Why am I sill hanging on to these ?
Am I the only one ? |
This is the bloke behind the RoyaleLife loan |
 Longbow revalues loans as property and debt markets deteriorate
The £33m trust said UK market conditions made its managed wind-down difficult as high interest rates and high inflation impacted property transaction volumes.
Jamie Colvin
BY
JAMIE COLVIN
comments
UK property debt fund ICG Longbow (LBOW) has flagged a possible write-down of its remaining portfolio as ‘deteriorating property and debt market conditions’ blighted its managed wind-down.
The former £91m investment company, which has dwindled to £33m as a result of three years of disposals, said UK commercial property and markets had been difficult as it launched a review of its valuations. It will update these next week.
‘In light of deteriorating property and debt market conditions during the six-month period to 31 July 2023, the investment manager and board are reviewing the carrying values of all remaining assets,’ it stated. ‘It is expected that this exercise will be concluded shortly and further discussion and disclosures made in the interim report and accounts.’
In terms of individual loan news, Longbow said it had appointed a receiver over the property securing the £17.3m Affinity loan, which will now be re-marketed for sale.
The prospective purchaser of the £15.2m Southport loan investment in a hotel has withdrawn its conditional offer, citing challenges in meeting several conditions. The hotel has traded profitably in the year to date and the administrator has re-launched the property sale.
Administrators have been appointed across the wider borrower group structure for the £25.4m RoyaleLife Loan, and the investment manager is pursuing several concurrent strategies to protect the value of the underlying property security and maintain operations at the parks.
Potential options include a business sale, individual asset sales and the introduction of strategic partners or a new management team, all of which are being pursued.
In late 2020, the board decided to wind up the trust, despite its best shareholder returns since launch seven years previously, as share prices recovered and sentiment improved. It recognised that the high-yielding trust lacked scale and investor appeal.
Since then, the shares have fallen 44% to 29p, a 73% discount to the July net asset value per share of 98.21p. |
ICG-Longbow Senior - Return of Capital and NAV
Date/Time: 11/08/2023
11 August 2023
ICG-Longbow Senior Secured UK Property Debt Investments Limited (the Company)
Return of Capital and NAV
Following further partial repayments of the Northlands Loan bringing the receipts since 31 January 2023 to approximately £9million, we are pleased to announce a further return of capital to investors of 7.40 pence per ordinary share to shareholders, being £8,976,405 in total based on the number of ordinary shares in issue. This return of capital will be effected by way of an issue of redeemable B shares to existing shareholders pro rata to their shareholding on the record date set out below and the subsequent redemption of those B shares.
The estimated unaudited NAV per share as at 30 April 2023 was 57.67 pence per ordinary share. The estimated unaudited NAV per ordinary share as at 30 April 2023 adjusted for the return of capital would be 50.27 pence per ordinary share.
Post the return of capital, the Company will have returned an amount of 44.90 pence per ordinary share to shareholders being £54,464,947 in total.
Further properties within the Northlands portfolio are under offer for sale and their completion at the amounts offered will see the loan repaid in full together with interest and exit fees.
UK commercial property market conditions remain difficult due to high interest rates, high inflation and low property transaction volumes. The Company and the Investment Manager are actively seeking to expedite repayment of the remaining loans and secure the best returns for shareholders. The Company is unable to provide further detail at present to protect sensitive commercial negotiations but will make further announcements in due course. |
The 'Affinity' offices are
hxxps://www.spectrumbristol.co.uk/
It's described as being 114,000 sq ft (ICG reference Affinity as 114,364 sq ft) and according to this - hxxps://www.insidermedia.com/news/south-west/nhs-shared-business-services-relocates-in-bristol - it was acquired by Affinity Global Real Estate in 2016.
According to this - hxxps://www.egi.co.uk/news/impact-capital-readies-flex-offices-launch-with-spectrum-buy/ - the building was bought by Impact Capital Group in 2020.
From what I can see Affinity Global bought the property via the company Templar Commercial Properties Limited (Company number 10349757). On 2 March 2018 ICG Longbow registered a charge against the leasehold property known as Spectrum House - see Companies House filing. It looks like the company was acquired, with loan from ICG, by Impact Offices Limited on 21 October 2020 and renamed Impact Spectrum Limited.
