Orchid Developments Share Discussion Threads

[daytraders] 27/11/2012 13:28

lol, why would you want to take up rights ? when people was not buying at 20% less when shares were dealing, 100% dilution, imo every man and his dog will be selling if we open at 2.25p, where is the incetive to take up the rights issue anyway, usually you get a 20% discount not pay 20% more, imo dyor.

[joeblogg2] 27/11/2012 12:48

I don't have the cash to take up my rights. Can we not have a resolution that the salaries be paid in part cash and shares and also they need to revise the amount paid as the company needs to have a firmer footing?

[thaaarg] 27/11/2012 12:41

R&T, I trust you will be taking up your allocation?

[b3thany] 27/11/2012 11:40

LuckyNickyBoy,

The loan situation may be true with Golden Yavor (GY) hotel BUT I'm sure it cost Och more to build it than the current market worth. Anyway, GY is not material in the scheme of things, the current market valuation of GM is.........and could be the lifeline for shareholders and Och.

[thaaarg] 27/11/2012 10:33

Normally an Open Offer or Rights Issue is underwritten, ie, an II (or IIs) would be prepared to take and pay for any shares not taken up by existing shareholders thus guaranteeing the the necessary funds are raised.

The OCH Open Offer is not underwritten in this way.

The BoD are effectively underwriting it because they had no choice.

I'm afraid II's are simply not interested.

[luckynickyboy] 27/11/2012 10:31

B3thany, not true re negative equity on other assets - neither the Golden Yavor hotel nor the undeveloped Land Bank have any loans on them

[b3thany] 27/11/2012 09:30

The key to a possible return to shareholders is the current market valuation of the GM - the other assets almost 100% in negative equity. If the GM has a positive current market valuation a slim chance of a positive return after costs and expenses have been considered.

The actions and opinions of the institution holders are crucial to the success and failure of this Open Offer and possible survival of Och including Value Investment who had been selling down its holding many months prior to current scenario.

[bumpkinroll] 27/11/2012 09:03

R&T - based on markt's prolific, detailed views, I believe him when he states he has emailed a few of the II's.

Surprised sapper has not emerged here with any views as he states he holds a big holding here.....

Time is running out here - markt please advise any response from the II's. If not I will email a few myself.

[luckynickyboy] 27/11/2012 07:25

I would also be interested to know what was proposed when the original company came back after suspension and made a 2nd offer (this time for merger). That part of the RNS was glazed over saying it would not leave the shareholders with enough of a stake in the new company - maybe the shareholders could have had some say in that though..?
GLA, LNB

[roughandtumbleone] 27/11/2012 06:06

KNIGEL - 26 Nov 2012 - 23:56 - 106 of 106Do you agree that the capital raising is a drop in the ocean to the pending debt repayments due:------I do agree with that statement albeit the GM does also generate an annual income of 8m and orchid Gardens will commence an income stream with Carrefour being the anchor tenant.I would like to see the BODs actually be more visible in regard to the physical sale of assets, such as The hotel on Jones Langs auction site. It would be interesting to understand what price the hotel was recently being sold at, so as to at least be a bench mark. The Business Centre is probably worth 4m and why not get shot of the two cinemas?The "campaign" is one of the bb headers, last post 17th January.

[knigel] 26/11/2012 23:56

Do you agree that the capital raising is a drop in the ocean to the pending debt repayments due:

[knigel] 26/11/2012 23:54

Fair points - I've been quite open that I have not yet emailed IIs but do have time off later this week. I'm still in two minds about subscribing to the open offer - TBH I did not realised there was a "campaign" back in February.

[knigel] 26/11/2012 23:10

The reason? We don't have much time to stop these directors taking a majority stake - on the cheap. (so don't worry about the posts - it unlikely to be a long term thread)

[knigel] 26/11/2012 23:09

LuckyNickyBoy, I understand your point as some of MarkTs' postings have been long and detailed. However if we are close to the 5% shareholder mark were the company might have to listen to our concerns then the only way to ensure we get there is to keep pushing, posting, questioning and asking other shareholders to consider joining in

[luckynickyboy] 26/11/2012 23:01

Markt, give a rest now will you? Jeez...

[markt] 26/11/2012 20:54

Knigel
2 of my main suggestions are
- remove the bod and install II recommended dirs.
- pay out a bonus issue of the assets in the hotel and the land.
(then decide later what to do with them.....but held by shareholders....no link to OCH PLC at all)


THen let OCH Plc sink or swim on its own. Personally I think it will sink, depends partly if banks allow debts to be delayed AND imo if they allow debts to INCREASE !!, to pay dirs wages and staff costs etc etc and etc !.

recently OCH sold 1.8ME of apartments....and the debt STILL went up !!!!!!!!

