European Real E Share Discussion Threads

[spob] 05/4/2017 14:11

La Gaude sold

38% discount

[redhill9] 21/11/2016 10:48

Maybe, but latest book value should already reflect the difficult circumstances surrounding selling La Gaude so perhaps any discount might not be too great. Don't forget current NAV should be around 225p or more so some discount for a quick-ish sale would be very acceptable.

The "liquidation of remaining corporate entities" referred to in the RNS will be good to see completed if they can do so without unexpected complication or unexpected cost.

[eezymunny] 21/11/2016 09:29

Reads to me like a softening up exercise for a sale of La Gaude below book value, but it's all very woolly still!

[redhill9] 21/11/2016 09:04

Thanks spob. Doesn't tell us a great deal we didn't know but at least they are intending trying to sell La Gaude as soon as possible without necessarily waiting for the local authorities to approve change of use.


Strategic Review

As advised in the most recent report and accounts, a strategic review of the Company has taken place between the Manager and the Board. Following the sale of the Panrico assets on 28 July 2016, La Gaude in Nice is the Company's last remaining property and needs to be sold as soon as practicable to ensure the liquidation process can be completed.

The conclusion of the review was to continue with the liquidation of remaining corporate entities, reduce costs as the structure becomes smaller/less complex and begin a formal sales process of La Gaude as soon as possible. Given its specific characteristics La Gaude is not a liquid asset. The Board are therefore considering a range of different options to dispose of the asset. The timing of a sale and the eventual realisation amount remains uncertain.

In the meantime the Investment Manager continues to engage with the local Mayor and development authority in La Gaude/Nice with the objective of achieving as much clarity as possible on the possible future use of the site. It is increasingly clear that any process by which the zoning of the site or local plan might be amended to reflect a change of use e.g. to residential or another viable alternative will be protracted and hence is likely to be beyond the anticipated life span of the Company.

[flyfisher] 19/11/2016 07:52

CBRE, Have all buildings at la gaude as available for rental in office / laboratory suites of 1000m2 upwards.


hxxp://www.bureau.cbre.fr/property/a-louer/bureaux/06610/la-gaude/90603759.aspx

[flyfisher] 13/9/2016 10:12

Rob, The trade of just shy of 1.3m is matched by four others to the same amount, it looks like a stake being placed at mid market price.

You asked a good question the other day, perhaps schroders could provide the answer.

[cockerhoop] 12/9/2016 21:31

Regards the recent conversion of Euro's to £, the £4.7m would take a further 2 million shares out of circulation if returned to shareholders.

[robizm] 12/9/2016 21:09

The voloume says 2.5 million which is 34% of the shares in issue

[flyfisher] 12/9/2016 17:12

1.3 million is a very large trade for eret, is it the karoo holding being sold?

[robizm] 06/9/2016 20:22

What does the insurance policy cover out of interest

[flyfisher] 05/9/2016 17:27

n1mgn, The reason that more cash has not been returned is that until potential tax liabilities are resolved, they may need it.
The company alluded to that a while ago, commenting that the issues could take years to resolve and restrict our ability to return funds.
I see the switch of cash to £ sterling as a positive in that respect, if they expected to have an imminent tax bill in euros then they would not be switching it.

As previously commented I sold out of this recently, mainly due to disappointment in the price achieved for the Spanish assets, I had expected a sale to a Spanish socimi at a better price. I was wrong, but had the good luck to have a surprise lift in the nav at half year, which gave a decent exit point.

The market has a habit of making my workings look daft.

Good luck

[n1mgn] 05/9/2016 13:07

thank for your reply Flyfisher , of course if it was that easy to make money everyone would be on it .

My opinion is that a large proportion of the cash will be returned soon , i expect another 35% of the shares at 235 . if i am right then my holding would bring the average down to circa £1.10 ish if you bought around here . I think the property value in Nice is on the books at a price the company believes it could trade sell it as is. My personal view is that this the probable outcome .

as for the tax situations , you are probably a lot better qualified than myself , but i do think that the fund managers would have taken very good advice on this .

I guess the different of opinions is what makes a market . we will have to see how this plans out. But i very much appreciate your opinions.

Best

[actofwill] 05/9/2016 12:57

Hi flyfisher - could you please explain a bit more on the potential "compulsory purchase order" and the French law surrounding that? At what price does that typically materialise?

