European Real E Share Discussion Threads

[redhill9] 08/8/2016 07:27

Yes, the next redemption is to be at 235p per share. The last paragraph in the extract below looks interesting suggesting further information perhaps on La Gaude with end of August statement.


8 August 2016

European Real Estate Investment Trust Limited ("the Company")

Return of capital

Further to the announcement made on 1 August 2016 in respect of a return of capital of €20.7m, the Board is pleased to confirm that the Seventh Redemption will be effected at the estimated unaudited Redemption Net Asset Value per share as at 28 July 2016 of 235 pence per share. The NAV per share of 235p (including the distribution of 30 pence per share made on 4 August 2016) is an unaudited estimate and will vary contingent on a number of matters including the sterling euro exchange rate and the realisation proceeds from the La Gaude asset when that asset is sold. There may also be liabilities associated with representations and warranties that have been given in respect of properties sold. Any liquidation costs associated with the structure are not included in the estimate of NAV. The Redemption will be effected pro rata to holdings of shares on the register at the close of business on the Redemption Record Date, being 11 August 2016. On this basis 49.00 per cent. of the Company's issued share capital would be redeemed on the Redemption Date.

The Board will be reviewing its options in respect of its remaining assets in due course and will look to give further information in its interim financial statements expected to be released at the end of August 2016.

continues.......

[cockerhoop] 05/8/2016 09:55

Orinocor,

It's the change in ISIN overnight that's probably caught them out.

[spob] 05/8/2016 09:53

ring them up

[orinocor] 05/8/2016 09:10

thanks. I tried getting a quote to buy but as from this morning my broker does not recognise the symbol ERET

[redhill9] 05/8/2016 09:02

Orinocor, RNS 1 August 2016 below. Also see discussion in posts above over last few days. Still value to be had here I think.

European Real Estate Investment Trust Limited ("the Company")

Return of capital

Further to the approval by the Company's shareholders of the winding down proposals (as described in the Circular to shareholders on 12 July 2011) the Board is pleased to announce a return of EUR20.7m, being a substantial portion of the proceeds from the Panrico sale (equivalent to 115 pence per share) on 11 August 2016 (the "Redemption Date") by way of a compulsory partial redemption of shares (the "Seventh Redemption").

[orinocor] 05/8/2016 08:43

I must have missed that. Where does it say the 2nd redemption is due next week?

[redhill9] 05/8/2016 07:43

Yes, now they've announced the effect of the first redemption presumably we'll get an RNS giving the full details of the second redemption due next week. It will be interesting to see what NAV they announce as being effective for the second one - an uplift on the 225p used for yesterday's is assumed, but by how much?

[redhill9] 04/8/2016 11:11

Rate dropped as expected but I suspect this is already priced-in at current euro exchange rate so unlikely to be substantial resulting movement.

[janvrot] 04/8/2016 10:23

Come on mark.....drop those rates by a massive 25bps. The weaker pound will boost my investment in eret. This weaker pound has done wonders for eret nav, soon La Guade will be more valuauble than luxury houses in London.

Take the free lunch and print.

[redhill9] 03/8/2016 15:12

Yes, it isn't totally clear from the announcements but my understanding is that purchases up to close of tomorrow 4 August are eligible.

Quote from the 21 July RNS: The Redemption will be effected pro rata to holdings of shares on the register at the close of business on the Redemption Record Date, being 4 August 2016.

I've bought more today in 4 tranches in different portfolios at prices from 203p to 203.5p as a trading holding to add to my core holding. If the share price does funny things after the redemptions are over (such as reducing by more than it rationally should, as often happens with these redemption situations) I intend buying more.

For anyone not familiar with such redemptions, as the redemption is at NAV the NAV after the redemption is unchanged however because the proportionate composition of the NAV has changed between cash and assets (cash proportion goes down, therefore assets proportion goes up) where a share is trading at a discount it is reasonable for the share price to reduce to some extent to reflect this theoretical increase in risk. However, often the share price will initially reduce by too much (caused perhaps by some not fully understanding the mechanics of the redemption or simply not liking the change in asset mix) providing a buying opportunity.

[orinocor] 03/8/2016 12:35

ok and I read that to mean you are agreeing with eezymunny's interpretation which is that if you buy today you will get the redemption.

