Wt Wner Usd Discussion Threads

[scburbs] 14/8/2009 13:58

There it is. NAV now below £1.4m (actually below nil, but IMS only indicates below 50% of called up share capital of £2.8m).



The quoted reduction in debt is meaningless as the property disposed of would have been at or around 100% LTV (i.e. debt and assets falling by the same amount).

[scburbs] 14/8/2009 07:54

Investors getting confused here? When a company is at 100% LTV the banks are normally in charge. If they had been on 70-80% LTV (like CAL) then I would understand the share price rising.

As a main market company they are obliged to issue an IMS by 6 weeks before the end of the first half. Deadline would seem to be next Wednesday 19th.

[timanglin] 05/8/2009 11:05

i tend to agree with post 164, crunch time from my point of view is when we know the refinancing terms and new interest rates(dyor) imho...

[scburbs] 04/8/2009 16:12

AIF and Apia valuations now available at 30 June 2009. They have fallen around £3.5m from 31 March (i.e. £47.5m to £44m).

This fall on its own pretty much eliminates shareholders funds (but these are clearly negative on a current basis anyway). More interesting is the implied leverage rate and what this means for the Funds.

On the basis that no disposals were made in the quarter then the LTV's in these funds increase to just over 65% (which was supposed to be their covenant threshold).

If these funds decide to raise fresh equity to reduce the LTV (as other Aviva funds (e.g. the CAL ones) have done) then it will be game over for WNER as they have no way of meeting an equity raise and the dilution would be the final nail.

[scburbs] 04/8/2009 14:37

I am expecting an interim management statement in the next couple of weeks. Seems a bit bizarre, but it is a reflection of how late their final results were.

I suspect that this will not contain a resolution of the financing arrangements.

What is most interesting is what AIF and are APIA going to do as these are the only semi-solvent investments that WNER manage. I'll bet the valuer of the management business didn't discount for the fact that around 50% of WNER's management contracts (by property value) are for insolvent businesses (i.e. WNER's own property and all of the JV's)! Not sure you would apply much of a earnings multiple when you make this assumption!

[nickcduk] 04/8/2009 05:51

RBS and BARC will have to come to an agreement about what rate to charge as well. Won't be easy and they will probably be keen on WNER making further disposals so they get their exposure down to lower levels. That takes away further recovery potential. My own view is that they will sell WNER out if they can find a bidder for the management arm. At the same time they will offer the WNER portfolio for sale and hope one of the vulture funds fancies a crack. Anyone buying needs certifying imho.

[scburbs] 03/8/2009 21:55

The statement below may be factually correct, but it is one of the most misleading forward indicators of a company in breach of all its bank facilities and any investor should ignore it in making an investment decision.

At what interest rate would you lend to a 100+% LTV borrower? Perhaps 60% LTV at 6% and 40% LTV at 15% giving a blended refinanced cost of debt at 9.6% (this is ignoring arrangement fees etc.). No recurring profit here at those sort of rates so all the comments in the results about recurring operating profit are very misleading!

"The Group's average cost of debt at 31 March 2009 was 3.44% (March 2008: 5.84%)."

[scburbs] 03/8/2009 21:25

Even worse than I expected with NAV at 8p and now negative as indicated by Nickcduk. The management contracts may be profitable if the banks allow them to survive, but the profits will just be swept to the banks through increased interest rates and fees.

Worth noting that they have been discussing the refinancing with the banks since February and its a fair bet that if they do refinance it will be on terms that pick up any excess value. It is surprising that the share price is holding at 28p.

As I said in the past, at best, this is set to be a zombie fund being run on behalf of the lenders. Whilst it could come back if property values rise it is currently worthless other than hope value.

[cudman] 31/7/2009 15:33

I think it's worth a punt. I got in today @ 25p. I reckon the banks will be flexible enough and this will come back strong next year.

