Raven Prop P Discussion Threads

[cwa1] 06/5/2020 07:36

As expected but reassuring to see nonetheless:-

6 May 2020

Raven Property Group Limited ("Raven" or the "Company")

Preference Share Dividend (RAVP)

The Directors of the Company confirm that the quarterly payment of the preference dividend in respect of the preference shares of 1p each with ticker RAVP (the "Preference Shares") will be made, in accordance with their terms, on 30 June 2020 in respect of the period from 31 March 2020 to (but excluding) 30 June 2020. The record date for the payment of the preference dividend for the Preference Shares is 15 May 2020 with an ex-dividend date of 14 May 2020.

The Preference Shares will be entitled to a gross dividend of 3 pence per Preference Share.

A scrip dividend alternative (to be settled in Preference Shares) will also be available for all preference shareholders in respect of the preference dividend.

[kenny] 01/5/2020 12:33

I would suggest that the thinking on the conversion offer is as follows.

Although the buy-in of all of Invesco’s holdings is, officially, deferred until 31 July 2020, I think the parties and the market realizes that in reality it is not going to proceed, baring a miracle vaccine for Covid-19 appearing in very short order.

At this time and for the foreseeable future, it would be imprudent for the company to use a combination of its cash plus remortgage some of its portfolio to use a total of £135m to buy in Invesco. This is no time to be spending any cash on a buyback of shares.

Therefore, the current conversion offer for the convertibles, is a sensible alternative because it cleans up the balance sheet – leaving permanent capital comprising the ordinary and a single class of permanent preference shares.

I think perhaps that Invesco and others have been convinced that it is a sensible alternative for them as well; because it removes the redemption burden in 2026 leaving the two remaining classes of the company as permanent capital.

It allows the whole company to be reanalyzed and I think Invesco and others believe that a reassessment of the company will benefit the ordinaries and preference they receive, more than the loss on the convertibles they surrender in exchange. Quilter is agreeable, I imagine, because it is not suffering a loss because it bought its convertibles at a good price from Woodford, as did other institutional investors who may see the long-term benefits of a clean balance sheet upon what they receive in exchange.

In short, that by 2026 what they receive on the conversion, will likely be equal in value, or exceed, what they would have received upon a 2026 redemption.

[gfrae] 01/5/2020 10:00

The fact that they are no longer going to be spending £40 million buying in Invescos convertibles may be a factor.

[hindsight] 01/5/2020 09:19

As a holder of both I will not be voting for it on the present terms. But biggest concern is not the deal but the lack of a credible explanation for doing it. I suspect the convertibles kept them focussed on not rolling the dice on a decent balance sheet, where as with only undated equity / prefs they can

[my retirement fund] 01/5/2020 08:18

0.8 in prefs 0.2 in ords plus a 10 year convertible warrants at 25p may do it.

[my retirement fund] 01/5/2020 08:14

Come back again? They need to sweeten the deal then to something more sensible!

[kenny] 01/5/2020 01:30

The currently proposed conversion of the convertibles may not be a done deal. The special resolution needs at least 75% of the issued RAVC class to vote for it and the company has announced it has 71.9% on board - importantly, not just 75% of those voting on the conversion resolution.

No advice intended but if I held the convertibles, I would take the offer. If the company does not succeed first time around, they might well talk to other holders to get them on board and come back again. In these circumstances, even if they survive the current vote, the convertibles are probably 'dead in the water' e.g. no one is likely to buy them in the market above, say, 84p (or less!) even if they survive the current proposals: because of the danger of a further attempt.

As I say, no advice intended, not least because I believe the conversion is great for us RAVP holders.

[gfrae] 30/4/2020 18:39

It is the conversion terms that are annoying. I do not want to swap paper yielding 15/% for paper yielding 11% even if it is only until 2026, in fact even that suits me because I believe I will get paid then and not have to give 5p to a market maker to get my cash in. In addition I get a call option, and if all goes bad we get paid first!
I am not complaining too much because I also own the ords, but I would if I only owned the convertibles.

[kenny] 30/4/2020 15:41

Bear in mind that the current conversion offer for the convertibles does not involve any cash outlay by the company.

It is just not feasible for the company to find more than £214m in cash to repay the irredeemable class – which in any event requires a 75% class vote to be approved – and this after the possibility that the company re-mortgages some property to lay out £51m to buy in Invesco’s current ordinary holding. I believe that RAVP is permanent capital whereas, as we all know, RAVC is a redeemable that has a fixed redemption date of 7 July 2026.

[rayg5] 29/4/2020 19:33

Welcome back Kenny. Great news that you are fit and well. I agree with MH that it is most unlikely that the RAVP Prefs would be called. Directors live off them ffs.

[kenny] 29/4/2020 16:04

Indeed, I have made a full recovery and thank you all for your good wishes.

[cwa1] 29/4/2020 15:31

Hello Kenny. How are you getting on? Improving or better, I hope. Anyone in touch with him that can keep us posted?

Regards from all I'm sure.

[montyhedge] 29/4/2020 14:08

No chance directors own a big chunk.

[davebowler] 28/4/2020 14:53

One down one to go! I wonder if the company will now bully the irredeemable share holders into redeeming????

[ceaserxzy] 24/4/2020 20:05

I will vote against the proposal with my holdings, but it may not make any difference.

[bench2] 24/4/2020 15:08

I am not sure re company law in Guernsey re the level of votes before the company can force conversion of the CV Prefs into Ords and 12% Prefs . It used to be 90% in the UK, they may end up with small PC holders sitting with the Cv Pref until redemption .

[ceaserxzy] 23/4/2020 19:11

Is there anything that small PIs can do to stop this? Such as if all small PIs vote against this. It seems they already have over 70% of all the votes.

[igbertsponk] 23/4/2020 17:17

Annoying how quickly it bounced when I wanted to add oodles more.

[eeza] 23/4/2020 17:12

there are lots of FI investors who like the certainty of a call date, and don't like Irredeemables.

[gary1966] 23/4/2020 16:50

With regards to why RAVC holders would accept this then maybe it is because they want to secure a long term, cumulative and irredeemable high yield rather than one that expires in 6 years.

[otemple3] 23/4/2020 16:21

Yep, sorry I misread the bit about IAML as meaning the whole purchase agreement was off meaning an overhang of RAVP but having reread it it is clearly just RAVC which is off (due to the announcement)

[eeza] 23/4/2020 15:54

Little brown envelope?

[gfrae] 23/4/2020 15:39

I agree hindsight,I cannot understand why RAVC holders agreed. Unfortunately yet again,RAVC seem to have been well offered at 90p for some time, I assume by someone who had some inside information. There has frequently been an offer of 27,500 RAVC's at 90p,it seemed to me there was an almost unlimited supply at that price.
Why would you swap 6.5p p.a plus 45p over the next 6 years equating to a yield of over 15%, and priority in the event of a wind up for the Prefs yielding less than 11% ?
Nor do I see a problem with liquidity as at worst you know what you will get in July 2026. Further I would also say that they are better value,particularly at the moment, than the ordinaries (which I also hold).
I assume that Quilters have a particular reason for accepting this valuation ?

[cc2014] 23/4/2020 14:49

Think it's about liquidity. RAVC holders prepared to give something up to gain benefit of more liquidity in RAV and RAVP?