Hirco Share Discussion Threads

[loverat] 11/8/2013 08:44

Is it time to take a risk on these?

Looking at the chart, even without clarity on what is going on there is possible substantial upside in share price percentage terms. On the other hand, unlike before perhaps, with recent press articles, could matters be perceived to be coming to a head soon, hence the recent accelerated fall? Deceisions, decisions.

[praipus] 07/8/2013 09:17

HVS so's the UK government and UK banking system....I think it's just part of the human condition and everyone should manage their portfolio accordingly:)

[hvs] 06/8/2013 18:00

INDIA is CORRUPT to the Carore

Watch STAR TV

[nilip] 06/8/2013 15:08

Realty sector stares at defaults as banks may tighten screws

The recent defaults by real estate developers such as Orbit Corporation, Hirco Plc's local arm and HDIL promoters could lead to more such cases as realty companies could face tough borrowing norms and could be forced to cut home prices to generate liquidity.

"Cashflows of many realty companies are 20-30% of their total indebtedness. Even if they sell assets and take a haircut, that does not seem to pay back their loans," said Amit Goenka, managing director and CEO, Essel Financial Services, part of Essel group.

"There would be more defaults as RBI has ruled out further restructuring. Markets have also not improved, which would have helped developers," Goenka added.

First, rating agency Brickwork downgraded Mumbai-based Hubtown for defaulting on repayment of interest and principal on Rs 100 crore non-convertible debentures early this year. Early this month, Indiabulls Housing Finance declared Rakeshkumar Wadhawan and Sarang Wadhawan, promoters of realty company HDIL, as loan defaulters. Their loan accounts have been classified as non-performing asset.

On Monday, LIC Housing Finance said Orbit Corporation has defaulted on interest and principal dues of Rs 96 crore to it and declared the account as NPA.

Early this year, it was reported that Tata Capital dragged Hirco Plc's Hiranandani Palace Garden to court for default on repayment of interest and principal of Rs 100 crore towards non convertible debentures (NCDs).

A K Prabhakar, senior vice president-equity research, Anand Rathi Financial Services said: "Once names of defaulters come out, prices of properties will shake. Those under distress will cut prices. But that does not mean buyers will buy. If interest rates go up, that will create negative impact in the market."

Some say bankers would become stricter in lending to developers after the defaults.

"It (defaults) means banks will become more judicious and meticulous in lending and ask for higher collaterals. It will become difficult for the industry as a whole to borrow loans," said Shobhit Agarwal, managing director, capital markets at Jones Lang LaSalle.

Agarwal said since the listed companies have also defaulted on payments, the loan agreements will become uniformly stringent for all developers.

"Earlier, AAA rated developers could get different agreement and treatments. Now bankers may do away with that practice," Agarwal said.

According to RBI data, the credit to the commercial estate sector grew by 15.4% in 12 months in June 2013 to Rs 1,33,900 crore from Rs 1,16,000 crore in June 2012. The pace of lending has seen rise in last one year (ended June 2013) over 10.9% seen in June 2011-June 2012 period.

Why default

Lower sales and high indebtedness is said to be reason behind defaults in the real estate sector.Property registrations in Mumbai saw flat growth in June 2013 after 15-20% growth in April and May of 2013

"Many real estate firms in Mumbai are facing financial stress and some of them may be on the verge of default. While real estate prices are high, the movement of stock (sale of properties) is very small. It is sign of bad times remain high," said a banker from public sector bank.

Goenka of Essel Finance believed that most of real estate projects were loaded with debt with assumption that these projects would run at 100% run rate in terms of sales and cashflows.

"Even 10 to 20% downside in sales or pricing would create mismatch in repayment. If that downside goes up to 70 to 80%, it would have huge negative variants on business plans," Goenka said.

[scburbs] 03/8/2013 18:47

This guy is a comedian, who does he think has all the voting rights and who does he think is managing the project.

"Niranjan Hiranandani, the former chairman of Hirco, in his response to ET's query, said he has not been connected with Hiranandani Palace Gardens since his resignation from Hirco."

The plan is clear, Hiranandani will force Hirco to sell or will try and buy the property out of the current vehicle at an amount which will settle the lender.

Not just India, insolvency law worldwide needs to be amended to prevent insider management teams ripping off shareholders. Pre-pack in the UK is one of the main offenders.

[kenny] 02/8/2013 16:40

This does not look like good news' scrool down on that page to read the full article: hxxp://articles.economictimes.indiatimes.com/2013-07-26/news/40815133_1_term-loan-hiranandani-group-hirco-plc

[loverat] 02/8/2013 16:15

I was reading the last statement this afternoon and yes, it does look a mess. I was quite intrigued by the wording which was very open and frank. And then it went on to place quite alot of emphasis on trying to extract the best value it can from this mess.

I suppose if you believe the statement was trying to convey a message you might be forgiven for thinking they were actively working on an exit strategy and had something in mind.

Anyway, this might be a speculative play, perhaps with minimal downside at this level. From just vaguely watching this company in the past I certainly think the shares are worth much more than this. Even 50p would look very good for newer investors who have not suffered the pain of holding over the years.