[nickcduk] 31/7/2009 13:50

NAV is now negative. They have broken all their banking covenants and have debt which needs to be renewed. Totally up the creek without a paddle but obviously a few out there who think the banks won't call in the loans. If they don't then eventually you might see a return but wouldn't fancy my chances from around current levels. They have sold off a lot of assets which won't join in the recovery.

[jab118] 31/7/2009 12:37

Nearly bought in here today at 20p level.. then again I thought it could well drop awee bit more...

How wrong, one can be in a bull market...:@)

[nickcduk] 31/7/2009 07:50

Shocked to see where it opened this morning. Unfortunately was slightly distracted so missed lobbing a lot more short out. I would guess banks would pull the plug if they could find a buyer to take it off their hands. Panther injecting a few quid and a small write down of debt from the banks would probably win the day.

[nickcduk] 31/7/2009 06:45

NAV down to 8p at 31st March. Now in negative territory. Dirty scoundrels trying to get out of paying dividend by using last years overpayment. Not sure UK Govt. will allow that. If they are ordered to pay it then I think banks would pull the plug. Even if they let it carry on the banks are going to bump up margins to extreme levels. Would expect shares to fall very sharply today. That is stating the obvious though.

[nickcduk] 30/7/2009 15:24

I think banks are going to get their pound of flesh and then some. May even force through a sale of the company to the likes of Panther. Doubt shareholders would be left with a lot.

[eeza] 30/7/2009 15:15

When it's good news they can't wait to get them out, but when it's bad news they don't want to put them out at all.

[angus duncan] 30/7/2009 13:47

I phoned and asked and was old they should be out sometime this afternoon.

I prefer them out in the morning that's for sure

[nickcduk] 30/7/2009 13:43

Silence is deafening. Wonder if we are going to get results before market close. Never a good sign when results don't come out as they should pre-market.

[nickcduk] 30/7/2009 07:48

It is the 30th July!

[angus duncan] 30/7/2009 07:00

No announcement on 17th June stated results due 30th July

[nickcduk] 30/7/2009 06:46

Slightly confused with my dates. WNER results are due out today. No sign of them so far. Could be ominous.

[nickcduk] 26/7/2009 11:48

Its D-Day this Friday. They have their results out. Another area where they may have screwed up was in breaking the swap liabilities last year. This means they will have a decent increase in recurring profits. The bad news is they will have to pay most of it out as a PID. That could be worth 10m or so. The banks will have to decide whether to let them pay that out to shareholders or else grab it to cover risk of losses on loans. They might try and fudge the reporting side to show a much lower recurring profit so that banks will give them a little more breathing space. Imagine these negotiations will go down to the wire. If they manage to survive they will have done exceptionally well.

[scburbs] 07/7/2009 08:38

Per the broker note the LTV covenants on AIF and APIA are 65% (note is from October 2008). Very little headroom against these covenants so AIF, APIA will need to continue to sell or raise equity. Given values have continued to fall from 1 April to 30 June they may well be in breach of these facilities now (depending on test dates).

I suspect WNER will be trying to go for an expensive debt renegotiation combined with further asset disposals whereas Aviva (as indicated by the solutions used by CAL (also in funds with Aviva group) - although the funds there had a higher gearing) may prefer an equity raise.

AIF also has 30.7% of lease income expiring in less than 1 year and 30.1% in 1-3 years. This can't be good for valuations given any new lease terms could be on much lower rents.

[scburbs] 06/7/2009 21:56

AIF is now at 63.3% LTV and APIA is at 59.5%. I think these funds are now threatening their covenants (being the only investments on which WNER may not have breached covenants!). I think I had a broker note showing the covenants on these funds. I will try and dig it out.

Whilst these funds may or may not have breached their covenants, WNER borrowed against the value of the units in these funds, piling debt on top of debt. The covenants on these loans are well and truly breached.

At this level of debt AIF and APIA could both use an equity injection. WNER would not be able to subscribe to such an equity injection which would seriously dilute the £47m of gross value that WNER still has in these funds. I suspect WNER will be resisting an equity raise and pushing for revised covenants. Depending on the views of Aviva and other investors this may be creating a conflict.