[flyfisher] 03/8/2016 12:30

Guys, I have had a couple of redemptions here. They simply issue a new ISIN number after close on the redemption day, so any deals under the old ISIN get the redemption, the following morning they are traded under a new ISIN which does not get the redemption.

[homebrewruss] 03/8/2016 11:11

I bought some earlier today too.
Nice drone footage of the remaining property:

[orinocor] 03/8/2016 11:01

thanks eezy, I agree with your interpretation and have bought some.

[eezymunny] 03/8/2016 10:32

From Computershare - who deal with the CREST settlements etc

"Further to your phone call regarding the redemption announced on 21 July, where it states that CREST will automatically transform any open transactions as at the Redemption Date into the New ISIN, it means that any transactions which remain unsettled as at the record date will be automatically deleted and replaced by a new transaction in accordance with the benefit specified within the corporate action event.

In this instance an outstanding purchase of shares would result in a new transaction for the shares which would be retained following the redemption under the new ISIN.

The market claim would relate to the redemption proceeds."

Which says to me that if you buy today you WILL get some of your shares (13.3%) redeemed at 225p as per the redemption with record date tomorrow close of biz. IIUIC!

[eezymunny] 03/8/2016 10:02

It's VERY confusing orinocor. The Aug 4 redemption notice appears to conflict itself. I'm awaiting clarification and will let you know.

[orinocor] 03/8/2016 09:51

Yes I read that. The thing that confuses me is you have to be on the shareholder register at close of business on 4th. Maybe I've got this wrong but does it not take a day or 2 after you buy for you to actually appear on the register?

[homebrewruss] 03/8/2016 09:46

orincor I think you have until close of business tomorrow to buy shares and qualify:

[orinocor] 03/8/2016 09:40

LOL I still do not know if I can buy today and qualify for the 30p redemption tomorrow. My guess is if I buy today I will not be on the shareholder register at the close of business tomorrow but I'm not sure. Does anyone know how this works?

[eezymunny] 02/8/2016 15:56

Yes, that w/c provisions release is already in my sums. We can only guess as there are a few moving parts.

I've been buying more for exactly the reasons you mention. We're going to get 145p/share redeemed at 225 or above (so all those redeemed will be profitable) and the rest will still be valued well (miles?!) below NAV post redemption (tho there's risk, clearly, on the outcome for the remainder).

They are keeping some cash back from the Panrico sale, presumably to fund La Gaude running costs or (if they see fit) capex. So risk there, but they do say somewhere that they think La Gaude worth more than current NAV if change of use granted etc.

[redhill9] 02/8/2016 15:45

As I say it doesn't make much difference if you plan to hold to the end but makes a diff if you are thinking of selling at some point.

True, but since playing with the figures I was thinking more along the lines that it could be worth buying more for a probable short term adjustment upwards in the share price (from my theoretical break-even figure of 143.6p) once the share redemptions are out of the way and the discount recalibrates itself.

You may be right about the tax, but I'd been assuming the uplift in NAV was due to this extract from the 21 July RNS about mitigating potential future liabilities by insuring against them, thereby releasing working provisions.

Together with the Company's advisors the Directors have undertaken a further review of potential future liabilities of the Company and have taken the decision to enter into an insurance policy to mitigate the likelihood of some of these liabilities crystallising. This has enabled the Company to release working capital provisions of GBP3.8m in the accounts and facilitate a distribution of GBP5.3m which will take place as a compulsory partial redemption of shares.

[eezymunny] 02/8/2016 15:32

I had confirmation from Schroders (the investment manager).

It means the redemption this week is being done at a discount to NAV (most likely). That means the NAV per share after this week's red'n should be even higher than 225+10, so second redemption could conceivably be 236p+.

As I say it doesn't make much difference if you plan to hold to the end but makes a diff if you are thinking of selling at some point.

I can't work out how they got to the Jul 15 NAV of 225p. Most likely guess is that they've had a tax refund "The tax positions are significant and potentially could take many years to resolve. The French tax authorities undertook an audit with respect to the property held at La Gaude and in 2014 raised an assessment of €2.2 million. During 2015 the full liability of €2.2 million was paid. Our tax adviser, KPMG, are of the view that this tax assessment is incorrect, but advised that making this payment would reduce the
interest and penalties which would accrue during the process of
challenging the position taken by the French tax authorities. Given
that recovery is uncertain and we will need to go through the French
tax and legal process to effect recovery, this amount has been
included in full as a tax charge in the Group’s Financial Statements"