-3x Short China Discussion Threads

[warwick69] 14/6/2011 09:34

well looks like it was a pause 11p paid now

[warwick69] 14/6/2011 09:28

seems bit toppy at 10p is this a pause before further short covering still lot of shorts out there must be getting a little worried?

[warwick69] 14/6/2011 09:26

900k paid at 10p

[boffster] 14/6/2011 09:25

The company hasn't taken any handouts from the state. So the gov. cannot just waltz in, take over and leave shareholders with nought. There are rules for that sort of thing.

[selkirk69] 14/6/2011 09:23

Don't forget the business is up for sale as well.

[typo56] 14/6/2011 09:23

sul2: Then it depends upon what is politically expedient to leave for the shareholders. I can't see why shareholders should be left with anything.

[boffster] 14/6/2011 09:23

IMO a 15% reduction in rents will bring them down to a more realistic level and will make all the difference to the business' viability. This coupled with considerable internal cost savings and we should be back on the road to profitability.

[jazza] 14/6/2011 09:21

looks to have broken up out of the down channel that started late january.

[edmondj] 14/6/2011 09:21

Share price will find some stub value amid the speculation about survival. Whether there is any real intrinsic value though, when creditors are being presented with a compulsory haircut. (See articles suggesting they must write off some debts.)

[sul2] 14/6/2011 09:19

Rally will end at 20p with Government Grant for the elderly being introduced. = 50p .... Or the Govt will take a stake in SCHE.

[aspers] 14/6/2011 09:16

Boff....sorry yes you were, I'm getting too excited now :-))

[typo56] 14/6/2011 09:16

Agree about selling into the rally prhc. I think shareholders are still going to have to accept the brunt of the pain.

Only question is where does the rally end.

[aspers] 14/6/2011 09:15

Just offered 10.24p for all my holding!!!!!! This is going places :-))

[boffster] 14/6/2011 09:12

Aspers, I was 3 hours off the mark. You were 7 hours off :P

[boffster] 14/6/2011 09:12

A pretty pessimistic outlook prhc. Occupancy levels in the homes will not keep falling IMO. Demographics make it very likely the reverse will happen.

[aspers] 14/6/2011 09:11

Well my 10p by lunch was 3 hours off the mark!!! ;-))

[prhc] 14/6/2011 09:06

12% rent reduction is "around" B/E in my model. However that assumes -2% referrals. SCHE reported -8%. If this continues for over 12 months...all rescue scenarios are futile.

However further current headwinds persist...

Think we are facing series of incremental rent reductions over next 3 years with no excess management profit

Why? Well, pure EBITDA per bed is still declining, towards £5k per bed average (some local authority business will be being done at much less)
No matter how you finance that,it will require a reasonable structure
Current rent of £5.7k PA per bed...AFTER reduction is a reality check

Sell into rally

[sul2] 14/6/2011 09:06

Im in at 9.75p with 58k shares.

[boffster] 14/6/2011 09:05

aspers, I agree. I think a weaker board would have folded but they are really playing hardball with everyone, very much feels like they are doing their duty to the shareholders

[typo56] 14/6/2011 09:04

Seen it before with JJB. Massive rights issue next. Will Bill Gates Foundation step in!

[edmondj] 14/6/2011 09:01

Basic survival instinct of a cornered animal.

[aspers] 14/6/2011 08:59

I like the way Jamie has played this...a shotgun to the head of the property owners basically saying we will pay you what we can afford...if not we go bust and you get nothing!!!....also the high profile media of the past few weeks will send a message to the LA's that if you dont pay the going rate for care of the elderly you will have to sort the mess out on your own.

I really see this back above 20p by the end of July!!

[boffster] 14/6/2011 08:59

Typo, lol, its certainly been a black hole for investor's cash just lately!

[typo56] 14/6/2011 08:56

How about "Black Hole"?

[topinfo] 14/6/2011 08:55

DJ Southern Cross Landlords Accept "Significant" Rent Cuts

LONDON (Dow Jones)--Landlords of Southern Cross Healthcare Group PLC (SCHE.LN) have accepted "significant" cuts in rent to help the crisis-hit care home firm stave off insolvency.

The cuts form part of a rescue package that will now be put to the company, its lenders, and the government, a committee representing the landlords said late Monday.

"The landlords have agreed in principle that they will make significant financial concessions in order to achieve a sustainable solution. Our overriding concern at this time remains minimizing disruption and concern for residents and their families," Daniel Smith, chairman of the committee said in a statement.

Southern Cross last month said it would withhold 30% of rents for four months this summer to prevent financial collapse. The Financial Times reported that the deal proposed by landlords involves long-term reductions of around 10% to 15%, citing a person close to the situation.

-By Tommy Stubbington, Dow Jones Newswires; 44-20-7842-9268; [e-mail]

(END) Dow Jones Newswires

June 14, 2011 03:52 ET (07:52 GMT)

Copyright (c) 2011 Dow Jones & Company, Inc.