Raven Prop P Discussion Threads

[stemis] 19/3/2022 10:26

I think there are a lot of unanswered questions which hopefully the circular will go some way to address. I don't think it's anything like as clearly a total w/off for prefs as some seem to believe, otherwise management (with the backing of institutions) wouldn't be undertaking this structured transaction. The fact that it is a put option, rather than a straight sale, suggests there is 'some' doubt as to whether the company will need to do it. Management have a lot invested here, so are well motivated to get something out of it...

[keith95] 19/3/2022 10:04

Why would shareholders as per the document released by Raven agree to a total wipeout?


The RNS states:

“ The Circulars will include further information on the Transaction and loan and preference share instruments in RRHCL.

The Directors have confirmed their support for the Transaction and the De-listings. The Company has discussed the De-listings in detail with its major shareholders and expects their support at the relevant meetings.”

Discussions have taken place, with an expectation of agreement. So no agreement has been made… the only thing we know is that discussions have taken place.


If shareholders are wiped out for 0p there is nothing gained by either agreeing or disagreeing … to the put option…

… so its not unreasonable to assume a paltry settlement for equity holders.

That leaves the preference shares out in limbo … I suppose equity holders could vote to shaft preference share holders as a part of the put option, but it’s speculation.

So we don’t know without further information.

So I’m taking the view of possibly something but not much coming back, that would include nothing.

[the monkster] 19/3/2022 09:02

it's a total w/o keith unless im mistaken for both prefs and ords…..of course it doesn't look good.

[keith95] 18/3/2022 23:42

Zangdook,

I fail to see the point also, save that RAV is no longer listed on the LSE …. So why not list on the MOEX?

As far as I can see, the put option effectively wipes out equity holders of RAV.

We also have:


“ Following the exercise of the put option RPG will hold the loan and preference share assets above along with any cash balances. Its principal commitment will be its own preference shares.”

… the “preference share assets above” presumably refer to those created in Prestino Investments to pay off the £670 m debt ….

… but how are RAVP holders to be paid from “cash balances” and how is cash transferred from Prestino to RAV as a shell company?

It doesn’t look good … but we will get clarity at some point.

[m_kerr] 18/3/2022 20:18

i've warned multiple times in the past few weeks that this business is insolvent, fully setting out why. i stand by that, although if they have some SPV's with some residual value, investors may still get a few pennies in the pound (or roubles).

[gfrae] 18/3/2022 15:45

Nobody has considered the exercise period of the Put which the company has bought, surely the Put is the worst case scenario, not necessarily the most likely. Otherwise why would the parties have agreed to it ?
Or maybe it is to convince the authorities that transfer of ownership will happen, whilst simultaneously keeping the option open of not doing so ?

[igbertsponk] 18/3/2022 10:44

Value for the prefs, as that's what the directors mostly own of any likely value. The Ords you can kiss goodbye.

[zangdook] 18/3/2022 10:26

but value for whom?

[igbertsponk] 18/3/2022 10:25

Well, here we are then.
For what it's worth, Igor is a decent guy and very well connected in Russia. he's been part of the team since day one and I suspect has massive loyalty to the rest.
So if anyone can extract some value out of Russia it will be him.

[stemis] 18/3/2022 10:22

I think it would be worthwhile unravelling whether this new company is in North or South Cyprus as the EU does not recognise Northern Cyprus.

I believe it's South Cyprus as the head office seems to be in Limassol

hxxps://www.rrhcyprus.com/contacts/

[stemis] 18/3/2022 10:20

The difficulty with assessing the viability of the RRHCL is knowing the detailed corporate structure of the Group. As it says in the Annual Report

"Other than our St Petersburg office portfolio, each of the secured
facilities sits in a special purpose vehicle (“SPV”) structure to minimise
recourse to the overall portfolio."

So some of these SPVs may fail but others may survive, even if the cash is trapped in the SPV in the short/medium term.

[cc2014] 18/3/2022 10:07

I think it would be worthwhile unravelling whetther this new company is in North or South Cyprus as the EU does not recognise Northern Cyprus.

