Regional Reit Share Discussion Threads

[hindsight] 12/3/2024 09:19

All no surprise, been saying for a while equity raise & debt for equity been on cards
Would roll my bonds into equity at 10p per share

[nickrl] 12/3/2024 09:13

@Specto Yahoo link doesn't list the biggest shareholder! anyhow that is MAJIK PROPERTY HOLDINGS LIMITED (9.1%) who were the vendors for Squarestone that disastrous acquisition that RGL made which was loaded with vacancies. Mind you the root cause was the dump out of industrials sell off income producing assets that had plenty of rental upside on them. Next up is Old Mutual (6.9%) rest are c1% or well below including Inglis (0.4875%).

So if Majik aren't interested in supporting a RI thats going to stick another 2-3% margin on the underwriting fee. Conversely maybe they could offer to buy back their former portfolio at a rather hefty discount!!

[m_kerr] 12/3/2024 09:04

Do Squarestone still hold the 84m or so consideration shares from the 2021 acquisition? If so, doubt they would have any interest in putting any more capital into any potential equity raise.

[spectoacc] 12/3/2024 08:49

It's been reckless for some time: the huge cash divi, the ridiculous acquisition, the failure to deal with (even sell off cheaply) the voids, the total head-in-sand, last to see what's going on from Inglis.

The office market is structurally challenged - it was heading that way even before Covid accelerated it. Covid was 4 years ago! You'd have to be blind not to see it.

Offices aren't dead - far from it - but as all those 20-25 year regional leases come to an end, they're going to re-let at lower rates, and probably only after substantial CapEx.

No exaggeration to say RGL's short-term existence now relies on having an underwriter. Seems a decent chance of a CAL situation, someone taking de facto control post-RI. Perhaps the Singaporeans, which would mean Inglis still in charge.

All IMO.

[skinny] 12/3/2024 08:49

The way this has unravelled, shows the sheer arrogance of management - what a mess.

[rat attack] 12/3/2024 08:45

BOD need to resign immediately. This is probably the most diabolical handling of a fund raising I have seen. The BOD exhibit little grasp of the property market and given the market conditions we currently have this should have been refinanced 12 months ago. To let the maturity run down to less than 6 months is unprofessional in the extreme and a totally reckless approach to running a business.

[williamcooper104] 12/3/2024 08:44

Issue is that for last two years there should have been no divi Post rights issue it'll be a lot lower due to much greater share price Plus if you are going for the long term value realisation route then you need capex; lots of it

[redhorse2020] 12/3/2024 08:37

Sure but if no scrip div now then why do it post rights with no retail bond to worry about and circa 2 years to run on low rate debt? Especially with interest rates due to fall. I actually think it's a good idea to use the scrip option and retain cash in the business just can't see them doing it.

[bdbd11] 12/3/2024 08:36

Bought a few to average down. At these levels the discount to nav is significant. My hope is the whole raise is as a rights issue, then it wouldn't matter what the price was. I'd likely apply for an over subscription. Can't disagree with the comments on what a S show this has been, but it is now very cheap.

[williamcooper104] 12/3/2024 08:34

In line with REIT rules allows for a scrip divi See HMSO

[spectoacc] 12/3/2024 08:30

Are they up for underwriting it tho.

Wouldn't trust Yahoo but says perhaps 22% held by institutions:

[redhorse2020] 12/3/2024 08:28

After raising equity I guess they'd have a couple of years of low cost debt and would carry on paying dividends in line with REIT requirements hoping to refinance the longer dated debt in what should be a much lower interest rate environment. I can see the argument for a wind down but it's not a great time to be selling and the proceeds would presumably all go to pay off the low rate secured debt first anyway.

[williamcooper104] 12/3/2024 08:25

10p for a distressed rights issue is not actually a terrible levelSo presumably a few major shareholders are up for it

[williamcooper104] 12/3/2024 08:24

If the NAV is realistic then surely an orderly wind down is better than raising equity Even after raising equity it's likely to be a few years of scrip/low divi

[cc2014] 12/3/2024 08:23

Curiously the retail bond has risen in price suggesting some think this rights issue is actually going to take place and be successful.

[redhorse2020] 12/3/2024 08:23

Surprised to see such a big share price drop given that the Edison note had already indicated an equity raise was a very strong possibility

[spectoacc] 12/3/2024 08:15

A lesson in how not to run a REIT, and in how not to announce a RI. Really hope they had an underwriter signed up, because who'd underwrite £75m here?

[williamcooper104] 12/3/2024 07:59

Yep it you just looked at cash on balance sheet at one point it looked like they did If you adjusted for tenant deposits, working capital and capex funding then it was clear that they didn't (unless they had axed the divi)

[spectoacc] 12/3/2024 07:55

@grahamg8 - they'll still try to make £60m of disposals even if they somehow raise £75m at 10p.

[grahamg8] 12/3/2024 07:35

On the assumption there is a price at which I might buy more I re-ran my projection over the weekend for selling assets to retrieve the situation. Even at 21p the numbers didn't look good. If we get a big enough fall today then I may be tempted. More debt or equity or a combination looks a better outcome than a fire sale.

[cc2014] 12/3/2024 07:25

Looks like RGL have been told by their broker that releasing market sensitive information through Edison rather than RNS isn't appropriate.

[spectoacc] 12/3/2024 07:21

Tempted to look up which poster on here kept saying they already had enough cash to repay the bond...

Again - good luck RGL getting this away, I hope they do, but providers of new money are still going to end up with a co with a c.45% LTV.

[williamcooper104] 12/3/2024 07:17

Indeed Of course a rights issue means a greater £ value NAV and thus materially higher management fees Literally a payment for failure

[spectoacc] 12/3/2024 07:09

Now a danger the price heads towards the mooted RI price - if they don't get it underwritten, there's going to be a chance of it failing IMO.

[skinny] 12/3/2024 07:02

Further to the Q4 trading update published on 2 February 2024 and the dividend declaration announcement on 22 February 2024 (together, the "Previous Announcements"), Regional REIT (LSE: RGL) notes the recent press speculation regarding the possibility of the Company undertaking an equity capital raise of around £75 million.

As indicated in the Previous Announcements, the Company is actively exploring a range of refinancing options, including debt and/or equity, in respect of the existing £50 million retail bond (the "Retail Bond") given its maturity date in August 2024.

The Company confirms that significant preparatory work has been undertaken to date in respect of both the debt and equity options, which remain under active consideration.

In the event that the Company proceeds with an equity issue, the Company expects that it would be at a material discount to the Company's current share price and would be subject to, amongst other things, shareholder approval.

The Company continues to consider its options and a further announcement will be made when appropriate.

- ENDS -