Inland Zdp Discussion Threads

[davebowler] 27/9/2023 14:27

RNS Number : 8773N

Inland Homes PLC

27 September 2023

Inland Homes plc ("Inland" or the "Company")

Notice of intention to appoint Administrators

Cancellation of admission

The directors of Inland Homes plc advise that they have resolved to proceed with the process of appointing David Hudson and Phil Armstrong of FRP Advisory Trading Ltd as Administrators of the Company and that certain of its subsidiaries which have granted floating charges have today filed notices of intention to appoint Administrators. This announcement provides background to this decision.

Financial statements preparation process

On 24 July 2023, Inland announced the outcome of a review by FRP Advisory Trading Ltd (FRP) into related party relationships and transactions and other matters. As part of the process to complete the audit for the year to 30 September 2022 ("FY22"), Inland commissioned a further limited review by FRP designed to identify, amongst other matters, whether control breaches or incomplete disclosures impacted other areas of corporate governance and financial reporting in the period 1 October 2020 to 30 September 2022 including material judgements and estimates.

The review conducted by FRP, on which they reported on 22 September 2023, has provided sufficient indication that further work is still required into material judgements and estimates applied to the financial statements both for the year to 30 September 2022 and for the year to 30 September 2021 ("FY21") before the preparation of the financial statements could be completed and then audited.

The extent of further work and cost required to complete the preparation of the financial statements and the audit for FY22 cannot be certain at this stage, and the timeframe within which this might be feasible is not known.

The Company continues to be in active discussions with HSBC regarding waivers for the breaches announced on 11 September 2023. Inland also anticipates that it is likely to be in breach of covenants with other lenders shortly and it has already initiated discussions with such lenders.

Strategy

On 24 July 2023, Inland announced the proposed acquisition of NorthCountry Homes Limited ("NorthCountry") as part of a strategy to develop a low cost homes business model, based in Wakefield, taking advantage of low Northern land values and developing the Inland brownfield and strategic land business in the South, as well as completing Inland's existing construction commitments. The proposed acquisition was subject to a number of conditions including the restoration to trading on AIM of Inland's shares. For the reasons set out below, restoration to trading is not likely to occur, and accordingly this strategy cannot be implemented.

Appointment of administrators

Inland has reviewed options to continue its policy of seeking to complete existing construction projects at the same time as undertaking a comprehensive programme of disposals of its land assets, most of which are held as inventory.

Taking into account the current circumstances and including the group structure and the current cash resources available to it Inland has concluded that the appointment of Administrators in accordance with the provisions of the Insolvency Act is in the best interests of all stakeholders.

Accordingly notices of intention to appoint David Hudson and Phil Armstrong of FRP Advisory Trading Ltd as Administrators have today been filed in respect of certain Inland group companies over which there are registered floating charges. It is intended that the formal appointment of Administrators in respect of Inland, those subsidiaries and the remaining Inland group companies will be made imminently.

Cancellation of admission

As set out above, the extent and cost of the work necessary to complete the preparation of the financial statements and the audit for FY22 and the timeframe within which this might be feasible is not known. In light of the circumstances set out above regarding the financial position of the Company, the Company considers that it may be difficult to complete the work necessary for the preparation of financial statements and the audit for FY22. Trading of the Company's shares on AIM was suspended on 3 April 2023 and pursuant to AIM Rule 41 admission of a company's shares to AIM will be cancelled where trading in its shares has been suspended for six months. Accordingly, Inland anticipates that admission of its shares to AIM will be cancelled on 4 October 2023.

Contacts:

Inland Homes plc Tel: [phone]
Matthew Robinson, Chair

Jolyon Harrison, CEO

FRP Tel: [phone]

David Hudson

Justin Matthews

[daneswooddynamo] 27/9/2023 13:44

These could be worthless

[cc2014] 01/9/2023 12:54

There are two ways to resolve the covenant breach

1. Pledge some more assets. Only imho they haven't got any which aren't used as security elsewhere. If they did the RNS would have said so.

2. Buy back ZDP's in the market at a huge discount. Only they haven't got any cash to do so.


On top of all this the auditors are requesting yet more provisions in the joint venture accounts which will feed through in part to INL accounts. That's more losses and more destruction to the stated NAV.

It doesn't look good for either INL or INLZ shareholders. Still good to know that only a year ago they had so much cash they were buying back shares.

[hindsight] 31/8/2023 18:15

I mostly sold out a while ago, since then land values have continued to fall significantly. Can not see a way the zeros get paid

[greedfear] 31/8/2023 13:03

Yes, it's all about getting paid (in the end).
In case of a roll over it should not longer be an arrangement in which no interest is being paid on a regular basis.
INL has become far more riskier then 10 years ago with them not being able to provide sufficient collaterol.

[stemis] 31/8/2023 12:36

The ZDP 'redeem' on 10.4.24 at 201.4p. Frankly even if they roll them over for 3 years to 10.4.27 at 7.5% a year to 250p, that's an attractive IRR from 100p of 35.7%. That's of course if they can ever eventually sort themselves out. It's not really about the rate of a rollover but whether they can survive and ultimately redeem them.

[I don't hold]

[my retirement fund] 31/8/2023 11:23

I wouldn't hold your breath, if its a bunch of faceless fund managers, and mixed retail investors then that's highly unlikely. These sorts of situations require an clued up business savvy activist of some description wielding a significant chunk of shares. I'm pretty certain if there was one, you would have heard about it by now.

