Orchid Developments Share Discussion Threads

[knigel] 02/12/2012 20:13

I just thought you might have wished to asked several questions to their faces? What date is the EGM again because I am actually in London on the 14th.

[markt] 02/12/2012 19:53

Bump
BTW ....I am co-operating to a degree with a dedicated block of long term individual shareholders over at SWL (ref. msb brd)

they have banded together to support the long term bod and to oppose the addition of a specific person to the bod (from a large shareholder in the co)

a compromise of sorts was later reached....and a large shareholder put in their person as the new chairman.....but the opposition to the specific person joining the bod still stands.

so
small shareholders can join their votes and affect what happens at a co.

(in any bod squabbles it is of course always difficult as an outsider to know what the best solution is)

[knigel] 02/12/2012 19:38

I presume after all this hard work you will be attending the EGM?

[markt] 02/12/2012 19:22

My views on investing more money or not into OCH.

(in case anyone is interested, since I have been posting so much about OCH...and reading the paperwork etc)


1) At this moment I dont plan to put 1 more penny into OCH.
Largely because I do not trust the dirs. (an important point if you want to invest)
Also I think an organised scam is going on, to divert the assets of OCH into the hands of the 2 exec. dirs.
imo a high risk that OCH will not be re-admitted to AIM. Up to AIM, not OCH.
high risk that OCH would be suspended again, or go into administration or all or of division(s)
at 1kE/working day to each exec. dir. I think that the assets of OCH will continue to go to the dirs. from the shareholders
the dirs. may/will control the co. in practice...and I see that as especially negative

imo one should invest more in one's winners and cut one's losers
OCH keeps absorbing/taking more money from shareholders and returning none !
the GM is worth zero imo to shareholders
the offer doc. says that it expects Orchid Gdns to be taken by the banks

2) I repeat this point.
Largely because I do not trust the dirs.

3) I can understand that different people may have different views.
Someone that paid say 100p/share may want to take up the offer at 2.25p in order to bring down their average price/share. Perhaps partly as a 'punt'.
If they bt. 100k shares at 100p = 100k pnds then they could spend 2250 pnds to double their holding, ie. peanuts relative to their original 100p/share.

4) Some people may hope that the dirs. will be able to sell a lot of apartments and offices in Orchid Gdns and make a profit relative to 20ME debt on it...and that PIs may get some cash.
On other hand, they appear to have been able to sell almost no apartments/offices so far. And the share price of 2p would indicate that the mkt does not expect it to happen. There is no information in the offer document to say they have any sale contracts in place. They have had 18 months to make sales and nothing has happened.

5) OCH could of course pull a rabbit out of a hat.
But at present there is no information which infers that.
(the offer doc. even says that they cant pay their suppliers...and that it is assumed that for OCH to continue as going concern....it is assumed that OCH will CONTINUE NOT to pay their suppliers !!

6) THe offer doc. makes mention of payments to staff and managers.
It looks imo like preparing a thank you payment to staff....before closing up.

7) If there is ever any pay out to share holders....imo ..it looks like the dirs. are preparing so that they own as much as possible of OCH...and have 1st mortgages over OCH assets like land....to minimise what goes to shareholders and maximise what goes to them !
That does not encourage me to put in 1 more penny.

8) The offer process seems imo to use the money just to pay the dirs. (via cash or via shares)
I am not interested in putting in any money to do that !

9) the dirs. have woven a web of bonuses and conditions for themselves.....which are the most intricate and complicated that I have ever seen ....
that puts me off investing 1 more penny

10) Personally I think the voting will be NO...so I dont think the share issue will proceed. (I hope it wont, I hope that OCH will replace the bod, do bonus issue to shareholders of shares in the hotel and the land companies (no debts), and whether OCH survives or not is just in the hands of the banks)

11) OCH and its shares are now tarred/marked imo...and with these 2 dirs......it is possible imo that the mkt will not touch OCH shares unless there is an RNS that says " in 2 weeks we will send each shareholder x p for each share" or some other wonder RNS.

----

Everyone has to make their won decisions...and officially, perhaps seek advice from professional adviser.

