Alpha Share Discussion Threads

[cjohn] 19/11/2014 10:43

You mean the revaluation of the ALU site in December, I think. Refinancing in Feb (possibly!).

This is a stub stock. Obvious considerable risk of going under, but in the case that it doesn't the upside wcould be substantial.

I occasionally put money into stub stocks like ALPH. More often than not, they do go under. However, the dramatic share price appreciation of the fewer successes greatly outweighs the loss from the larger number of write offs.

[senor_sensible] 19/11/2014 10:32

Cjohn, excellent post, I agree the refinance at the end of Dec with the ALU site could be the saviour.

Assuming your 1:3 chance of success, I would put the short/mid term upside at >10x share price (>1000% profit)

Anyone looking for a risk free option should try a cash ISA, but the cost of the low risk option is a 2% annual profit.

IMO this is a strong buy (on the basis it is still a risky investment due to the well know issues) at below 5p even at >5p this is a long term hold to get the yield as rentals prices and property values rise.

[cjohn] 19/11/2014 10:13

The amount of cash at the bank is not the issue. The modest rate of operating loss suggests that there will still be cash in the bank in February.

The only question is whether the management can pull off a re-financing. Obviously, given the LTV, there is no possiblity of renewing the Barclay's loan or obtaining a senior loan from any other bank.

There are other possiblities for re-financing: equity finance has obvious drawbacks given the derisory share price, quite apart from the complications of the trust's provisions.

However, there is subordinate debt of one sort or another: mezzanine finance is the obvious candidate. Obviously, it'll be more expensive than senior debt. (To be weighted against that, Alph would be free of the onerous interest rate on the swap.)


There is a property revaluaton coming up at the end of the year. Given the successful renewal and extensión of the Alcatel-Lucent letting, it's highly likely that this property - a significant proportion of Alph's overall portfolio - will be revalued upwards. (Otherwise Spanish property values have begun to tick up, French values are still flat on average.) So we might expect to see an upgrade in net asset value at year end, in spite of the operating loss.

My feeling is that there's a 50-50 chance they'll obtain re-financing. Discounting an innate bias to optimism, let's call that a 1 in 3 chance of obtaining subordinate debt. In that 1 in 3 shot, the SP
would be trading at a very significant discount to asset value. So the 1 in 3 shot is likely to prove very lucrative, if shares are bought now.

(However, the picture is complicated by positive outcomes that use a combo of debt and equity.)


So a 2 in 3 chance of a total wipe out. A 1 in 3 chance of a very significant profit on shares bought now.

I'd be interested to discuss probabilites with other posters on the board.

[senor_sensible] 19/11/2014 10:05

hxxp://www.propertywire.com/news/europe/france-commercial-property-index-201411139812.html

[senor_sensible] 19/11/2014 10:01

Paris - Persistent fiscal pressures, an uncertain business
environment and high unemployment have slowed
occupier activity, and rents declined in 2013. A revival
of activity in 2014-2015 is expected as limited new
completions are due in Paris proper and demand
continues to erode excess space.

Barcelona - Total availability is high, but grade A vacancy is
low with space absorbed as occupiers upgrade in a
pressurized rental market. Positive growth will follow
as limited speculative completions decrease further
with developers reluctant to commit in the absence
of pre-lets

hxxp://www.cushmanwakefield.com/~/media/global-reports/CW_Global%20Office%20Forecast_2014-2015.pdf

Commercial property markets are recovering, the independent valuation at the end of Dec should mark the portfolio up, this is backed by the recent evidence that Alph can sell property at or above book value very fast. whether this along with cash in the bank gives good LTV is open to speculation,. Why anyone would want to sell up at the bottom is beyond me, the time to sell was in 2009.... IMO good speculative buy and hold for potential multi bagger (>10x) well worth some risk

[senor_sensible] 19/11/2014 09:30

Plenty of experts willing to post as fact that this will go into administration in 3 months time but not willing to comment on what the cash position of the company is

hxxp://www.cushmanwakefield.co.uk/en-gb/research-and-insight/2013/global-office-forecast-2014-2015/

There is no disputing the re-financing is a concern and the swap was a disaster, but I do not see this quite as desperate as some others do the potential upside here is worth taking a risk IMO.

Lets see how many BB experts are willing to discuss the cash in the bank at the company or if they will just continue to ignore that and focus on the unknowns.

[blackpoolsteve] 18/11/2014 16:46

I agree ....in the classic words of Monty Python - "Is this dog dead? No,its just resting"

[hosede] 18/11/2014 15:55

In Feb the Co. will go into administration and the assets will be sold to pay off most of the bank loan.

[hosede] 18/11/2014 14:15

S-S
I'm afrad your'e clutching at straws, Even if the properties could be sold at book value, I doubt 7m would cover the selling costs. Europe looks like it will be mired in deflation for decades - likewise probably the rest of the world - The directors handling of the currency swap has been appalling. I'm afraid this dog is soon going to make a final visit to the vet.