If I remember correct Russia effectively bailed out Cyprus (or was it Northern Cyprus only???) out when it couldn't raise capital in the 2008/9 financial crisis.

I'm sad to say I would need to do some more research to fully understand it all.

[zangdook] 18/3/2022 09:58

Cyprus as part of the EU must have Russian sanctions coming out of its ears too. So I don't really see the point. It's not as if RAV has some other business it wants to separate from the Russian assets.

[muzerewa] 18/3/2022 09:25

It all seems smoke and mirrors attempt to present to the world that RPG no longer owns the Russian assets, when actually nudge nudge wink wink it more or less still does. Not entirely clear over whose eyes the the charade is intended to pull the wool. RPG trying circumvent Western measures or Russian counter-measures or both?

Good point about stand-alone assets held in RPG accounts. No good reason why they can't straight away be paid out to the RAVP holders.

[keith95] 18/3/2022 09:13

dandigirl: "The piece I did not include was not relevant"

In your rather limited opinion.

This from your article:

"The plans mean Raven Property will effectively be left as a shell company, with any assessment of its value or that of its Russian business deemed to be ‘unfeasible217;"

We have already worked out, while:

"The sale, which will be for a ‘nominal cost’, and the de-listing are expected to be backed by major shareholders, which include asset managers Quilter and Schroders."

,, suggests equity holders will get something back - but not much,

[stemis] 18/3/2022 08:17

Post the transaction RPG should have no problem publishing accounts and I don't see why they should be qualified on going concern. The company will have net assets of up to £50m* plus investments in loans and preference shares in RRHCL against which it will provide. There's a 'possibility' (although not a certainty or necessarily a likelihood) that they will restart dividend payments to prefs as the cost is around £6.5m a quarter.

[* I qualify that with the fact that I haven't seen the holding company balance sheet and hopefully there will be more detail in the circular]

The purpose of the transaction is not, as some seem to think here, to give the assets away to management but to alter the legal ownership of the Russian assets whilst maintaing RAV shareholders interest in the income stream through it ownership of preference shares in RRHCL.

If there is any crumb of comfort for preference shareholders in all of this, it is the statement in the announcement

"Following the exercise of the put option RPG will hold the loan and preference share assets above along with any cash balances. Its principal commitment will be its own preference shares."

[keith95] 17/3/2022 22:25

dandigirl: "because it is clutching at straws"

Likely - but you can't negate someone else's comment by half quoting a part of an RNS that suits your beliefs - that's rubbish.

[williamcooper104] 17/3/2022 21:21

Eventually they have to produce accounts or have the company stuck off - but can go quite some time before having to do that Those accounts can be issued and signed of on a none going concern basis (I did that in the credit crunch)

[dandigirl] 17/3/2022 21:00

keith95: because it is clutching at straws, it isn't important to whether or not payment is received at the end of the month. Lots of things may happen after the end of the month. I would love them to pay but payment just isn't going to happen. What happens after that is in accordance with Pref terms if the company survives.

gfrae seems of the view that payment is likely to be received when likely it isn't.

You go on to make my point - accumulation after the event will more than likely will be worth diddly, so why do you try to make a point of it when there isn't one? Strewth. That's why I didn't think it needed adding. You can't have it both ways.

No, William, they don't have to produce accounts. It would be prudent to do so, especially if they wish to keep on the right side of regulators etc., but they don't have to. Much depends on their personal circumstances, motivation and future agendas. Much also depends on what shenanigans are going on behind the scenes.

To finish, frankly, I am surprised that the Pref is unlikely to be paid. Given who owns these Prefs, what better way to remove some cash from the company all legal and above board. There is a glimmer of hope but the pessimist in me is not expecting receipt.

[keith95] 17/3/2022 19:56

"supposed justification for de-listing"

Quilter have apparently written off their Raven investment ...

//portfolio-adviser.com/raven-property-to-de-list-after-russian-sanctions-make-it-impracticable-to-carry-on/

So the directors may get little opposition to the idea of delisting.

[williamcooper104] 17/3/2022 19:31

They'll still have to produce accounts even if de-listed