Of course I dont know what will actually happen at OCH in the future.



NAG DYOR

[markt] 02/12/2012 18:54

Lazarus2010 24 Nov'12 - 08:50 - 8870 of 8906

a good post over the OCH 2012 thread
about the problems in the property mkt in Bulgaria...

(I agree with 95% of it...but I disagree with the end conclusion)

[markt] 02/12/2012 18:48

I have already sent my NO votes to for the EGM process.

For the share subscription wont be subscribing any money.

one reason is similar to grannyboy


"grannyboy 1 Dec'12 - 08:30 - 8895 of 8901 0 0

You've got to ask yourself "DO I THROW GOOD MONEY AFTER BAD","

and
- I dont trust the directors
- the dirs. look set to obtain up 73% of OCH...and it looks to me like giving up their salaries is perhaps all they will have ever 'paid' !! So, I think of 'trick'

- I bt around 50K shares at 5-6p, I later bt 110k shares at 2p hoping for a bounce (believign mkt was wrong !. I wont keep averaging down. I double up once, and once only. (if then doesnt bounce soon, I would look to sell all, since theory/decision was wrong)

- OCH has received tens of millions of pounds
and shareholders have received nothing in return, and a suspended company at 2M cap. value !! infers dirs. are no good for shareholders.
- dirs. will receive approx. 6ME to end of 2013, incl 12 months notice.
dirs. winning, shareholders losing. bad.

- the long term graph is down...and down
- I think the probability is high that OCH will de-list from AIM, to save money
so there will be no market for my OCH shares

- OCH has big payments to make in Nov 2012, Dec 2012, and 2013...and it has no money...so high % risk that banks will take the assets securing loans.
- high % risk that the mkt will shun OCH shares, due to risks of the debts, if so then share price would fall (DQE, MDC, MES shares are shunned due to 'smells bad'/'something wrong here' or 'dodgy accounts' effect, OCH has joined !)

- dirs. are busy putting the assets of the co. in their pockets imo ...and at 600kE/year....they could very easily end up with all of OCH

- the reasons for the money include 'for senoir managers'; this to me looks like preparation for winding up, a thank you/payoff to staff

- the CV of the new chairman looks that of a man to participate/advise in administration

- the dirs. keep leaving/changing !...British dirs. left, Tim Childs + 1 more. I dont like that.

- the accounts are false imo, or at least misleading. the value of the GM is NOT 137ME. (maybe 60-80ME imo, based on yield of 8% before tax)

- the claimed profit of 30ME in 2009 was a trick imo.

- the prop. mkt in Varna is bad, and especially bad imo in the winter, ice & snow we now enter the winter.

my list could goes on for ever !....I stop here !

[markt] 02/12/2012 18:48

20p bonus conditions.....and how that is affected by the proposed new shares to be taken by the directors

(I think that no one has looked at this subject.
So I will !
...the more I look....the more it all looks like it is an interwoven net....all planned in advance....and that whatever happens that the directors will win !)

---
20p Bonus Shares & COnditions. 12th Jan 2012


1) "If the Management Agreement is terminated by the Company prior to 31 December 2013 other than for material breach, the Company has agreed to pay to Bellport a cash sum on such termination equal to the difference between the mean volume weighted average price of an Ordinary Share for the six week period prior to termination, and 20p, multiplied by the number of Capitalisation Shares".

5.5M capitalisation shares issued at that time.

sp when suspended, approx. 2p.
difference to 20p is 18p
so, if remove the dirs. then the cash payment for just these shares is
5.5M X 18p = 0.99M pnds

(+ 12 months notice (0.6ME +....)..!!)

(any PIs out there feeling that you're gonna lose whatever happens !! he he )
(and OCH cant pay...then the dirs. will get the land or hotel assets instead....noting that after the EGM they will/could own a high% of OCH....so the remaining % in the hotel and land that they dont own would have lower value than now, so ...PIs would probably lose all of the remaining % to settle the debts to the dirs)

2) "10 per cent. of the Total Shareholder Returns over GBP0.20 per Ordinary Share up to and including GBP0.30 per Ordinary Share; and

(c) 25 per cent. of the Total Shareholder Returns over GBP0.30 per Ordinary Share. "

"In the event of a Capital Variation, the threshold levels of Total Shareholder Returns set out above may be adjusted "..."Bellport will be in the same economic position as it had been prior to the Capital Variation".

