Raven Prop P Discussion Threads

[kenny] 09/1/2020 11:40

Using this link:
you can download and read Colliers 2019/Q3/Russia/Moscow/Industrial report.

Two points to note from that are a) a small rise in rents during 2019 and b) the vacancy rate is predicted to fall to 3.5% as at the end of 2019.

In another report (Knight Frank), I have read that rental rates are now in an upward trend but the prediction for 2020 is for a very modest rise in rents - from an average of RUB3,850 to 4,000. Still a long way below their peak of seven years ago.

Personally, I think it will be the sharp reduction in vacancies that will help the company most in 2019. Rental increases take time to work their way in through lease renewals.

[igbertsponk] 09/1/2020 10:13

Sorry - that buying pressure inching the price up is me!

[kenny] 02/1/2020 10:35

"Russia in 2020: Will the Economy Grow Faster?"


Some predictions for the Russian economy plus a good description of how Russia overcame sanctions since 2014. Russia now has, probably, the highest government reserves, as a percentage of GDP, in the World.

Worth a read just for the history since 2014.

[igbertsponk] 02/1/2020 09:13

The recent rise in the Ords shows how the company is doing well despite the Woodford fallout.
Suspect I'll be continuing to add rather a lot of these this year. Hope all have a great 2020!

Edited to say as the divi in my account already (Charles Stanley are efficient) I've reinvested a few pennies.

[eeza] 30/12/2019 23:08

Div payment tomorrow. May see some reinvestment.

[kenny] 13/12/2019 11:46

The Bank of Russia cuts the key rate by 25 bp to 6.25% p.a.

[topvest] 12/12/2019 19:55

I'm fast coming to the conclusion that Invesco are nearly as stupid as Woodford!

[topvest] 12/12/2019 19:54

Well done Raven - really taken Woodford and Invesco to the cleaners. An opportunistic move exposing fully the holes in their investment strategies. The sale of these holdings at such a crazy price is great news for existing holders and shambolic on the other side of the fence!

[kenny] 12/12/2019 16:17

Mark Barnett takes £28m hit on cut-price Raven sales
By Daniel Grote 12 Dec, 2019

Under-pressure fund manager Mark Barnett is set to take a £28 million hit on his stake in Raven, after agreeing to offload the Russian warehouse developer's preference shares in a cut-price deal.

Barnett, who was yesterday sacked as manager of the Edinburgh (EDIN) investment trust, has struck a deal to sell all his Raven preference and convertible preference shares back to the company for £87 million.

That represents an £11.5 million, or 13%, discount to the £98.5 million they are worth according to their market price.

It follows the Invesco Income and High Income manager's agreement last week to sell all his ordinary shares back to Raven for £50.3 million at 36p per share. That's around £16.3 million, or 32.5%, less than the £66.6 million at which the stake is valued at today's 47.7p share price.

Taken together, the two sales, which are yet to complete, are being conducted at a £27.8 million discount to the price of the shares in the market.

The bulk of Barnett's stake in Raven's preference shares is held in his £8.8 billion Invesco Income and High Income funds, with the Edinburgh investment trust he will hand over early next year set to receive £3.3 million from the deal.

Barnett has faced heavy withdrawals from the funds as his performance has deteriorated and has been selling down positions in a number of hard-to-trade small companies, including many he held alongside Neil Woodford, his predecessor as manager.

Investment research group Morningstar last month downgraded its rating on the Invesco Income and High Income funds, warning their heavy weighting to small companies could prove problematic in funding withdrawals from investors,
Barnett has however insisted that the liquidity of the portfolios is strong and dismissed comparisons with Woodford, whose Woodford Equity Income fund featured heavy weighting to unquoted companies and hard-to-trade small stocks and was suspended in June.

The latest deals will take to £147 million the amount Barnett has raised from the sale of shares back to Raven since July.

Over that period, the Russian warehouse developer has spent a combined £173 million buying back shares from both Barnett, its largest investor, and Woodford, who sold back his stake following the suspension of his flagship fund.

A further £93 million deal to place Woodford's preference shares with institutional investors was struck in July. That sale was priced at a similar discount to Barnett's proposed disposal of his preference shares.

Raven directors Anton Bilton and Glyn Hirsch have emerged as among the biggest buyers of assets from Woodford Equity Income.

The pair are also directors of Ibiza property developers Sabina Estates, which bought back Woodford's stake in the company for €50 million (£43 million) around half the £85 million at which it was valued by Woodford Equity Income.

[simon gordon] 12/12/2019 13:44

Investment Week - 3/12/19:

Raven Property targets 28.5% share capital repurchase from Invesco AM

Raven Property is set to repurchase 28.5% of its share capital from Invesco Asset Management at a 46% discount to its 67p NAV, subject to shareholder approval.

The Russian property investment firm, which had been a holding of Woodford Investment Management funds, prior to its collapse, has entered into a conditional agreement to an off-market purchase in cash of 139.6m ordinary shares from Invesco at 36p each.

