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I am not sure I fully understand this either. I guess the reduction of the dividend level made some people nervous and perhaps an indicator that rents were not being paid. The reality would appear to be that the rental payments are running at perhaps a higher level than people thought.
Clearly its difficult to value any property in the current circumstances but given their portfolio which has hardly any retail and as far as we can tell rents are being paid then assuming the tenants survive then they will continue to pay until the end of the lease. The govt has given all tenants an ideal opportunity not to pay as they cannot be evicted and therefore many a company is not shy in using this leverage whether they are suffering or not as I am sure we have all seen in the press.
So for me the discount is too big... they sold a property at or above valuation and bought something much cheaper. It is getting to the point where the yield on the shares is so much that they should consider share buyback (I see that AEWU is doing so and the discount I would suggest is not at this level) as 12+% its probably better than they can get on buying other assets, unless there are others that are distressed.
Just remains a long terms hold for me and added around this level
The question is what level of rental is actually paid to them .... it the majority is paid then they will pay the dividend as someone else has mentioned they have to distribute 90% because they are a REIT. So the question is around the rent payments and the 3 months to March the cash flows of the tenants was probably better than the 3 months to June
Gerry, I know its hard but keep the faith... I am a long terms holder and (sadly in hindsight) been buying all the way down from 90p in reducing quantities. I cannot believe that a well run company like this with a diverse property portfolio and a wide range of tenants is suddenly trading at about 45% of its NAV and that the rent roll will fall off a cliff. We can do nothing more than wait for some sanity to return to the markets.
I have always believed in the quality and prospect of the underlying asset. The problem has been first and foremost around the financing arrangements and the last 2 efforts dealing with the people they have have resulted in raising less than expected and a significant depression on the share price... including the one that is still in place today. Obviously operationally this has also been weak and the numerous delays cost money because of the cost of paying the people waiting for the rig to be in place. So even though they think they have money its never quite enough. OK... bottom drawer but me feeling is that someone will recognise the quality of the asset who has the financial capability to realise its potential and that will be ultimately at our expense
There is no doubt that underlying this stock there is a decent asset waiting to get out. I am a long term holder and therefore well under water. My limited experience of AIM is that in the absence of positive news the values seem to drift and when you have a history of over promising and under delivering each deafening silence means that people fear the worst.
The problem is that a number of times we have been told that we have the money to complete phase X, until time expires and nothing is done on time but money is still being consumed. When more money is required our proposed solutions do little other than depress the price further. The bottom line for me is that this will go up, when and only when there is some oil flowing, which generates some cash flow... I only hope that happens before the money runs out again or before someone bids a premium to today which means I for one will lose money unless its multiples above the current price.
Gerry, I took up under the placing and bought significantly more yesterday. Interest rates are certainly not going up anywhere. They raised money because they spoke of opportunities and have made this one and seems they have more they are working on. I like the way they seem to manage the portfolio. They are happy to sell at the right numbers, they are also happy to take something under performing and invest to turn it round. It yields about 7.5 - 8%... of course it doesnt mean the underlying value cannot go down of it trades at a big(ger) discount to NAV... nd who knows what Brexit will bring... but I am in for the long term
Gerry, being a closed fund they would not be a forced seller due to redemptions. Of course the value could still come down is asset prices decline. I would assume that SREI is choosing to deleverage whereas RGL seem to be issuing more capital to take potential opportunities. I like the way that they actively manage the portfolio. I am taking all of my rights and seeking an additional allocation under the offer.
Different issue... what they say in the prospectus as a warning is that there may not be a liquid market in their shares and therefore may trade at a discount to NAV and these can be significant as for example BLND. Given that the REIT is a closed investment they would not need to sell properties for redemptions as there is no ability to redeem. This is Woodies problem and the same reason that open ended property funds suspended during the crisis.
I dont think there is any specific news but would guess selling on the basis of Facebook LIbra news
I agree that Martin Hughes / Tosca is seen to be a sticky investor. Therefore I dont see him reducing in this buy back, more for the fact that he will only reduce his holding by a small amount which will not change anything for him. Assuming the large shareholders dont participate in the tender a greater percentage for those that do. I would also like to think that Fanning has sufficient commitment not to sell anything .... also showing his commitment. Not something I would bank on. Whilst a lot has changed the monies are being repaid which should be enough to keep the buybacks coming. We know that the rearranged financing allows a lower level DSRA which would enable dividends to be paid but could also be withheld to fund the development of OML 18. A combination of the two may well indicate the £1 plus valuation for the shares in the medium term as SPA suggested a couple of years ago
We dont know if they sold more on Friday. If not then after the 29th they will have shares to sell from the first trache if the price for the last tranche has not already been agreed.
From what I have read from the various RNS the drawdown was not that long ago and the general terms of the conversion seem to be around the non payment by AAOG 6 months after the drawdown unless otherwise agreed. If this case it seems that AAOG agreed to the conversion only a couple of days after the drawdown in which case it seems like an equity raising. The problem for AAOG is that S then proceeded to sell / hedge this amount and hence the short position. The effect being that the prices was pushed lower on the weight of selling.
I would say the current situation is that they have 11 million, have hedged about 6 million which means there is probably another 5 million to be sold unless they want to stay long. My feeling is that the suggestion that there is no net short position is so that they are not selling in front of their pricing. The question is whether it is deemed that selling before the 29th is accumulating a net short