94M shares before the EGM, 250M after the EGM if the resolutions are voted through.
Does 20p then change to 7.5p ?
and 30p to 11p.

Those dreamers who harped on about 20p..R & T !...dont look so clever now imo !

(if they issue 250M new shares in Jan or Feb..at say 0.5p...what will be the bonus price then ? 3.75p instead of 20p ? he he
---

looks like a frigged 'game' as far as I'm concerned ! ..where the dirs. control everything and have their finger in every pie...so I dont want to play in this game !

[markt] 02/12/2012 18:47

Intriguing.....

OCH predecessor also ran out of cash !

"Infamous Academy 21 Jan'03 - 13:40 - 4891 of 4901

OCH is a dead duck unfortunately but that´s what happens when firms run out of cash".

--
Daddyboy 21 Jan'03 - 09:59 - 4888 of 4901 0 0

"cant wait for my £27 return from my original £2000 investment".
---
OCH 2003 version...raised 49M pnds..at 185p/share .to have a cap. value of 214M !!

sold around 2003 for 6p/share, making total of 8M.....

---
looks like PIs just keep losing !

[markt] 02/12/2012 18:45

I think I have come up with a new interesting theory for how the dirs. could (if this share offer were to happen) then buy the remaining part of OCH they wont own without it costing them anything

(because of the money they would receive from OCH due to the capitalisation shares, recall , at present if a takeover now at 2p/share then Bellport would be paid 20p-2p= 18p for each capitalisation share).

-----

post
markt 2 Dec'12 - 18:21 - 33 of 33

over on the "Markt posts" thread

[markt] 02/12/2012 18:21

This is important information imo...which people do not realise....

----
"(a) by the issue of 5,500,000 new Ordinary Shares at 20p per share (which represents a premium of 900 per cent. over the closing middle market price of an Ordinary Share on 11 January 2012 of 2p per Ordinary Share) ("Capitalisation Shares"); and

----

the Company shall pay to Bellport, in addition to the Replacement Bonus, an amount equal to the number of Capitalisation Shares multiplied by the difference between the Reference Price and the price or valuation of an Ordinary Share pursuant to the Change of Control Transaction. In the event of a Capital Variation, the Reference Price may be adjusted in such manner as an independent firm of accountants appointed by the Company for such purpose ......"


1) There are more capitalisation shares in the Dec 2012 EGM.
People have not yet associated the new proposed capitalisation shares with the existing Ts and Cs for capitalisation shares.

It is in fact, imo, all there is black and white. But the dirs. have been careful to try to hide it !...it is NOT mentioned in the papers for the Dec 2012 EGM !

imo ...it is ALL A TRICK, a CON....as I keep saying.
-----

How will it (the trick) work ?

I haven't fully decoded it yet or done any worked examples of numbers
but..

I think that there are 2 possibilities that come quickly to mind

OPTION 1) The dirs. buy the remaining part of OCH from shareholders at a time that suits them. They have 8% in capitalisation shares already. imo they shares are multiplied pro rata in the new share offer. There are new capitalisation shares to be issued, 32M if I recall. As part of the offer. AND there can be another 32M at least, to convert the 0.6M cash debt from 2009 bonus. So maybe 64M new capitalisation shares.....if we make the 8% into 10% to make calc. easier then we get 64M capitalisation shares + 25M = 89M

89M capitalisation shares

There can easily be more, dirs. will be able to issue new shares as they want and to who they want.