[blackpoolsteve] 15/11/2014 14:19

The sad facts are the share price says it all,not just this year,but over the last 5. How the board can look themselves in the mirror,whilst blaming the French economy etc beggars belief.

I bought this share for income, and I should really have sold out.Thankfully I only have less than 20,000 ,but the holding will probably disappear,as it is really too small to sell now.
I think SRE is a better prospect,so good luck to still hold this dog

[red army] 15/11/2014 11:40

I am about to write to all shareholders requesting an extraordinary meeting to put forward various questions with respect to their strategy and possibly concluding an a vote of no confidence.
It is my belief that the board have not acted in the best interest of the shareholders and continue to do so through their inactions and lack of urgency and foresight.

[senor_sensible] 15/11/2014 11:06

hxxp://www.lincs.fr/wp-content/uploads/2012/12/howtocometovillarceaux.pdf might want to have a look at where the money is invested

[senor_sensible] 15/11/2014 10:46

NET assets in June statement wer 6Mil, as by the admision of many commentating around the latest release are 7 mil, so NAV has increased by 1mil in the last quarter.

There is no disputing that the finance comes to an end in Feb 2015 and it wil be difficult to re-finance, and that might be step too high for the company. but that does not mean some of the current information should be ignored. Nav has increased and their cash position after the investment in the ALU site looks to be over 3Million. they could just about manage 80%LTV.

The Trust's existing borrowing facilities with Barclays Bank PLC terminate on 10 February 2015. The Board continues to pursue its options in order to support the settlement of the bank borrowings as they mature, including a combination of realising equity through asset sales and potential financing alternatives.

I read this as their is no decision made. but whatever suits your agenda?

[fenners66] 15/11/2014 02:22

Senor S as I said already:


Back to have a look after the IMS.
I said at the time of the bank deal there was no way out otherwise they would not have agreed to it.
Even now they talk of adjusted NAV instead leaving us to add up the numbers typical attempt at smoke and mirrors!
£7m NAV so really no more than 6p per share but with FEB fast approaching still no sign of financing and they will be getting more desperate.
I really should have shorted these - arguably worth zero.

Why state adjusted NAV ? *Adjusted NAV - unaudited, after adjustments for the interest rate swap derivatives and 50% of the deferred tax provisions.

What does that mean? Certainly not adjusted down? For the past half a dozen years they refused to declare the FX swap position saying everything was rosy , they lo and behold it nearly bankrupts the company.
This more of the same.
Are you in denial? Do you believe companies cant go bust? Or are you paid to give undying support?

They still have no plan as to how to pay off the debt.

[senor_sensible] 14/11/2014 16:51

NET assests looks to have increased compared to June statement could be as much as 17%.....IMO :-) shame they only posted the adjusted NAV in todays statement.

[senor_sensible] 14/11/2014 15:44

lol,
property is worth 217 Mil
borrowings is 210 mil
leaves 7Mil, market cap is 1.5Mil today

or so some would have you believe.

anyone care to take a guess on how much cash in the bank?????? got the recent sales, also got the recent investment in ALU site, it was 11 Mil at end of june with recent sale and investment .

Like I said, anyone in any doubt should get in touch with the company.

[sleepy] 14/11/2014 14:26

1634 - WTFDIK - Well said Senor.

Is that the most sensible comment the Senor has made on this thread?

[senor_sensible] 14/11/2014 12:08

Sorry, news release on 2nd September. not December.

Could end the day positive :-)

[dogwalker] 14/11/2014 11:37

Thanks S_s. Let's hope that 3rd party appears ahead of next Feb..

[dogwalker] 14/11/2014 11:05

Senor_sensible, Surely the company itself won't be prepared to discuss or fuel speculation.
There hasn't been much speculation about that I've found, other than about the company going bankrupt.
If you know something specific better, do say here.

[senor_sensible] 14/11/2014 10:38

:-) suggest anyone in any doubt should get in touch with the company, give them a call because lots of speculation being banded about. Also, ALU site is jewel in the crown, why would you want to get out of that!!!!!!! ALU have very ambitious growth plans and the French economy recorded 0.3% growth in the last quarter.

"The growth, together with stronger-than-expected expansion in France of 0.3%, helped the eurozone as a whole to grow by 0.2% in the quarter."

"In France, President Francois Hollande welcomed the country's latest growth data as a sign that it could reach its new target of 0.4% growth for the whole year. "

[fenners66] 14/11/2014 08:08

Back to have a look after the IMS.
I said at the time of the bank deal there was no way out otherwise they would not have agreed to it.
Even now they talk of adjusted NAV instead leaving us to add up the numbers typical attempt at smoke and mirrors!
£7m NAV so really no more than 6p per share but with FEB fast approaching still no sign of financing and they will be getting more desperate.
I really should have shorted these - arguably worth zero.

[sleepy] 14/11/2014 07:58

Agree Pug.

If, and I stress the if, they sold the Alcatel property in time would that reduce the LTV enough to "get them out of jail"?