Grainger Share Discussion Threads

[coby4] 28/11/2008 09:50

they claim the portfolio is worth more than the debt - presumably there has to be some independent confirmation of their valuation? they also say that there is a much larger reversionary value although this could only be realised if the properties were vacant. as most of it has sitting tenants this isnt easily achieved. definite upside if (big if) market sentiment changes and access to mortages improves

[kibes] 27/11/2008 17:57

Its very difficult to say whether this is worth anything or nothing really. Huge debts of £1.6 billion, does their property portfolio exceed that or not? Its anyone's guess but mine is not and things could easily get much worse next year. On the plus side there is plenty of rental income coming in and no immediate concern that loans will not be serviced, particularly if the rates might be reduced. I agree the banks will probably just go along with the situation unless something panics them. In a serious FTSE rally this could easily go back up to 200p as shorters are squeezed to the limit. Too uncertain for me either way at the moment.

[coby4] 27/11/2008 16:12

agreed no bid, £400 million is due June 2010 not 2009, guaranteed rental income, increased funding - banks must be happy, government looking to intervene in mortgage lending and prevent hasty house reposessions, new build almost dead, if they can weather the storm..........

[kibes] 27/11/2008 12:57

I agree with you they are probably bust, but they are certainly putting a positive spin on things. I shall wait until today's rally burns itself out before opening a short, the problem with short positions is bust companies can reach ridiculous highs as shorters nerves are tested to the limit. We are probably due for a major FTSE rally soon and this will drag GRI up with it. There will be no bid interest though, who would want the debt in exchange for largely unsaleable properties?

[wiseacre] 27/11/2008 12:08

I warned of a rosy hue on the accounts and the presentation IMHO is disgraceful. The salient facts are the company made a loss per share of 77.4p, borrowings have increased from £1.34 billion to £1.62 billion with repayment of £400 million due next June. A Gross NAV of 535p is meaningless as it does not take these borrowings into account nor the taxation on disposals. Burried in the accounts you will see anet NAV figure of 178p per share which, given the continued economic downturn and the fact it reflects the balance sheet date of 30 September, is hardly realistic

[wiseacre] 26/11/2008 13:42

Bearing in mind the company still has £1.5 billion in debt and against the precipitous fall in property values this company is probably bust. No doubt the forthcoming statement will put as rosy a gloss on trading as the board dares.(Just look at its previous statements). Holders really should make for the exit if they have any sense of reality. I admit I am talking my book. I have been short since the shares were at a level of 250p and remain short. They are likely to fall to 20p before any possibility of bid interest INMHO.

[coby4] 25/11/2008 13:15

big increase today

decent results Thursday?

[jdschwartz] 24/11/2008 10:48

How come the profit shown above says 77.5m but on tdwaterhouse to march 08 says 0.2m??

[kibes] 11/11/2008 19:02

sandbank - if the bonds are worth less than 50% of face value how can the equity be worth anything much? I wouldn't bank on shorting pressure coming off.

[sandbank] 05/11/2008 15:06

ERSTWHILE2: Thanks for that info. I was quoting a point made to me by someone close to the company but I'm not really across how this works (as you can probably tell). Do you think the shorting pressure is now coming off GRI now ...or not?

Reading today's RNS - it all seems relatively positive.

" sales from our core and retirement solutions portfolios for the year ended 30 September 2008 were 17.5% up on the previous year and that we were, and we remain,
confident of meeting our interest cover covenant not only at that date but also at 31 March
2009, the next testing date."

[rd1881] 04/11/2008 16:59

sorry alex can you help me with your last comment. why would a lot of hedge funds be having to unwind short positions?

[sandbank] 04/11/2008 15:00

ALEX: Five oclock tonight is the deadline for the buyback of the convertible bonds I believe. A lot of hedge funds are having to unwind their short positions.

[alexx] 04/11/2008 09:50

any reason for the massive rise today?

[rd1881] 29/10/2008 17:17

LTV ratios getting too high on falling asset values. banks step in and start selling assets. that's what one needs to watch!

[kibes] 29/10/2008 16:47

Erstwhile2 - thanks also for the explanation. From what I understand the company has large debts (£1.6 billion) and in the current market it is unlikely its assets are sufficient to cover those debts. Therefore, it is technically insolvent. However, its tenants are still paying the rent and sufficient profits are still being generated to pay interest on the debts, so there is no immediate danger of a default. What is the principal source of pressure on the company in this situation? What is likely to be the event that might drive it into administration or liquidation? An inability to roll over debts perhaps?

[alexx] 29/10/2008 11:32

Just added a few more, only one up day after such a fall and now really struggling on a day when the market is well up.

[sandbank] 28/10/2008 15:32

ERSTWHILE2: Thanks very much for your most erudite explanation.

Who would ever have thought the share price would be down to this! Will GRI fall further or just get suspended I wonder?

[vision88] 26/10/2008 10:49

wiley - 21 Feb'05 - 11:12 - 1 of 117


This is a great share for safety, which I bought for my wife at £10 and have been really pleased by it's progress and by the very good annual report on their web site. It gets you excited for the future.

wiley will you be buying more. ???

[simon cawkwell] 25/10/2008 15:50

Gentlemen,

Depending upon how one approaches this exercise, I think it can be argued that the implicit consequence of Friday's convertible redemption announcement is that unsecured debt of GRI is not worth more than 50% of face value. If so, GRI is finished.

Simon Cawkwell

[loafofbread] 24/10/2008 15:34

True.

I suppose it depends on how low they would go now?

(I hate to ask but do you still have a position in MDX?)

[simon cawkwell] 24/10/2008 15:18

loafofbread,

An interesting commercial problem: I am sure that GRI would be delighted to rid itself of the rump end of an estate and close its files - and would therefore be open to a discount offer. But if you wait another six months it seems very probable that values will generally be sharply lower and, further, you may be dealing with the liquidator of GRI instead of the surveyor who knows your estate. Such a resultant deal might be very attractive.

Simon Cawkwell

[loafofbread] 24/10/2008 14:43

I own 4 flats in an estate of 80 flats.

GRI sold us the freehold 2 years ago and now they only have 5 tenented flats left.

Have been thinking about approaching them directly to see if they wanted out.

Will GRI be happy to sell at a deep discount to raise cash or am I being hopeful?

(flats worth approx £100K so £.5M in their coffers)

[pugugly] 24/10/2008 12:35

erstwhile2:> Many thanks for your explanation. I think I agree with your last sentence.