OK, if the dirs. then convert any other debt to them into a mortgage over the % they dont own in the hotel or/and land (see recent RNS !!)....then there may be a small part of OCH shares not in their hands.
lets assume 10%-20%.
If the dirs. then decide to de.list OCH....(since they have over 75%) they may also offer to buy shares in the mkt....from people that dont want to be in a co. that is de-listed (cant buy/sell shares) they can go to higher %....if get to 90% they can do forced acquisition of all shares.....

at the right time the dirs. could make an offer to buy all of OCH

lets assume there are 89M capitalisation shares. (36% of OCH if 250M shares)
And an offer of 2p/share.
At the previous condition price of 20p then the cash to be paid to the dirs. would be (20-2) X 89M = 18p X 89M = 16M pnds
But we know this is wrong.
If it was 7p (94/250 X 20p) then
7-2 X 89M = 4.45M

But after the new shares, the 20p price would be different, but what would it be ?
Anyone able to calculate it ?
Is 7p correct, I have no idea !, how to calculate the new price instead of 20p is not obvious to me.

Anway, if the directors make an offer to buy all of OCH for 5M pounds....2p/share.
lets assume they own 64%
then its costs them 1.8M to buy the 36M shares they dont own

WARNING !
they may get that 1.8M JUST from the capitalisation shares, that OCH would have to pay to BELLPORT !! (ie. them !)

so.....the acquisition may not cost them anything !!

[markt] 02/12/2012 18:17

the_beagle 16 Feb'12 - 09:25 - 3171 of 8905 0 0

cut

On a more cautious level I own 2 small properties in Bulgaria and they appear to be unsaleable at anything like perceived market level.

[markt] 02/12/2012 18:12

7bore 16 Feb'12 - 10:39 - 3187 of 8905

good post imo if anyone is interested in the actual selling price of a Mall in Bulgaria

(by comparing with the OCH GM....you get a valuation way way below the 137ME given in the offer document)

(7bore estimated at 30-40ME, comparing Varna with Sofia, and m2 and rental prices hence a very rough estimation

on yield alone I estimated closer to 70-80ME....BUT for yield pricing, you need "real info", and so far that has not been provided to the mkt for the GM....including each and EVERY cost for the GM)

either way, the key pt. is that any valuing method seems to give a value that is way way below the 137ME that the 2 OCH exec. dirs. use.....another reason that I do not trust the exec. dirs not the bod)

[markt] 02/12/2012 18:02

"Thaaarg 16 Feb'12 - 10:26 - 3184 of 8905 0 0

The clause insulates the value of the Bonus Bellport (the Directors company) accepted from a bid below 20p.

A bid they would have to accept and approve as Directors and major shareholders....

Belt and Braces I suppose but it doesn't show a huge amount of confidence from the Directors in achieving a takeover at 20p+....

However....

These two Directors, via Bellport, own 29.97% of OCH, and a such it is in their own interests to secure as high a price as possible for their shares."

-----

In hindsight...an interesting post....
since if read carefully and combined with recent news....
it pre-warns that the directors were setting up a win-win situation for themselves

if a takeover happens at a high price then their shareholding of 30% receives lots of money

If a takeover happens at a low price, say 1p after the new share offer...then their bonus shares will get paid at 20p-1p= 19p

These 2 dirs. are sharp, very sharp. Far too sharp for the shareholders !
Or for the AIM regulators imo !..who imo should stop the offer process for being a misrepresentation of the truth....

----

PS
will future capitalisation shares also be subject to this 20p rule ?
will the existing bonus shares be multiplied up in number in the new share offer ?..I assume so, it says something to this effect in the bonus conditions, or the 20p price will be changed. (ah, I posted that the 20p price would reduce to 7p....but...I perhaps got it wrong....perhaps it goes up not down !, maybe a roomful or accountants would be needed to work it out !)

the numerous different bonuses and conditions for the directors....seems impossible to understand..(intentionally made to be impossible to understand ?, imo, YES !, the dirs. dont want anyone to understand it !)..and I am, I think, one of the PIs with a reasonable grasp of the paperwork

[markt] 02/12/2012 17:50

markt 16 Feb'12 - 14:47 - 3211 of 8905 0 0 edit

....a boyout led by the board

"sapper2476 - 16 Feb'12 - 14:36 - 3207 of 3208

cut

"they will also have to secure funding for any buyout which may prove difficult"

They wouldn't need much funding at all imo.
If buy for say 6M...and manage to team up with shareholders of 21%...to get 51%..then only need to buy 25% in order to de-list...or 90% to do compulsory share purchase. To buy 25% at 6M cap. value is only 1.5M pnds. Peanuts.
If dirs. make an offer to buy 70% of the company @ 6M cap. value then cash needed = 4.5M approx. Not such a big deal...small relative to the OCH loans, perhaps one of the banks would be interested (noting they already have big OCH loans anyway, 4.5M would be small % of total)...."


