-3x Short China Discussion Threads

[selkirk69] 19/5/2011 10:10

Things are moving which is the main thing, I remember that JB has put a time limit on resolving the LL discussions (July 2011), so there are target dates to all this.
If the bloody LA's would pay the correct rate it would help, can't see any other provider wanting to take LA's business, eventually LA's won't have anybody to do business with.
Good to see private payers increasing, the way forward, id SC can get a result this is will transform the company fortunes.

[nermil] 19/5/2011 09:37

sorry, things are NOT moving as quickly as I hoped...

[nermil] 19/5/2011 09:37

It certainly is dire but its what everyone expected. I hadn't been aware that they had another extension from their bank to the 30th of June. Things are moving as quickly as I'd hoped with the landlord negotiations.

I am very interested in why both Oceanwood and UBS are upping their stakes now??? One might be very thick but two is more persuasive to suggest there is more here than we see. If the company goes into administration, they receive nothing just like us.

As do the landlords, and in terms of the banks with most of their properties leased there can't be much in the way of property fire sales to rely on. Oh, and the government has to find homes for 30,000 elderly patients! lol

[qipincha] 19/5/2011 07:47

half year report out

[selkirk69] 18/5/2011 21:19

Another hand revealed late in the day.
18:09 UBS over 2m added 7.36%, was 6.22%

Wintrust has a 9.36% holding (3rd largest), these are the guys who bought in a short while ago and own property, surely they will agree to reform they can't really lose.

This ain't over yet IMO.

[5hakey] 18/5/2011 19:54

Thank you dealy

[dealy] 18/5/2011 19:54

they increased and didn't decrease.

[dealy] 18/5/2011 19:30

Oceanwood are either very clever or very very stupid. We'll find out in the next few days.

[selkirk69] 18/5/2011 07:46

BA LoL.

Madness, Linkedin floating for 17 times earnings and Faceache expected to be for double that, here we have a company 1 times admin.

edit
Be interesting tomorrow, can't see any great news forthcoming tbh.

Is it worth noting that Oceanwood increased their stake to over 9%, they've added 2m in the last 2 wks. Time of that 'holding' 17:23, market closed, interims out the following am.
Hope there's something in that.

GL to all holders.

[broken_arrow] 17/5/2011 22:51

bullocks its going south.will go .01p or so. may be soon in administration.

[mavverick] 17/5/2011 17:22

thanks selkirk...good link

[selkirk69] 17/5/2011 16:24

A good summing up of the sh1t SC are in.

[mavverick] 16/5/2011 10:25

Each care home will have a profit/loss figure attached to it based on three variables, current occupancy, council fees paid, % of self payers, ..and then SC will factor in the 30% rent reduction, if this can be agreed,to see what % of the portfolio can stay with SC, based on a circa 0% fee uplift for the next 2 years, and some rising costs. As a guesstimate It still seems likely on this basis that at least a quarter of their portfolio will be unsustainable and possibly up to a half.
If Sc can come out of this fairly intact over the next 2 years and retain the profitable half or so of their portfolio, then this share could still multibag.

[selkirk69] 16/5/2011 08:42

Two things need to happen to allow SC to get back on their feet
1. Rent reductions
2. Investment
The rest will most definately follow.

[mavverick] 16/5/2011 08:37

phrc as you say major rent reduction needed and even then it does not solve the lack of occupancy. Rent charges are prob fairly uniform relative to the value of the care home ...occupancy and fee levels are not. I think if selling some it will be in small chunks to a range of small care home operators seeking to grow their business as well as some going in single digit sales ...and not all will be saleable as care homes so there is a hit for landlords whichever way they roll.

[prhc] 16/5/2011 08:28

Landlords are facing up to 40% market value crash. In line with plenty of typical commercial property. Personally think this sector is knackered more than average commercial activities...which is saying something.

Private sector demand has collapsed with household income back to 2005 levels and going down. Only London house prices rig the UK wealth merrygo round.

Therefore it is wise to plan ahead and base everything on 2002-2004 values, cos thats where it going, so 50% plus rent reduction and these shares have a tiny chance with 4 years of govt funding pain still to go

Current rent of £6k PA plus per bed is not commercial. Only the absurd PFI NHS world for that!

At around £16psqft PA rent is madness and SCHE should never have modelled a business plan on this, especially with rent increases each year.

Forget new capital as it will be poored into rentseekers pockets while personal care comes second. Fundamental rebalancing required.

[selkirk69] 16/5/2011 08:21

Sell or rent to who?
Not Bupa they have their own troubles it seems.

[mavverick] 16/5/2011 08:15

I would be surprised if SC will be able to get away with just 50 care homes closing as their lack of profitability goes much deeper than this but this could I suppose be a first and immediate phase.
LL's have the option to sell or rent their properties elsewhere if the contracts with SC are fundamentally revised, selling being probably the most viable.

[selkirk69] 16/5/2011 07:56

Clarendon
I think you need to re read that article, one landlord has 200 and there are approx 50 that may need to be closed.

The 200 LL, NHP, is backed by the Qatar investment group who have very very deep pockets.

Another landlord also took a 9-10% stake in SCHE shares a while back, I would assume they would be willing to reduce the rent and see their investment increase.

[clarendon] 15/5/2011 14:12

I guess they will be looking to announce the landlord deal (ggod news) along with interims (bad news) on Thursday. Sunday Times article saying looking to dump 200 around homes. I think that there is one pretty dominant landlord over the portfolio.

[selkirk69] 14/5/2011 17:28

Bogg1e
A very small amount of punters, no volume at all for this to more in such a way.

I would think the next set of numbers will be pretty much the same (poor), the landlords will agree to cut the rent and then they'll be taken out.

At this stage the last thing SCHE want is an improvement.

Landlords will not want to run these homes, they'd be no better off and will have a worse problem than now. A 30% reduction is better than getting long term nothing for specially adapted buildings.

Providing a deal is done this will become an attractive target for a T/O, just needs investment. Plenty of institutions are holding big numbers of these shares.

[bogg1e] 14/5/2011 17:06

From IG Index:
Care home operator Southern Cross Healthcare gained 18% to reach 11p on news that the firm had agreed a deal with its landlords that will see rent cut by 30%. However, the Guardian reported that some landlords remained sceptical that the company could recover, and that some think that administration remains a possibility.

From FT:
Southern Cross Healthcare, the nursing home operator, bounced 24.9 per cent to 10.6p after Brewin Dolphin was said to have upgraded it to "hold".

Sorry Aspers but thats all the news i can find, as i suspect this is simply a relatively small number of punters piling in on the case of a turnaround and that appears to be all. I would love to see 40-50p, which would be approx, 2 x nav but i doubt whether we'll see it and there is the real threat of going under. If thats the case its the old folks who will get the treatment they need byt PIs will get shafted. But good to see a positive moce for once.

[aspers] 13/5/2011 19:35

Boggle.....you dont get a 30% rise on a broker note!!! News is leaking and I expect 40p + by next weekend :-))