-3x Short China Discussion Threads

[boffster] 21/6/2011 14:00

This stock seems to need a constant flow of positive news..

[warwick69] 21/6/2011 11:43

any new business running 400 homes must surely be worth more than current pitiful 13 million market cap? surely more than double blimey even if they could muster a £10,000 profit at each home would give £4 million profit at 8 x PE would give £32 million mkt cap which is 17p on current share price.

Surely you would expect to make at least £10k a home,otherwise what is the bloody point in running a business its not a charity. Blimey just read at weekend that guy that runs the Car Mobility Fleet for disabled earns £1.17 milion and it is a not for profit organisation. So clearly government money makes some people very wealthy thank you very much?

[b1llyboy] 21/6/2011 11:33

Warwick..........

Makes a lot of sense,this would form form the basis of the new business model,would it not?

I think we need to look at the numbers and come up with a guesstimation of likely revenues and share price valuation from here.

[warwick69] 21/6/2011 10:04

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However, they admit that a detailed comparison of the two proposals, as laid out in a document obtained by the Financial Times, reflects the starting point for the forthcoming discussions.

The report was produced by AlixPartners, a consultancy advising the landlords. It reveals a consensus between the parties that the restructuring should leave a slimmed-down Southern Cross – referred to elsewhere as "FutureCo" – with 400 homes, compared with the current 752.

According to both proposals, extensive rent cuts by the landlords and compromises with other creditors would reduce the company's net liabilities from £284.4m to £79m. The landlords demanded equity in Southern Cross for all "parties that contribute to the restructuring", while the company suggested more vaguely a "potential equity upside".

Landlords also wanted influence over the composition of Southern Cross's management team, according to a person familiar with the situation. Sources on both sides said that several of the landlords had been eager to see the back of Jamie Buchan, chief executive, before the meeting last Wednesday.

That meeting ended with a declaration by the landlords of "full support" for Southern Cross's management. However, according to one person with knowledge of the situation, that vote of confidence was intended to reassure outsiders, with landlords still wanting to see a new team running "FutureCo".

"Nothing has changed," the person said. A letter sent to landlords last Thursday, debriefing them on the previous day's meeting, suggested that Southern Cross had accepted the landlords' plan.

"The group has agreed to co-operate fully with the landlords to implement the proposals outlined to you on Monday," said the letter, which the FT has seen.

Lloyds Banking Group and Barclays, which are owed up to £50m by Southern Cross, were also "broadly supportive of the proposals", and government representatives were committed to a "consensual restructuring".

Landlords would be able to "take back their homes in the short term" or keep them under FutureCo's management, the letter added. "This process is now being driven by the landlords," it said.
.Copyright The Financial Times Limited 2011. You may share using our article tools

[warwick69] 21/6/2011 09:31

Dont think JJB landlords got anything it was accept or JJB go bust and so they accepted to keep a tennent i think this is the same.
The important question here is what do Henderson know they have staked a massive amount £1.6 million plus, they are not going to throw that amount even client money on a gamble throw of the dice surely. They must be fairly confident that there will be a solvent outcome and a viable company surfacing from the ashes so as to make a tidy profit for the investors.

I spoke with Company Finance Director yesterday and he said a circular has been poosted to shareholders and more info would follow soon, so as to keep shareholders informed. will have to be a vote to restructure capital base of business or something to that effect. He was talking of securing a solvent outcome also.

There is no reason we should not see a slimed down more efficient Southerncross emerge from this mess. The alternatives for all concerned are not attractive. Clearly the major problem in many industries when income is at a premium is upwardly only rent (and rates) agreements and they need to be discarded as soon as possible for all concerned.

For Landlords it is going to be increasingly dificult to renew leases or find new willing tennants at inflated rents? They should wake up and smell the coffee.
Or the UK will become another Euro basket case. There is far too much greed all around. Every one needs to accept that returns on all assets are going to be squeezed in a period of austerity and adjustment. We may see a decade of reduced standard of living for many as the world de leverages from massive excess credit?

[b1llyboy] 21/6/2011 09:13

Maverick............

That appears to be the whole crux of what is looking like the reason they can't move forward.

I'll have root around and find out how much the JJB LL's asked for and got,mind you they were under court orders.

[mavverick] 21/6/2011 08:57

thanks bb i wonder how much equity will the LL's get for the debt restructuring

[b1llyboy] 21/6/2011 08:41

Daniel.............

You misinterpreted my post,i was referring the the iii BB,lol.

According to my calc's i would expect 15-18p after net debt restructuring and based on SCHE furtureco keeping 400-500 homes.

[b1llyboy] 21/6/2011 08:36

Net debt restructuring from £294-78m.

[daniel] 21/6/2011 08:35

The SCHE board is doing their best, and that best will involve fairness to shareholders, some of which have lost 950% of their investment in SCHE. Expect 20p in the first instance, we've seen it all before; the director are not idiots.

[b1llyboy] 20/6/2011 18:43

Well they certainly got them from somewhere...........The question is.
Maybe the government are selling asset's from northern rock investment arm,maybe a conflict of interest on the horizon.............RBS?

A lot of PI's did take their money and run.

It's as good as their money.It is not possible to tell'

Looks like Henderson at it again.

2 mill @ 17:15 looks like a buy.

[gerryjames] 20/6/2011 18:11

You still have 80K more than them. It's not their money.

Interesting though.

[warwick69] 20/6/2011 17:41

Theres me worrying about my 80,000 holding when Henderson go and buy a further 5 million now giving them 20.3 million 10.82% i am sure they would not have purchased £400,000 more if they were not very confident that this was going to go up?

Who is supplying that amount of shares cant just be PI selling surely?

[b1llyboy] 19/6/2011 19:59

Interesting......

Potential source of funding.

[b1llyboy] 19/6/2011 19:53

LE..........

I don't think the price matters,it's what preceeded the IPO that's the issue,all sort's of market forces come into play after an IPO.

[lej2] 18/6/2011 22:37

Blackstone didn't dupe anyone here. They sold by means of an IPO ar £2.75 if memory serves. Later share price went up to over £6, so many of those who bought at the IPO price made a very nice profit. Blackstone can hardly be accused of selling out at the peak.

[mavverick] 18/6/2011 17:22

interesting post thanks billyboy

[edmondj] 18/6/2011 16:29

Looks as if the Blackstone lawyers have bitten back; web page no longer available.

[b1llyboy] 18/6/2011 14:45

I hope now the media focus their attention on Blackstone.

Blackstone was this week landed with a lawsuit in the US accusing it of siphoning $2.1bn in a 'tainted' leveraged buyout of Extended Stay America Inc that preceded the hotel chain's bankruptcy.
Blackstone teamed up with Citigroup in 2007 to sell the 680-hotel chain for $8bn to private equity investor David Lichtenstein, a 'mark' who was willing to pay too much, according to a lawsuit filed in a New York court brought by a trust trying to recover funds for creditors. Blackstone said the lawsuit was without merit.


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[b1llyboy] 18/6/2011 00:55

Someone's had a drink.......................... SAD

I'll say it for you "rant over"...............hic................zzzzzzzzzzzzzzz..

Don't be to embarrassed in the morning we forgive you.

Normal markets activity,profit taking after the recent rise.