----

he he

Looks like I partly foresaw the dirs. interest in the getting their hands on a bigger % of OCH.....fairly obvious their interest due to increasing holding up to 30%....

(If people had voted with me in the Feb. EGM, ie, NO.....the dirs. would still have 22% and it would be easier to block them at this EGM.....
at every EGM the dirs. gain more power.....this EGM is in fact the break and break imo....if the dirs. gain over 40% they will have practical control...and then in OCH is a dead duck as far as normal shareholders are concerned.....

because

imho the dirs. will then just use their salaries etc....to steadily convert to % of OCH and ownership of OCH assets via loans, eg. see recent mortgage put on land for dir. loan.

imo shareholders are being 'done' and while it is happening....many are giving a round of applause to the thieves ! (while some other have twigged and are not happy)

[markt] 02/12/2012 17:43

markt 16 Feb'12 - 14:37 - 3208 of 8905 0 0 edit

Thaaarg
"The GM Varna was valued at 137m Euro and I would expect it to fetch that price + / - 2.5% as it was valued only last summer specifically for the purposes of Bellport's bonus award.

It goes without saying therefore, as Bellport (The Directors) were the direct and only beneficiaries of the valuation (bonus), that the said valuation, in the interest of ALL OCH shareholders, was conservative".

Everyone has their own opinion.
imho ....your post, complete rubbish !

I think that no one on this board believes the NAV stated in the accounts, is it around .74 Euros/shares....except perhaps yourself.

(BTW, the Mall was valued using DCF, while if you look at the Europa news (and most property companies) they declare purchase price wrt yield. Yield and DCF give 2 completely different valuations for the Mall imho....and of course the Mall sale price will only be what someone will pay....you can repeat 137M as much as you want but if the buyer says "no thanks, I'm willing to pay X" you either say OK, or no.)

... the assett value of the Mall also includes the commission paid to Colliers (see the accounts).....ie. the calculation means nothing or little imho....unless of course you are a director and want to use the calculation to obtain a high number in order to pay yourself a 2M euros bonus ! (I'm such a skeptic !...but normally with reason/facts)...(at least in the end most of that has been taken as shares at 20p, + 1/2M loan note.....while so far shareholders has lost money, a lot...so, so far the bonus is still of argueable morality in my view)


I can make the DCF calculation produce any number you want....100M, 110M, 120M, 130M, 140M, 150M, 160M. You pay my time and I'll tell you what discount rates etc produce the result you want.
DCF calcs., wellknown for 'rubbish in, rubbish out'. Just a calculation, useful but does not define what a buyer will pay.

[markt] 02/12/2012 17:41

"ihavenoclue 16 Feb'12 - 14:34 - 3206 of 8905 0 0

I feel that it will be a buy out lead by the board as Bellport now owns close to 30%"

----

How right was ihnc !!

but probably little did he or anyone (incl me) realise that most of OCH could be owned by Bellport JUST in return for their salaries !

(that will happen if the EGM votes yes)

(as recently, I have added some info.....that the dirs. will be able to buy or obtain the last % of OCH that they will/would not own ...for a small cost (such as the part of the 2009 not yet paid), I have roughly explained how that would work in other posts)

dear shareholders, I am sure that you/we are being shafted by the dirs.
..and explained how in my numerous posts/rants during Nov 2012.

[markt] 02/12/2012 17:37

Thaaarg 16 Feb'12 - 12:52 - 3205 of 8905

"Thing is, sell GM Varna for book price and ALL of OCH's debt is gone in one fell
swoop.

OCH is then just left with its remaining property assets and NO DEBT.