[flyfisher] 03/9/2016 11:43

No brainer, my goodness it is anything but that.

Pick any,
1. Try to sell a listed building
2. Try to get planning permission for a listed building
3. Local mayor having ''ring fenced the plot'', whatever that means
4. Planning change of use, potentially not achievable until 2018
5. 13 subsidiaries to close with associated sets of accounts
6. Issues in closing down some of the german subsids, there was a note in the accounts a couple of years ago that observed potential liabilities of up to E 9.8m, which are unlikely to occur and have not been provisioned, but could occur.
After the sale of german properties in the past, some of the holding subsids have not been closed, but have been merged into another subsid. ie the tax problem associated with the sold property has not been resolved, but merged with another.
What is the cost of an international tax accountant / lawyer to resolve these issues

If they can resolve the tax issues and close the subsids at a modest cost and perhaps get planning change of use for a hotel, then yes I see good potential.
However, what if the costs of tax issue resolution are high and the local council put a compulsory purchase order on the property. Or worse still, some listed building society get involved in slowing the process.

Good luck.

[n1mgn] 03/9/2016 10:23

I had a nibble yesterday after the news , just going to buy small amounts on any dips , The announcement suggests to me , they will very likely be another buy aback at 235 soon , and I guess 40 / 50 % of stock , Easy numbers means anything I buy now and get say half out on buy back at 235 , brings my price on other half down to below a pound , Nav I doubt will change much in short term and long term if anything potentially a lot higher . My cash in the bank earns nothing , so I see this this as pretty simple trade , just how long my cash tied up for . Even if it's 4 years ( highly likely it will be a lot sooner as they want this closed ) 40% on u money with this risk profile a bit of a no brainier. I just hope I get a chance to buy some cheaper !! Good luck everyone

[robizm] 02/9/2016 20:06

Could it be yet another distribution on the way

[eezymunny] 22/8/2016 08:44

Well my guesstimate for working capital numbers were out by a considerable margin. I'll need to see the next results (if there are any!) to see why.

NAV should still be c. 235p/share but there's a lower ratio of cash/market cap than I'd guesstimated.

The comments re La Gaude are impossible to decipher IMO

"This office property is vacant and likely to have a higher value as an alternative use"

"The development of this site is in large part dependent on planning changes that may come through in 2017/2018. Such changes are uncertain. The Board and its manager
meet local officials, planning authorities, architects and advisers on a regular basis, however there are costs to maintaining the empty site (insurance, rates, security and similar) of circa €700,000 per annum. We are considering a number of options for the site however the sale of La Gaude, its timing, and the eventual realisation amount are uncertain."

So final proceeds could be higher or lower than current NAV but we can only guess IMO. So I've sold some more (pretty much locking in a certain ultimate profit on the trade) and kept a tiny few in case we get lucky.

Your thinking was impeccable flyfisher. Well done.

[martincc] 18/8/2016 15:02

latest redemption money just arrived in my TD account

[eezymunny] 18/8/2016 13:51

Don't rely on my numbers. It's impossible to be precise because we don't know everything (eg what was held in what currency at particular dates). Suggest you do own spreadsheet to examine the ups and downs.

[n1mgn] 18/8/2016 13:36

thank you ,

it will be interesting to see the interims next week , personally i hoping it dips to 170 and then load in , with a minimuim NAV at 235 that 305 return , at worst case 2 yrs , but more than likely this will be done and dusted by xmas , even if they get rid of la gaude at Nav with a carry .

could be interesting

good luck all

[orinocor] 18/8/2016 13:15

n1mgn I'm going by eezy's calculations which look about right to me. Go back thru the previous results and the disposals, and subtract the payout so far.

I defo see another big redemption at 135p. They will take stock and decide how much they want to keep as a buffer but I'd think £5 million at least.

La Gaude was valued at E40 million before so who knows how much this asset could be worth.

[eezymunny] 18/8/2016 12:59

Indeed fly. I was surprised I could sell some post red at 200+p.

The discount is still reasonable and there's a lot of cash making up that NAV.

Clearly there are risks but I'm pretty happy with the risk/reward with what I have left.

[n1mgn] 18/8/2016 12:23

Hello Orincor

How Do you arrive at 13.6 m of net working capital / cash ?

this is the figure i am very keen to work out ?

thank you in advance