Member Info for okenia

tick tock...

Spectacular or massive flop. No half way.

Guess they could post tomorrow if they are busying watching GBBO tonight.

We warned repeatedly at the start that the overwhelmingly most likely outcome was total and utter wipeout. Chin up, it might not happen!

The fact that they are giving them a Standstill Letter on a weekly basis is interesting - possibly. Does suggest they are working to a timescale in weeks not mega-multi-months. If it was "well we know it's gonna take you six months to sort this" then they are generating unnecessary paperwork by issuing a letter every week. No reason not to get the standstill tomorrow. The bombshell one will be when (if) then RNS "we've sold a property that has now reduced the LTV and outstanding debt by enough to reduce the overall interest in the debt by 3%", that when it comes will appear out of the blue I suspect and that will be a massive step forward. There are of course other options and plans one could think of ... fascinating to watch how this unfolds.

The longer it is in play the more likely a positive outcome - partly because there will be the added benefit of the current uptick in German/French commercial property prices. The step-down is key; that is a combination of a reduction in LTV (selling a few properties and improvement in general asset value) and reducing the overall size of the debt to BREDS (which can only be done by selling assets). Thus, they need to sell a bit more. Selling big commercial properties isn't a quick process so I don't expect this to all be sorted in a week or so - after all, the Standstill Letters we first issued in May (it was reported in the May 29th interims) so we've already had 14 weeks of this process at least. Thus I think we're talking months not weeks for a resolution. That being said, with the cash burn at pre-stepdown levels this can't drag on much longer. It needs to be an aggressive selldown, sort the step-down out, then breath a sigh of relief and move forward. So not years. However if it fails the hat could be thrown in with a moment's notice if they decide it really isn't working and they just need to wind up.

One of these days I'll set up a blog so that when I post long detailed comments (as is my geeky nature) they don't then get lost in the transience of the "tick up", "Mms need your shares" noise. I quite enjoy doing this research (better than Suduko) and if it's useful to others then all the better. I generally don't post opinions, that's your job to make that decision. The thing to research is the current cash burn (high) and how that might be affected by the step down event (which will knock 3% off the repayments on a €180m loan). Will that be enough to stabilise the company? If so then it'll survive and you can ride a growth back to being a net-NAV of ~£100m REIT. That's where the upside comes from (basically massive operational gearing). The $64,000 question is whether they can pull it off.

Well said. From the start people have been upfront that the most likely outcome is wipeout. However, it's about risk/reward as a component of a bigger portfolio. Would you invest where there was a potential 50-fold upside but a 90% chance of wipeout ?

Can you post a link to that May 2014 article please? Thanks

You misinterpret the RNS. It's not like LOND They are exploring several options. One is to fire sale the entire p/f. As you can work out just from the LTV (let alone the RNS) that would just about pay the debt, leaving little left. That's why they are exploring Plan B (partial disposal to trigger the step down event). The whole reason for the standstill letters and Plan B is because the other option would wipe SH out. If they fail to get the step down then yes, it's a wipeout. But if the plan succeeds and IERE survive then the gearing at the SP level is massive.

How do you get the presence shares (there are about 26m of them, each with I think 18p accrued income) getting £30m? The preference is the dividend which goes before capital distribution. It only needs a couple of million to cover the accrued interest. There are 10x more ordinary than preference shares. And the preference shares are trading at 10x the price of the ords.

Look thru my posts, I've dealt with this in detail twice

Just keep and eye on the market dynamics. This is massively illiquid most of the time so you'll soon spot if they have finished their selling. There's strong buy pressure on the other side and since there isn't much to meet the need the SP moves very rapidly. Eyes on and you'll get a clue ...

OK let's do this from square one. There are a whole pile of big investors in IERE. IERE bombs for well-documented reasons, volume is very low (500k a day). Any of the big guys who want to exit can't, because not enough liquidity and a big dump will collapse the price. There's now some liquidity (just shy of 30m a day) so Ironside now have an option to bail and have sold into the volume. To give a sense of scale, they sold over about four days by the sound of the RNS, so 7.5m a day. We've already had 18m today and I've barely had lunch, so their sell is readily absorbed in the volume. Now go back and look at the SP movement over 1-4 Sept and consider whether it seemed to being held back (there were loads of buys but SP wasn't moving, now we know there was this big sell order being worked). Do you want me to say whether I think it's good or back? Well on a pure market forces basis if there is good buying pressure (there is) and the SP is being held back by a forced seller (Ironside may be continuing of course) then ask yourself what happens when that seller finishes selling in the face of the current buying pressure.

Of the last four disposals, three have been in non-core (Germany/France) areas. Two were in Spain and one in Belgium. This disposal programme is this having the added benefit of bringing some tighter focus on what I'd think is a more attractive area - Germany and its powerhouse economy.

"German industrial output rose in July at its fastest pace so far this year, data from the Economy Ministry showed on Monday, suggesting Europe's largest economy powered ahead at the beginning of the third quarter. Factories produced 0.7 percent more goods than in the previous month, the ministry said. That was the strongest increase since December, but it missed the Reuters consensus forecast for a 1.0-percent rise. The June figure was revised up to a 0.9-percent drop from a previously reported 1.4-percent fall. "Overall, the slightly positive trend in the industrial sector is continuing," the ministry said in a statement, adding that order books were filled thanks to strong demand from abroad and that companies remained confident." from http://reut.rs/1NcYp2B

The properties in the p/f are mainly now in France and Germany (more in former). They've been selling down the assets in the weaker areas (I mean, who wants to own stuff in Spain at the moment with its train wreck economy?). Within that p/f, most are properties involved in logistics (a posh word for warehouses I guess!) and the rest is office and retail. Macro-wise then the German and France economies, and the logistics/trade sectors are what we need to look at. To this in, can I direct you to this tweet? Reuters Business ‏@ReutersBiz 3h3 hours ago German industrial output up in July, strongest gain so far in 2015 http://reut.rs/1NcYp2B

Of course, if the European property market continues to improve then that will help the LTV issue directly without disposals. This is worth a wee read (sorry if posted by others earlier) http://realestate.ipe.com/news/markets-and-sectors/european-commercial-real-estate-funds-on-top-msci-study-shows/10007437.fullarticle This macro climate is probably why the mezzanine lender is encouraging and supporting the turnaround as opposed to a fire sale at the bottom.

Cheers. That's useful to see - current volume is therefore at least 20% of the free float (probably more with sub disclosure II holdings).

On phone at airport so can't look easy. Could someone remind me the total number of shares currently held by the disclosed significant shareholders please, and then compare the remaining free float number with recent volume (just shy of 30m) please ?