Raven Property shares represented 1.8% of Woodford's Income Focus fund as at 31 July and 0.6% of Equity Income as at 30 June, but was not held in the Patient Capital Trust, according to the firm's annual report.

Woodford was reportedly forced to take a £15m hit on the sale of two lots of preference shares in Raven Property, after selling at a discount to the market selling price.

Raven Property bought back the equivalent of 14.8% of its market cap from both Woodford and Invesco in August, according to Numis Securities Research. The firm then bought back an additional 2% from Invesco in October.

It follows Invesco's decision to shift to a 'co-head' model with Mark Barnett joined as head of UK equities at Invesco by Martin Walker on 1 January 2020, amid continued poor performance from Barnett's funds and investment trusts.

Ordinary shares in Raven Property represented 0.6% of Barnett's Invesco High Income as at 30 June, with 0.5% in preference shares.

Meanwhile, Invesco Income allocates at total of 1.6% of its portfolio to a combination of ordinary shares and preference shares.

Raven Property's board said the latest repurchase, which is scheduled to be completed in January, said there would be an uplift from transaction as a result of repurchasing shares at a discount, with November's pro-forma NAV boosted to 89p, a 32.8% increase from 30 June.

Commenting on the move, Numis said that while it is "not in favour of repurchases that target specific shareholders, rather than offering all shareholders an exit on the same terms", it can see the "benefits of removing the overhang of a substantial shareholder seeking an exit".

It added: "Shareholders will benefit from substantial accretion to NAV due to acquiring shares at a substantial discount.

"We estimate the proposed buyback will add c.15p, c.20% to the NAV (after prior uplifts).

"Further details will be announced about financing the repurchase, although we note that the company has flexibility on the balance sheet (sub 50% LTV) which should allow the company to secure funding for the transaction against its high quality, high yielding asset base (£1.3bn value at 30 June)."

Invesco declined to comment.

[holts] 11/12/2019 22:36

Strange to think if Comrade Corbyn gets in we should be safer here than in UK based investments .

[yieldsearch] 11/12/2019 18:03

why would a billionnaire subscribe to a new class of lower yield debt? would make sense to just take over the existing invesco positions.
would guess more likely an asset sale to finance the purchase. not really clear, we all have to wait for more info from the company

[kenny] 11/12/2019 16:48

Financing could also come from selling a property. Buying in the RAVC at 92.5p and cancelling them removes a pile of future liabilities in terms of redemption at 135p and the saving of interest payments between now and 2026.

Alternatively, instead of selling a property, gearing up the portfolio to implement the above gives a serious return. Not worked out the "yield" but if borrowing at 7% the effective return would be material.

Future liabilities are also reduced materially making the remaining share issues even more secure.

The announced buy-ins from Invesco cost as follows:

Ordinaries £48m
RAVP £38m
RAVC £58.7m

Total £144.7m

It's a big figure but against the size of the property portfolio it might be doable.

It's speculation but the alternative is that the "related parties" are a Russian billionaire who is offered/subscribes for a new class of lower yielding preference.

The bottom line is the company would not have announced the buy-in's today and on 2 December without having a plan.

[igbertsponk] 11/12/2019 16:13

Certainly has an effect on the real NAV. I couldn't really give a monkeys about any other measure of NAV.

[gfrae] 11/12/2019 16:08

I dont think that is true in the case of convertibles or prefs ,though I am not certain.
It affects gearing,making this a much riskier investment (or rewarding)

[eeza] 11/12/2019 15:29

Should be good news for the prefs. Overhang removed.

[kenny] 11/12/2019 15:26

Financing could come from the 'related parties' who bought a few of RAVP and ordinaries in the initial Woodford selloff. This is pure speculation. Is it strange that the company has still not disclosed who these related parties are?

[igbertsponk] 11/12/2019 15:26

If you buy in debt at less than book value it affects NAV.

[gfrae] 11/12/2019 14:58

Dont think it affects NAV. Intrigued to know how much new debt will cost and if they can finance cheaper than they currently are.

[igbertsponk] 11/12/2019 09:38

All prices still unchanged.
Guess it adds to the Ords NAV per share, but will increase risk due to higher gearing.

[my retirement fund] 11/12/2019 08:45

Where the hell is all this cash coming from to keep doing this is what im asking

[owenski] 11/12/2019 08:38

Shame I cant buy a few more for 115

[eeza] 11/12/2019 08:33

Even better if they cancel them.

[otemple3] 11/12/2019 08:32

Personally see this as good news as this stake was likely to be coming to market so they have removed the uncertainty and from a company perspective got themselves a bargain as they held all the cards in this negotiation. Once again makes the ords more attractive too.

[igbertsponk] 11/12/2019 07:40

Buyback of Prefs at 115p.Not sure this is good news.Probably Invesco bailing which is kind of expected due to Woodford contamination. But surprised they couldn't pass on to other institutions at more than 115p!!