There is plenty of value to be realised here".

----

It is now Dec 2012.

OCH shares are suspended. Cap. value around 2M
94M shares, will be 250M after the issue if voted through.

Clearly Thaargs idea/hope that the GM would be sold....and that "There is plenty of value to be realised here"...was too optimistic and too hopeful !.

(imo in part since the claimed value of the Mall at 137ME appears to be unrealistic....otherwise imo it would have been sold by now to save OCH .....and no one has been interested in buying the Mall at any price close to 137ME (which would give, imo, a terribly low yield)

(if people do not understand "yield" or "return on cash" or "divi yield"....then they should not be investing imo)

[markt] 02/12/2012 17:32

Thaaarg 16 Feb'12 - 12:52 - 3205 of 8905

cut

"The GM Varna was valued at 137m Euro and I would expect it to fetch that price + / - 2.5% as it was valued only last summer specifically for the purposes of Bellport's bonus award.

It goes without saying therefore, as Bellport (The Directors) were the direct and only beneficiaries of the valuation (bonus), that the said valuation, in the interest of ALL OCH shareholders, was conservative."

----

he he

I said in Feb 2012 that people who believed the 137ME number were ....nuts.

and that the value for any sale would be based on yield. and a yield around 8% PBT gives a value around 70ME

I still stick with that general argument....and imo it is right.
Thaarg, R & T you willing to admit now that you were a dreamer ?

(PS
the banks will imo not take the GM back at present....since OCH currently manages it for them for free or a low cost...and they get their interest paid....and they still own it....so for the banks it is fine !

for Bulgaria the GM has been a success in occupancy (but not imo in making any money for shareholders !)...so banks are probably happy to let management continue...and the OCH dirs. get 1KE /working day each...so they are quite happy as well !!

sadly shareholders are quietly getting shafted...but most (all !) are too stupid to realise !...even though 1 poster keeps informing them ! ;-)

[markt] 02/12/2012 17:25

7bore 16 Feb'12 - 12:50 - 3204 of 8905


Evil Knievel
29 Jan 12

' ' I mentioned on Friday that I had had a nibble at Orchid Developments (OCH). However, over the weekend, I looked more closely into the balance sheet. It definitely comes out at 65p per share tangible net asset value. That noted, a successful bid is surely unlikely to be less than, say, 25p. This would be despite the unhappy recent corporate history. cut


---

Evil Knievel
01 Feb 12
"Possibly mistakenly I took my profits on Orchid Developments (OCH), selling 500,000 at an average of 14p. However, I reflect upon the fact that some putative bids firm up quick and fast whilst others tend to fade away. Some will say that I have given the bidder's due diligence team far too little time. But but but....."


----

Result ?
EK made money, PIs and followers of EK LOST money
and the data/text in EK looks like....intentional lies...in order for him to...'pump and dump and make money !

[markt] 02/12/2012 17:17

"markt 16 Feb'12 - 17:01 - 3235 of 8905 0 0 edit

"Thaaarg - 16 Feb'12 - 12:52 - 3205 of 3233


OK.

Any cash only deal for the GM Varna will not be for 30 - 40m Euro as this is 1/3rd of its value.

cut

The GM Varna was valued at 137m Euro and I would expect it to fetch that price + / - 2.5% as it was valued only last summer specifically for the purposes of Bellport's bonus award.

It goes without saying therefore, as Bellport (The Directors) were the direct and only beneficiaries of the valuation (bonus), that the said valuation, in the interest of ALL OCH shareholders, was conservative".

eh....completely wrong imho.
"137M +/- 2.5%". 2.5% !! Cloud cuckoo land imo.

You have not read the accounts ! Nor do you seem to understand the debt structure at OCH.

(shall I give you a clue ?......the Mall was not in fact "valued" as you seem to think. A DCF calculation was done. It is/was a calculation, not a valuation by a chartered surveyor taking into account recent transactions for other Malls).

If nett income is 5M (after costs, see accounts) then yield is only 3.6%.
No one would buy it at such a low yield (high price) imho. Property companies look for 7-12% imho, see RNS for property companies. "