If you want to see what can happen to a rag tag group of debt holders, including retail investors and faceless fund managers, look no further than what has been going on with the EROS bonds where they have been walked all over, have absolutely no control on anything and have not the faintest idea of what is going on and are unlikely to ever do so either.
-------------------
I expect a rollover but one where INLZ defines the terms and chances are those terms will be favorable for INLZ.

[greedfear] 31/8/2023 10:02

I'd like to know who exactly are holders of INLZ because if those are very different from INL holders INL could be in for a nasty surprise.
Factually INLZ is in control of INL's future.
I expect a rollover but one where INLZ defines the terms and chances are those terms will be favorable for INLZ.
I would not be surprised if it will be a partial payment in INL shares (improves equity of INL) and a partial roll over where (high) interest will be paid.
What's bad for INL isn't necessarily bad for INLZ.

[greedfear] 30/8/2023 20:52

Thanks! I stand corrected. "Inland has 90 days to remedy any shortfall (ie pledge additional assets as security or buy in ZDP shares to reduce the accrued Capital Entitlement"

[bsdjj] 30/8/2023 19:26

Not sure if it triggers immediate repayment but rather that the cover needs to be topped up to an amount equal to 120% of the value of outstanding zero debt. If that level cover indeed still exists...

[greedfear] 30/8/2023 18:05

I’m a “zero shareholder” and very curious about the next steps. If there is a breach then we become entitled for immediate repayment. Which would be something like 195p. Not concerned at all. Happy to add if things turn crazy.

[grahamg8] 30/8/2023 16:23

Agree Arthur that is what should happen. Ordinary and zero shareholders have been royally screwed so far and I rather suspect it will happen again.

[greedfear] 30/8/2023 14:56

I was hoping this news would lead to a sell off of INLZ. Well, maybe tomorrow.

[arthur_lame_stocks] 30/8/2023 09:23

My understanding though is that if there is a breach of the asset cover ratio then additional assets have to be pledged to bring the cover back into line.

Also, you've answered your own question re insiders. Basically the ZDPs are illiquid but some smart cookies have been buying significant amounts of the ords and they'll be totally wiped out before holders here take any sort of haircut.

[stemis] 30/8/2023 09:17

I'm sure you're right. The quoted spread at AJ Bell is 115-85 but there have been no trades today.

[cc2014] 30/8/2023 09:12

This was inevitable. If there had been any value here the insiders would have been scooping up the shares for some time.

I suspect there's no selling as the bid is false. I bet anyone trying to sell any will find the MM won't accept more than 1000 shares at 85p.

[stemis] 30/8/2023 08:57

Surprised the INLZ share price hasn't reacted...

[my retirement fund] 30/8/2023 08:56

The inevitable cascade of bad news has finally begun:

Inland ZDP PLC

30 August 2023

Inland ZDP PLC

Possible breach of loan covenant

30 August 2023

Inland Homes PLC is considering possible provisions to be made against certain asset values in its accounts with its auditors. The amounts of any such provisions, which have not yet been determined, appear likely to trigger a breach of the asset cover covenant applicable to the loan between Inland ZDP PLC and Inland Homes PLC.

A further announcement will be made as soon as the asset values (net of any relevant provisions) have been determined.

[my retirement fund] 21/7/2023 16:50

Yes expect the worse.

[grahamg8] 21/7/2023 16:40

If Cheshunt Lakes were worth what is claimed then it would seem simple to take bank finance and repay the Zeros on time and in full. But then the clowns running Inland seem to have made bad decisions for years, and appear to have been caught with their fingers in the till as well. We must wait for the investigation to complete and year end accounts to be published. The full horror story will out eventually.

[cc2014] 21/7/2023 07:58

I've looked at this over and over and I can't see as it looks good.

The share price has been stable at this low level for some time now. Every fund manager and his dog will have looked at it and have decided to leave it alone. That tells me something. Then, you can be sure if there was really amazing value down here the senior management and their families and friends would be picking up the shares.

INL clearly doesn't have any cash either as it would be picking up the shares cheap and the most recent RNS where INLZ are paying back the Paragon loan first reminds me that this issue is at the bottom of the pile in terms of security.


I can't see any other outcome that shareholders getting screwed over here and I agree it's worthwhile considering who will enforce the security because a disparate group of pref share holders is unlikely to be effective. I suspect you will find a number of the usual wealth managers like Premier Miton

[grahamg8] 21/7/2023 06:20

It could be crucial Cerrito. Cheshunt Lakes is moving forward but there is a long way to go. I’m trying to be optimistic but with no accounts from INL or details of the transaction under investigation investing is a gamble.

[cerrito] 20/7/2023 18:12

Thanks grahamg8 and I was being sloppy.
Basically I would be interested to know who are the owners of the preference shares. Who will INL be interfacing with when it comes to the renegotiation.
Is there a group of people with sufficient holdings of the preference shares to get a good deal?

[grahamg8] 20/7/2023 17:15

Inland ZDP plc are a wholly owned subsidiary of Inland Homes 2013 Ltd, see the half year report from 3/7/23, at the top and also page 30. 2013 are a wholly owned subsidiary of INL. See 2013 filing at Companies House p21, and also confirms the Zero shareholding on page 18.