[david_99] 26/7/2013 09:20

Looks like PI's are going to be left with nothing here.

With all the legal and corrupt shananigans going on here I just can't see PI's getting anything in the end.

[kenny] 08/7/2013 23:41

Do we now have the Abu Dhabi investment company (NOOR) taking a 15% stake? If so, this could be very interesting because they certainly will have the funds to build out Hirco's property developments in India and take the necessary long term view.

They might have more chance of doing a deal with "the family" than the current board of Hirco. Any such deal would likely be tied in to NOOR buying Hirco.

Perhaps in the near future we will have to consider the question "what price for our shares?"

[loverat] 03/7/2013 13:18

Good afternoon.

Is this a property company or has it evolved into a law firm?

[scburbs] 28/6/2013 15:44

I get the impression the board want some credit for telling it like it is. Unfortunately all it does is make it plain that they don't have a scooby about what to do.

Other than an indication as to how much of the cash reserves they have burnt the results are completely pointless.

[horndean eagle] 28/6/2013 15:35

Agree not all is lost but these mark to market losses are beginning to get particularly painful. I expect further downside from here although given it should be another 9 months before we get another wrist slitting inducing commentary I would hope it won't be too bad. What is really annoying is the uncertainty over everything. I am now even preparing for myself for the prospect that the assets might actually be worth zero with bank debt consuming any value in the project. What we were told years ago was that after the first phase there would be a significant cash surplus. With Indian rates of 14-15% compounded over 5 years I doubt very much whether that is the case.

The mooted 55p offer by the family was flatly denied by advisers here. They don't really have any credibility left in my eyes so it may well have happened. Weiss won't accept that. They would want nearer 100p imho. The family look like they are going down the route of screwing the whole project over for everyone at present. They have apparently stopped work and are blaming HRCO for this. Therefore need arbitration settled pretty damn quick.

[kenny] 27/6/2013 15:12

Horndean Eagle - you are a long tem holder and know a lot more than me about HRCO. However, it appears to me that all is far from lost. There appears little that is new in today's statement. Indeed, the positive comment is the Board are seeking an "exit". The Family have offered 55p per share having offered 100p a year before that.

The company raised £370m and most of that has gone on land and buildings followed by part of it being recycled after sale of some of the properties built, into building more properties. Surely therefore the current market capitalisation of £25m is a fraction of full value - even 55p is only about £55m?

[horndean eagle] 27/6/2013 14:31

Turning into a nightmare here. Must as I blame the Hiranandani's for most of this mess I don't believe the board should go blameless. Waiting as long as they did for arbitration has really screwed things up for us. Now we get the bombshell that the projects will need more equity as well. Or at least should it really be much of a surprise given the Hiranandani's already warned us of this back in 2011



At the time shareholders might have been a bit sceptical of what was being said but they have been proven right in the fullness of time. We could do with more disclosure about the state of the finances at Burke and the assumptions used in the NAV calculation. When arbitration is due might also be helpful. Unfortunately Weiss have taken effective control of the company and it seems as totally disregarding the rights of other shareholders.

Its not all totally lost here and I will add lower down but there is hardly any rush given a)lack of any arbitration dates and b)the prospect of another uplifting result commentary for another 9 months.

[hvs] 27/6/2013 13:40

Only INDIANS can behave like this.

BE-sharam.

[hvs] 14/6/2013 13:27

Dakus and Dacoites thats INDIA

[nilip] 14/6/2013 13:07

I considered the 15mln may be some sort of xfer between funds, but wasn't sure whether it needed to go through the mkt in that manner.

I agree, Weiss would likely take 100p now.

Still gives us x3 current share price

All things considered, assets and all, even if exaggerated, the result would have to be a multiple of the current share price no matter how you shuffle the deck.

[horndean eagle] 14/6/2013 12:47

I picked up 100k last month sub 30p. I am tempted to add more but I want to see who picked yesterday's holding first. Personally think it was probably just Weiss crossing the position across funds. I spoke to the company about Indian reports of a bid and was told not to believe what is put about in the Indian press. I think Weiss would probably sell out for a £1. If they can get a favourable verdict from arbitration and remove the Hiranandanis from the project then I think we could get a lot more than that. Unfortunately the company aren't very communicative so its difficult to tell what's going on exactly. Ive read that work has stopped in Mumbai because of the dispute.

[nilip] 14/6/2013 12:00

Horndean Eagle,

Are you tempted to add here ?

I noticed the 15 mln go through yesterday and figured that something must be coming to a head which would have to invariably result in shareholder value being realised in some shape or form.

15mln share transaction is ~15% of the company.

I added a few k's worth yesterday.

As we know from the article above, the company has already truned down a £100mln offer against a current mkt cap of just £30mln ish.

Against that sort of back drop you'd have to say the share price should be at least x3 the current share price

Value will out soon imo.

[mister md] 14/6/2013 11:14

thanks for your thoughts - seems a case of sitting it out then

[horndean eagle] 14/6/2013 11:06

long term holder unfortunately. I eventually expect to get a pay out here. One way or another. Hiranandani has enough money and assets to go after if he decides to screw us over. Either we get control of the projects or get him to pay up compensation. Either would result in a multiple of the current share price.