[markt] 26/11/2012 20:51

Knigel
"Perhaps your point the other day of delisting (I think this is what u suggested) and waiting 5 years for the property market to recover might be the best solution afterall"

be interesting to see what the AIM mkt view is of OCH if it were to come back to market, or if the directors 'request' that AIM allows it to come back to market !

due to big doubts about its financial stability and ability to pay
- dirs. wages
- staff wages
- debt re-repayments (stacked up for future months..)

I'm not sure if AIM will allow it to re-list.

The general idea of public stk mkts is that the regulators are fairly sure that the company in question is not about to keel over.....and imho OCH could do that at any moment, it just needs a bank to say that it will not delay yet again a stage payment....and siezes that assett
so OCH may not be allowed back, even after the share issue....may ask OCH to show that it can make the payments lined up for Dec....and maybe first payments in 2013....


And noting that OCH is already involved in legal cases due to money, not good from a regulators view point. (Varna Hills aparts. were seized by ct. order I recall ...since OCH did not pay court order to a builder I think...)

[markt] 26/11/2012 20:09

BTW


I try to look back and see how much the dirs. have actually paid in cash for OCH shares.


----
Initial OCH admission document.

16M of assets
11M of liabilities

Nett asset of approx. 5M. Stated shareholder assets of 5.5M

But raised 18M (21M shares at 95p) to have a cap. value of 60.2M pnds.
Infers shareholder assets of 60M- 18M = 42M.

So....based just on those numbers the value of real nett assets of 5.5M was 42M !!

ie. that the people that had created the company and created the assets of 5.5M were valuing that 5.5M at 42M as part of the total of OCH after the IPO.

Infers imo that subscribing shareholders were
- very stupid ! (in property sector it is not often you can get someone to pay 42M for 5.5M of assets !!, except for AIM IPOs of course !)
- or believed page 21 which stated a value of 46M of property/assets (Shore Capital !!)

(on page 21 it talks of aluation of property of 46M....cant understand that....it may that that is the expected future value after construction)

Amount of money raised via shares before the IPO = 6.2ME. Retained earnings of .9ME loss.
So, there is no logical explanation AT ALL that I can see for the IPO pricing 5.5-6ME of assets and cash ever raised at 42M pounds !!
Except that IPO clients have taken the claimed valuation of 46M on P21 as being true and not realising that a large part of it was assuming that future projects were successful and sold at certain calculated prices. So, seems imo to be a history of OCH and dubious or misleading documents and doubtful valuations, based on calculations....and kept relatively quiet imo that valuations are based on assumptions and calculations and are not real 'values'. (ref. the GM valuation)

Approx. 6ME raised by share issues prior to the IPO. And approx. 40M shares pre-IPO (so approx. 15p/share and dirs. had approx. 23M shares after the IPO (and didnt subscribe for any new shares). So, the dirs. shares pre-IPO corresponded to 3.4ME of nett assets, of total nett assetts of around 6ME. Multiplied by about 6 by the IPO !, since people way over paid imo as they dreamed of OCH covering Bulgaria in apartments and offices !.
Dirs. must be a bit miffed they never sold all their shares above 50p !


(BTW, Golden Yavor value has reduced from 12.5M POUNDS in 2005 to 7ME (or maybe 6M pnds) in 2012 !! HALVED in claimed value) (was 12.5M pounds, true/honest ?! Do all the valuations in OCH accounts need to be halved !

[knigel] 26/11/2012 19:50

I appreciate all your posts - but not really sure what the answer(s) is. Perhaps your point the other day of delisting (I think this is what u suggested) and waiting 5 years for the property market to recover might be the best solution afterall
If the resolutions are defeated (presuming no alternatives/amendments are allowed) it seems like the directors are laughing also!

[markt] 26/11/2012 19:26

I copy/repeat what Lazarus wrote about
practical completion of the Orchid Gdns project/building.

(thanks very useful)


"If the construction continues to 'pc' it means that under BG law there will be an official handover from the contractor to the developer and milestone payments will become due, therefore by delaying the completion of the development they are avoiding reching this stage and triggering such payments. Also 'retention payments' will become due, typically between 2.5 and 5% of contract value."

I had assumed that the project was intentionally not being completed...because it suited OCH....
I had assumed in order to avoid having to start paying any taxes to the city council (an unfinished or unoccupiable building or house normally does not have to pay imo)

but as Lazarus says....there can be expected to also be some payments to builders (and maybe architects/officials as well)....

ah, maybe there is also VAT to pay ? (or maybe only the apartment buyer would pay that)
and maybe the occupancy license also costs money to obtain
it could also be mentioned in the loan conditions, could be another reason not to completely finish.


----

imho it shows the bad state of OCH for money and for selling apartments and offices.
OCH has managed to get Carrefour to sent some space for supermarket.....but rented, not sold....so it gives OCH a problem since has to repay debt ...with real cash...and rental money wont give enough, maybe just 7% of the value or cost/debt.