According to the last set of accounts 30 August 2021, the Spectrum property was valued by 'Independent Chartered Surveyors' at £28.2m and there is a bank loan of £17,258,191 covered by a fixed and floating charge over Spectrum House.
The offices looks good quality in a good location. Would have though there was a pretty good chance of ICG getting their loan paid in full. |
Taken a look at this and the company behind RoyaleLife is Time GB Properties Ltd which is privately held, with 60+ trading subsidiaries. This is topco and is in administration. The loan attracts interest of 8%.
You can see the developments here
hxxps://www.royalelife.com/
range from 200 to 450k depending on location and spec. Quite a few sites still under development but some are progressing to sales so should get some cash coming in. Not my idea of a place to retire to but i suspect plenty of people looking to downsize can find the money to buy them.
So Time Share were trying to refinance to pay off ICG but failed so seems most likely outcome here is the loan maturity gets pushed back and potentially interest rate gets reset. They may also have to write off missed interest payments but all in all there should be something out of this.
So its trading around 80% below NAV (from the last sale not FY22 data) so ought to be an upside for the patient but ICG needs to cull the overheads back as there is very little to do. |
I don't think they've updated their website for a good year now |
OK, 10 individual parks makes a lot more sense. I think they need to make that clear on their web-site as it just looks stupid! |
What about when mirrors are involved?
Much as I would like to spend £4m on a bungalow, I think the property represents 10 bungalow parks. LBOW is lending alongside other ICG funds. Here is the initial loan info.
"ICG-Longbow announces loan to bungalow housing company RoyalLife – ICG-Longbow Senior Secured UK Property Debt Investments (LBOW) has entered into a new £24.6m loan commitment to an affiliate of RoyaleLife, a UK-based provider of bungalow homes. The trust is participating in a larger £142.7m loan facility alongside two other funds managed by the manager.
The loan will refinance a portfolio of 10 assets in the residential bungalow homes sector. It carries a four-year term and has an initial LTV ratio of 78.9%." |
The loan outstanding on the 10 bungalows is £25m!
hxxps://www.lbow.co.uk/investments/portfolio-investments
Blimey, they are expensive bungalows. £4m each at 61% LTV. Not invested here, but do have shares in Intermediate Capital.
Be interested in what TW has to say...my experience with TW is that he is not normally attacking quality companies, so you need to pay attention to / avoid companies he is attacking. There is no smoke without fire! |
free stock charts from uk.advfn.com
LBOW log chart. Very bearish and has been for over a year. |
Have heard today through industry news that Royale have just pulled a very large order for caravans, reason being poor UK sales.
Also heard that owners of Royale have created a new company funded by one of the largest USA parks company, Sun Communities. Newco 100% owned by existing owner of Royale Life but set outside of the group, looks like they are preparing to buy assets from existing business when the opportunity arises. |
Looks like somebody isn't convinced by the report... |
Has anybody actually seen the Shareprophet report ? |
Third Party valuation was increased in 2022, used to be 70+% LTV. Third party valuation though and limited influence for LBOW.
Worth noting on the hotel that the significant shortfall reporting is referencing the operating company. That company only has c.£1.9m of assets so obviously a signficant shortfall (but not meaningful reporting!). The proposals for the main hotel owning company do not have the same statement. Based on their estimate (bearing in mind recovery across both companies) LBOW just about get paid in full (at £16.2m - presumably some extra default recovery in there).
However, their estimate of the recovery value (£17.5m - £15.6m Propco/£1.9m Opco) could be too high. |
Hmm...don't know what to make of that. According to the last factsheet the RoyalLife loan was the biggest loan at £25M and had a LTV of 60.9. It's secured on residential assets (10 bungalows). For this loan to be nowhere near covered would obviously mean a massive writedown in the value of the properties. |
Ok. Cheers. |
The asset is worth nowhere near the loan value |
What is it alleging? |
The bear report concerns the Royal Life loan |
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