. A quick search of the threads didn't find it.

I can't see how a different US president is likely to make much difference to a Chinese company mining gold in Nicaragua to sell to the Chinese. None of the candidates like the Nicaraguan or Chinese regimes but neither are likely to invade. Sanctions are only a problem if you want access to the western financial system. If they're worried about change I'd have thought that it would make sense for a Chinese company to by the assets off a western company sooner rather than later given that there's not too much friction transferring the money at the moment - unless they're hoping for change and waiting for (more of) a fire sale.

These things take years, not months, as any shareholder in RKH can tell you.

Most of the trades recently seem to be sells. I'm guessing this is because the bad orange man looks like he's going to be President. However does this make any difference? I thought all our output is already built and sold under long-term power purchase agreements, i.e. not relying on government largess. Or have I missed something?

Well it's essentially a dividend cut with a bit of advanced warning. Not ideal but imo better than the alternative i.e. continuing to pay an unfunded dividend and then potentially stopping it suddenly when the financial position deteriorates.

This should hardly have been a surprise to anyone given what has happened with the other two UK listed battery storage funds. Given that the SP has neither recovered from its January lows nor tanked on the news I'm guessing it wasn't.

I like realism and have topped up on the dip.

Unfortunately, the relevant question is not "Which would you rather have?" but "Which do you believe?" I tend to put more score on where people are putting their money.

One positive thought: Given that the placee will almost definitely end up with over 10% of the new share capital they will be in a position, and strongly motivated, to try to make sure this mess doesn't happen again.

@Krustysmegma, the problem is we're trying so sell sub-prime regional offices. From what I can glean, our recent attempts to sell selected properties as anywhere near valuation were a failure, hence the need for an emergency fund raise to avoid defaulting on the bonds. I suspect trying to sell the lot would be far harder.

The assets of the companies you mention are further from the eye of the storm. Two of them aren't real estate companies. API is mostly industrial and warehouses, RLE is only 45% offices.

My 50% discount comes from what is beginning to happen in the US commercial real estate market. Unfortunately bad things from over there have a tendency to cross the pond :(

@Gerry557, from the HL website: https://www.hl.co.uk/shares/shares-search-results/r/regional-reit-ltd-npv

I'm not sure if this "estimated NAV per share from the previous trading day" is likely to be better or worse than the "latest published NTA per Share prior to the Latest Practicable Date " from the RNS.

@mentasm, I am applying the 30% discount to the property valuation to reflect what I guess it would get with a willing buyer and willing seller (as opposed to the valuation the lenders are prepared to use to extend and pretend.) Unfortunately no such discount can be applied to the debt :(

@Krustysmegma, in the event of a windup, i.e. fire sale of the property, a discount 50% t on the property would be more appropriate. It might also be appropriate to apply a small premium on the debt to reflect any early termination penalties. There would also be other costs in winding up and no, doubt the management would find a way to add their fees too. Therefore my best estimate for a wind up value would be zero.

Thanks mentasm,

You're right. I'd accidentally multiplied the NAV from the new share purchase price by 7/22 not just the NAV of the existing shares. Corrected NAV calculations below:

Pre open offer NAV per share = 61p

For each 7 pre-open offer shares, 15 shares are issued at 10p. Of this 95% goes to increase the NAV, 5% in fees. i.e. NAV from new share 9.5p

Therefore for every 22 new shares, the NAV will be (7 * 61p) + (15 * 9.5p)

i.e. for one share (7/22 * 61p) + (15/22 * 9.5p) = 25.9p

Post offer LTV = 40.6% so Property per share = 25.9 / 0.594 = 43.6p

Debt per share = 17.7p

20% discount: Property = 34.9p; True NAV = 17.2p

30% discount: Property = 30.5p; True NAV = 12.8p

40% discount: Property = 26.2p; True NAV = 8.5p

50% discount: Property = 21.8p; True NAV = 4.1p

Still not pretty, but suggests that we are now at around fair value on NAV (assuming a 30% haircut on property values) if not yet on yield. Unless there are other costs I have missed which will reduce the NAV.

Current NAV per share: 61p

Post open offer: (7/22) * (61 + 0.95 * 150/22) = 21.5p

Post offer LTV = 40.6% so Property per share = 36.1p with 14.6p debt.