Imho if OCH had buyers for apartments/offices then they would take a deposit, finish the building and complete the sales, pay off the bank debt and pocket the profit or loss !!. But they have not done it. Infers imho that they can not sell the apartments/offices. Perhaps they delayed for 1-2 years hoping for mkt to improve and imo it hasnt.

[markt] 26/11/2012 19:14

Hi
Sorry for so many posts etc. But it seems like I am able to produce some valid insights imo....so I am tapping away at the keyboard !

(my opinions are of course only mine, everyone has to make up their own mind)

KNigel
I try to reply to your questions.

1) still at 3.7%, yes.
(can you ask the 1% person at LSE msg board/site to join us ?)


2) a message has gone to some of the IIs. Hopefully on Tuesday/Weds. it will be apparent if any replies or interest from IIs.

3) FSA. No reply. There is a reply from 1 part of the regulatory system.....
(FSA dont have a history imo of being fast, taking action....so I dont hold out much hope, but you never know, of course they say that they never report what they do or dont do)

4) An open offer pro rata and directors limited to 30%.
At present it CAN NOT happen.

The resolutions are imho blackmail/extorsion. They are linked. The directors REFUSE to allow the share issue to happy unless they can receive shares instead of cash for their salaries for 2012 and 2013, approx. 1.2ME. Approx. 30% of OCH.

This would give them control of the company....and a massive % of OCH..and of the Mall and of Varna Hills and Orchid Gdns and ......which g'tees them many benefits...such as high % of the hotel and the land if that is distributed to shareholders (they have protected it from the banks so far...)

looks to me like a win win deal for the dirs. and a lose lose deal for the shareholders.

For the dirs. if the GM and Orchid Gdns get taken by the banks...they will still own maybe 80% of the hotel and of the land....and still be on 600KE/year !!
And if OCH does not pay their salary ...then imo they can take the remaining 20% of the hotel and the land. Would leave shareholders with...0 !

5) "How can a company get away with an open offer document stating the shares will be relisted if they can be suspended again shortly afterwards?"

imho ...because the offer doc. clearly states that the main risks and assumptions....and that the "on going viable concern" opinion is given based on those assumptions....

AIM regulators are normally not going to analyse what companies or auditors say
, if a company says it is a going concern with the following assumptions then it is unlikely I think that AIM would argue, unless some II or big prof. shareholders complained to AIM that it was not true and why it was not true.

(although the assumption that OCH will sell more than 15ME-20ME of apartments/offices in 2013 to repay the stage payments....when they have sold almost none so far over 18 months..and only sold 1.8ME over all of OCH in last 6 month period..seems a dubious assumption to claim/use...)

with AIM cos with cap. value of 2M....I doubt that AIM is going to be willing to be too bothered/interested !

that the banks will agree to move the re-payment dates from 2013 to some later date (as already done)
but the 50% repay or refinance deal for the GM is a biggie imo, 45ME....and they may not accept to dealy it, they may say that the GM is now a finished working project, either it works or it does not, if it does work, then you can easily get new banks to take on 50% of the loans.

(note the loans are clearly development loans, just to get the projects done and then sold, not intended as interest only loans over 20-30 years. The loans require capital to be re-paid, to do that for Orchid Gdns OCH must sell stuff and make profits from those sales)

(Personally I am stunned that OCH went ahead with the Orchid Gdns project, AFTER the global crisis started in 2008, but if the project was financed and ring fenced the dirs. maybe thought that if went badly then the banks take the project and no other loss to OCH, but in fact...the seaside apartments have now been allocated as extra loan security !!)

For Orchid Gdns....OCH has already said....'you can take the building now if you want'....and the bank has agreed to change the payment dates and give OCH more time.....but the banks will not accept empty apartments/offices for every, since the debt would just increase and increase....one day OCH must return the loans + interest or the banks will take the building...

----

Another working day over. Another 1000 Euros to each of the exec. dirs.
Perhaps tax free if paid to Cayman Islands company.
Will OCH drag everything out as long as possible due to the 1000 Euros/working day situation ?! (would you say no to 1000 Euros/working day and wind things up as quickly as possible or drag things out ?...noting that the salary is being converted rapidly into % of OCH...which does have some real assets with no debt.....)

[lazarus2010] 26/11/2012 19:05

ps, I think if you suspect the worst and consider what sort of strategy they might be playing in order to seize all or as much of the assets as they possibly can, and find ways to prevent such a strategy then it's your only possible way out.

Also consider if any of the properties are set up inside SPV's and therefore if they are allowed to be returned to the banks will it remove debt from the balance sheet or will the banks have the right to come after the main company for the remaining debt. The structuring of the investments within the company is very important to its survival.