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REA Holdings Share Discussion Threads
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|My daughters hold a few ord. shares and rather more 9% pref and I am trying to decide whether the high yield on the pref compensates for the risk involved. If so, I might buy them some more.
I have a copy of the accounts for 2014 and have downloaded most of the significant statements issued since but am still confused about the REA Kaltim transactions recently announced and would appreciate any guidance that anyone posting here could offer.
The 2014 accounts do not give separate figures for REA Kaltim but tell us (page 9) that it is the parent of all of REA's Indonesian plantation subsidiaries.
The statement issued on 17.05.2016 tells us that Kaltim's gross assets at 31.12.2015 amounted to US$577 million.
Prior to the transaction Kaltim had 13000 shares outstanding (12350 A and 650 B) all owned presumably by REA.
SWA is buying the 650 B from REA and subscribing for 1530 new B shares. Leaving aside any distinction between A and B shares, there will now be 14530 Kaltim shares of which SWA will own 2180 or 15%.SWA is also making large loans to Kaltim to assist with its development plans.
The announcement on 16.08.2016 tells us that it is paying only $15m for these 2180 shares. On this basis Kaltim is worth only $100m and REA's 12350 shares are worth only $85m, say £66m.
REA Kaltim is, of course, highly geared.
REA's issued capital seems to consist of about £63m pref and 37m ord. Taking the pref at par and the ord at 250p gives us a market cap for the 2 classes combined of c£156m. If the Kaltim shares are worth only about £66m, can one attribute a value of £90m to REA's other assets ?|
|Looks a good web-site and family controlled Indonesian Group.
Think this has to be good news really. Hopefully, they will secure a better price for the remaining 34% being sold which will enable the borrowings to be refinanced. This is often the case whereby the initial tranche is cheaper than the secondary tranches.
I suppose the question long-term is whether or not the capital structure is capable of supporting a 51% stake in their main asset. In that regard I believe the preference shares are a less risky proposition.|
|Yes, all very quiet given the announcement. Must admit to thinking this was good news despite the discounted equity price. Have doubled-up first thing on the preference shares. It must remove all of the short term refinance risk with the US$ 50m available and possibly removes the need for a local listing. They are also only selling 15% now. Suspect the remaining tranches will probably be at higher prices, as they are in a tight spot at present.|
|Yes, results out and need to study in more detail. Emphasis of matter on going concern so they do need to sort out their short term borrowings. With the CPO price racing up to about US$745 I can't see this as being a major problem. We are probably in the hands of the palm oil price. On balance, think they will be OK but obviously they need to avoid dilution. The prefs currently look a better bet.|
|Founder-director and major shareholder retiring shortly. Maybe already.
Bright lad. One of the few people in the City who was able to write an Offer Document single-handed.|
|Quite a price increase today. Always the chance that they will be on the end of a bid at this level.|
|I see they have struggled with the issue of senior 8.75% notes and have not managed enough they wanted to neatly deal with the 2017 notes.
I also see they were talking about issuing more equity to conserve current cash balances.
Entire operation is looking rather over leveraged.
If palm oil prices plunge further there's going to be trouble at the mill|
my retirement fund
|should be due an IMS any day now and today a 'buy' A/C finncap.|
|I spoke to the company last week and can report the following.
Relations with the locals are better with no major problems since the spring.
The power generation is not being distributed via a locl grid, they have much more capacity and will join to the national grid in due course, they dont provide the wires etc that the national energy company so who knows how long that will take.
Saving in diesle about $3m per year as well as cash back from the sales.
Production volumes up, extraction rates getting better as is the quality of the oil.
Palm oil price reasonably stable and ok for them at this level.
Local currency weak against the dollar so has helped recover some local cost rises, ie labor.
Coal now being looked at by a partner with a royalties deal, no cost to REA.
Crushed stone, they are still waiting to get the permits to use on there own roads, thay have the only supply in the area so may be able to sell to third parties in due course.
A hold, this company is worth a lot more to a bigger local produce than the market give it value as a listed entity. At some point the chairman will retire and sell the stake, this plus the insto holders will be able o deliver over 50% so an easy deal at some point.|
|REA Holdings at 402p worth 500p VSA post AGM Statement
|oh dear a placing.. that is RE. off my potential buy list... company can't even manage its own finances....|
I've put a bit of analysis down on RE. I welcome your thoughts on the VALU thread.
|Maybe this is one of the reason why the share price has fallen and (imo) could have further to fall.- Continuing fall in palm oil prices and also coal..Extract from the FT today.
"Despite tentative signs that China's economy is starting to pick up again commodity prices remain low. Palm oil and rubber farmers have been squeezed, coal miners have been forced to shutter sites and send home workers, "
If you have access to the FT well worth a read. In world News.
Also link to Palm Oil prices
|Re is this about coal, no it was all to do with falling out of the All Share index on June 15 that's why the price was under pressure and the volume so high around that date.|
|Coming back very nicely. More to go imo.|
|undervaluedassets;> Good point - I had missed pLUS Japan restarting some reactors so could possilbly increase downward pressure on hydrocabon pruces by reducing demand for gas and a knock-on effect on coal.
One for the back burner - Revenue is there, it is just a case of share price falling to an acceptable buying level in respect of yield.|
|Is this about coal too?
coal has gone very cinderella lately.
palm oil price is also off substantially with along with crude|
|AGM was not bright thus continued negativity. The Malaysian IPO has done anything to help either. Watch and wait.
Pugugly, thanks for that, you could well be right but at 200p it would be quite a steal, assuming half the worlds population hasn't gone.|
|johnrxx99:> Have a look at the 10 year graph - Chartists might say it is making a very extended head and shoulders wit a downside of about 200p
I have not checked fundamantals - Only graphic pattern.|
|I'm a bit risk averse at the moment (understatement) until this Greek situation quietens or blows up. I suspect Spain will continue whatever.
It looks a bargin at these levels until I look at the 5 year graph. Borrowings are still essential and a meltdown could have serious short term consequences.|
I can find nothing wrong here.