Since the property is sub-prime regional office it would make sense to apply a discount.

30% discount: 25.3p => True NAV = 10.7p

50% discount: 18.1p => True NAV = 3.5p

New yield per share = 0.88p (i.e. 8.8p after consolidation)

Comparing this with other shares with iffy assets but with no immediate cashflow problems and fully funded dividends (SOHO, RESI) suggest a yield of 8-10% is reasonable.

8% yield give 11.4p

10% yield gives 8.8p

The fact that the place is willing to commit new money (albeit for a 5% commission) based on their own valuation of the property portfolio (as opposed to existing creditors who may view "extend and pretend" as the least bad option) suggest that the 50% discount on property valuation is a bit aggressive, however I can't see, in the present market, how the shares are worth much more that the open offer price.

Would any one like to explain why I am wrong?

It may be worth holding off until the last moment to take up the open offer. The fact that instead of the more normal transferrable rights or excess allocation facility, all unsubscribed shares are taken up by the placee could turn out to be a two edge sword if they end up with a lot more shares than intended (especially over 30% of the total issue) and need to dispose of them relatively quickly. The stock exchange have agreed to waive rule 9, however I'm not sure how long this waiver applies. This does seem a tempting target for shorts to try and drive the price below the offer price.

While it's definitely worth sorting out funding, it would seem wise to wait as long as possible for the big boys to finish playing before committing to anything.

RNS Titled "Underwritten £110.5m Capital Raise & Notice of EGM"

https://www.lse.co.uk/rns/RGL/underwritten-1631105m-capital-raise-notice-of-egm-fd4rjv7tmzxojy7.html

Today 07:00

RNS Number : 0517U

Regional REIT Limited

27 June 2024

…

(about 1/4 of the way down)

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

…

Ex-Entitlements date for the Open Offer

8.00 a.m. on 27 June

Probably just to a less green country. The Danes will destroy their agriculture sector and import beef and dairy. Cows will continue producing methane somewhere else but probably be worse treated.

I don't think this will help us at all. The way to replace animal products is to be safer, better and cheaper than the "natural" (aka cruel) variety. Europe is a lost cause for a generation, but America and China are far bigger markets.

It will happen because it is inevitable. Whether we have placed the right bets and will stay solvent long enough to reap the reward: Who knows?

Does anyone have any views if we are likely to be affected by the current trouble in Nairobi? I'm guessing Kilimapesa, being 230km away, won't be directly affected. However chaos is never good if you're trying to raise investment. Also, if the government is having this much trouble raising taxes on their subjects, foreign miners may look an easier target for a shake down.

I agree all is far from lost and fixing as many costs as possible + the potential operating contract help to derisk things. However this is discouraging me from adding more for now: "As previously announced on 28 March 2024 the Company will be required to raise further funds for the working capital requirements for the period up to signing full EPC documentation and the financing proposal for the complete construction of Kola from the Summit Consortium."

I'll be interest to see the form this takes. If it's a placement, especially sans-warrants, then it says what people with far better knowledge and connections than me are willing to pay.

AJ Bell still showing as open offer shares as provisional. OK, if I wanted to sell I may be able to do so on the phone, but how many people will do that rather than waiting for it to appear online?

I think Xenon will be doing well if he gets his sub 1p but, despite the long term value, I can't see why it won't continue to drift lower until we get some news.

About 86% of excess application shares have now been credited to Halifax accounts. Nothing on AJ Bell yet.

From the Recent FIG press release: The Offshore Minerals Ordinance requires that applications for offshore oil developments must be subject to a detailed process of Environmental Impact Assessment.

Does the FIG need to take account of the recent UK Supreme Court ruling which effectively says "No New Oil" or does the UK court have no jurisdiction over FI?

https://dailysceptic.org/2024/06/20/landmark-supreme-court-net-zero-ruling-threatens-entire-u-k-oil-and-gas-industry/

Still not tradeable on Halifax or AJ Bell. Anyone know about any other platform?

The fireworks (or damp squibs?) seem to be postponed for another day.

Got some more dry powder ready (from sale of TGR - Thanks for at least trying @tomorrowtoday) in case Xenon is right.