Public Services Properties Share Discussion Threads

[scburbs] 20/12/2012 08:05

As expected there is no value in the US and Swiss properties for shareholders.

However, given the parental guarantee on the Swiss loan and the fact that it was cashflow negative mean these disposals are good news.



The comments about small residual value on the US properties is an illusion, albeit it may be correct from a cash perspective. The reality is that the US properties had $23.5m of debt against them and, therefore, there has been a loss to the group from the US activities and the group would be $3m better off if they hadn't refinanced the US assets and had just handed back the keys!

"Public Service Properties Investments Limited (AIM: PSPI) is pleased to announce that the $23 million senior guaranteed debt associated with the Group's holding of 140 US Post Offices has been successfully refinanced with a new $19 million senior debt facility (a loan to value ratio of 80 per cent.) for a term of 10 years at an initial interest rate of 4.875 % per annum. The new financing, in contrast to the old facility, is non-recourse to PSPI and leaves the Group with maximum flexibility as to the longer term strategy for these assets.

In the context of the refinancing, PSPI has raised a bridge loan of $4.5 million (the "Loan") from Manchester Securities Corp, an affiliate of Elliott Associates, L.P. ("Elliott"). The Loan carries interest at the rate of 6% per annum and is to be repaid before 30 December 2011 from proceeds of other Group financings currently being finalised."

[gnnmartin] 20/12/2012 08:02

Swiss & US assets sold. I look forward to Kimboy's & scburbs comments.
Nigel Martin

[c1d] 13/12/2012 13:43

Thanks Kimboy2,
An interesting read.
Regards

[kimboy2] 13/12/2012 12:03

Colliers Autumn report;

[kimboy2] 13/12/2012 11:35

Well I think UK valuations are in the ball park.

The current rent for UK is £3.8m and Colliers said the rent was covered 1.77x by operating profit which gives about a 14.4% operating yield.

In normal circumstances that would look a pretty good deal with a 100% loan being paid off in about 8 years.

If the 13% discount applied then the op yield would be over 16% and that is consistent with a 45p NAV.

The Swiss property was heavily discounted at last valuation. I understand that there are alternate uses for the property which imply a valuation above current.

On cash flow I have;

Rent £9.6m
Lease income £0.8m

Interst -£2.8m
Admin -£3.0m

Amort -£1.6m

Total £3m

[kimboy2] 13/12/2012 09:29

Well if the whole portfolio was sold on a 13.2% discount the NAVps would be about 45p.

I think it is somewhat embarassing, to say the least, that the asset manager didn't appear to know the terms of the loans. However I think it is irrelevant because the LTVs on the UK are only about 38% so, hopefully, won't come into play.

The UK property isn't particulary overvalued IMV. It is on an operating yield of about 14% which I would say is OK.

Anyway another £3m or so in the bank and I suspect that about 25% of the NAV is covered by cash. We shall see.

[kenny] 13/12/2012 08:36

This confirms what I have been saying for over a year, namely that the company has been over-valuing all of its properties:

"The selling price represents a discount of 13.2% to the independent gross valuation included in the Company's unaudited consolidated interim results for the six months ended 30 June 2012 or a discount of 7.8% to the independent net valuation at 30 June 2012."

It therefore makes it difficult to estimate whether there is any value left for shareholders; not least because I suspect that the UK properties are over-valued by much more that 13%.

[scburbs] 13/12/2012 07:36

Not a great sale, but a useful valuation sighter and a positive refinancing.

Unfortunately they have also included some rather bad news as well as this good news. Sorry guys we forgot about guaranteeing £11.2m of UK debt!

"All debt is non-recourse to the Company with the exception of Switzerland where the Company has provided an indemnity for approximately half of the current debt."

It has come to the Company's attention that this statement should have correctly stated:

"All debt is non-recourse to the Company with the exception of Switzerland where the Company has provided an indemnity for approximately half of the current debt and approximately £11.2 million of the debt secured against property in the UK."

[goliard] 13/12/2012 07:27

Roll over of debt is good, but sale at such a big discount to recent valuation calls into doubt the rest of the portfolio valuations. Hard to know the effect without revaluing the remaining properties.

[loverat] 21/11/2012 13:14

Looks like the management have destroyed any confidence here for a while. Hardly any point selling the small amount I hold and probably better sit it out and wait for a recovery.

[daytraders] 13/11/2012 10:42

Loverat, ah i see, i use the share centre, shame they dont have there own L2 platform.

[loverat] 06/11/2012 17:18

Daytraders

I have PSPI with the Share Centre. I only tried quotes from that account.

[daytraders] 06/11/2012 17:12

what platform you useing.

[loverat] 06/11/2012 16:31

No online buying all afternoon on my dealing account which is very unusual.

[loverat] 06/11/2012 14:29

That's interesting. I cannot presently buy any quantity at all on line. Can sell however.

Seems the person(s) buying this is back again. Similar size on a regular basis.

[loverat] 31/10/2012 12:51

Seems someone is still buying here.

[loverat] 26/10/2012 10:28

Interesting movements here. A small rise everyday and on several days some sizeable buys. Still low volume but I wonder if someone is buying these now.

[loverat] 20/10/2012 05:44

Rises initiated by the false market rumours of the poster known as 'buystock' usually are. Hopefully he has made his half pence a share and has cleared off.

[kimboy2] 19/10/2012 10:23

No it isn't rocket science but to be precise the german properties have been valued at £44.5m and have £19.7m of debt against them.