TX2
11 Dec 2014
Re: Recovery stock of 2015 The basic problem with ALPH is that it is overgeared financially & not a viable business,it is a zombie company awaiting a time when lender can get their money back or as much as possible.At best property companies post crash can borrow twice their equity,anything more and lenders are uncomfortable.ALPH is borrowing somewhere between 15 to 20 times equity depending on how you are looking at the cash.Remember much of the cash apart from that from ring fenced property sales cash is advanced rentals,so is needed to balance interest usually paid in arrears.Far too risky,the lender is taking on all the risk,no asset cover,no income cover especially when as here its managers are taking out 1% per annum on gross value as a fee in addition to generous running costs claimed.ALPH portfolio is quite risky as a very large chunk is rented to one party(Alcatel);it is also risky as it is borrowing in UK to fund property in France & Spain.ALPH was always highly geared even at the time when it was set up during the property boom;but even so it did have then circa £100m equity.It is unlikely to get a new lender;Barclays may have little alternative but to extend or put into liquidation;essentially the lender is waiting until someone comes along and buys the property to get their loan repaid.I accept with tiny penny stocks there's always a possibility of a ramp pushing up the price although it is not helped by the huge spread as you need a big rise to get your money back.But there's also a risk of wipeout if/when Barclays pull the plug.
atex69
10 Dec 2014
Re: Recovery stock of 2015 Your understanding is correct, the cash held in the bank is ring-fenced to be used to pay down the debt in Feb 2015. But you strangely neglect to include this ring-fenced cash in your calculations, was that in error or are you purposely trying to make the company look worse than it is?.When you add the cash and the potential to revise property values upwards (based on recent disposals and the ALU extension Then this is not far off the 80% LTV. but even at 95% LTV there are still lots of finance options available, the only downside would be the interest rate payable which makes this uncomfortable until the property prices appreciate, my calcs show what a difference a few percent improvement in property values can do to the NAV, the effect on full recovery puts this with a NAV higher than 60p per share and dividends at 7p per share possible.This is now a strong buy, still plenty of risk, but outweighed by upside potential. 2000-3000% Pos in few years IMO.
TX2
10 Dec 2014
Re: Recovery stock of 2015 I was refering to the debt,which is the larger part of the total, with Barclays that is due to be repaid in Feb.My understanding is the cash held by the company for the most part is held as a security by Barclays in a cash pooling agreement and is basically unavailable to the company.
atex69
09 Dec 2014
Re: Recovery stock of 2015 lol right back, you have managed to reduce the debt by £23 mil in the last couple of days, you also take no account of how much cash is in the bank or the pending property re-valuationBarclays make profits on lending money, they are not a property company. this will be re-financed.But if you think it is so bad , why not short it.Most of use shorting this north of 40p, that was the time to be critical about the valuation, not when it's bottomed. Shorts are closing so you might even get an decent price to short from soon.
TX2
09 Dec 2014
Re: Recovery stock of 2015 Just LOL!The debt expires on 15 Feb 2015!All the debt circa £210m is due for repayment then.Know any banks that are prepared to lend this amount when the asset value is only marginally above the debt value and its manager is taking out a £2m plus management fee in addition to generous management costs?Barclays want their money back,ALPH can't pay.At very best this company is in orderly wind down.
atex69
09 Dec 2014
Re: Recovery stock of 2015 It's a Bit misleading to be quoting gross liabilities and net assets. it's even more misleading to be quoting an incorrect Net Asset value, but why let the truth get in the way of a good storyThey have several million in cash in the Bank too.Property - debt = 278-269 = approx. 11Milion = 10.7c per shareProperty - debt + >8mil cash in bank = >19 million = > 15c per shareCurrent price = 2c per shareProperty will be independently re-valued this month, based on the fact the company has been selling above book value it is expected a good mark-up this time round 10% increase in property price makes
roperty - debt = 305-269 = approx. 36Milion = 30c per shareProperty - debt + >8mil cash in bank = >44.8 million = > 37c per shareproperty+cash = 313 milDebt = 269milRatio = 84% LTV manageable debt given the glut of cheap money flooding the EU banking system at presentDon't let them mug you off guys, this has every chance of a good recovery with 20x current price possible in the next 5 yearsFrom interims.ADJUSTED NAV* 10.7 PENCE PER SHARE AS AT 30 SEPTEMBER 2014 (30 JUNE 2014: 12.0 PENCE PER SHARE)VALUATION AND NET ASSET VALUE ("NAV"
The Trust's investment portfolio was last valued on 30 June 2014 at €278.0m (£217.2m at 30 September 2014 exchange rate) giving an average valuation yield across the portfolio of 8.2% (French portfolio 8.1% and Spanish portfolio 9.0%).The next independent revaluation will take place as at 31 December 2014.As at 30 September 2014 the adjusted NAV* is 10.7 pence per share. The decrease in adjusted NAV from 30 June 2014 (12.0 pence per share) is due to the combined effect of Euro weakening and the loss incurred in the period.*Adjusted NAV - unaudited, after adjustments for the interest rate swap derivatives and 50% of the deferred tax provisions.As at 30 September 2014, the Trust has total borrowings of £210.7m (€269.7m) under its facilities with Barclays and there are no Loan to Value ("LTV" covenant tests until loan maturity on any of the Trust's properties.
TX2
06 Dec 2014
Re: Recovery stock of 2015 Company has £233m liabilities almost all debt is due for repayment;it has net assets of about £6m.It is not a viable business.It has management fees of £2m perannum.
optimistic john
05 Dec 2014
Re: Recovery stock of 2015 Hope you are correct but beware - the spread on these will seriously reduce any 'profit'
atex69
04 Dec 2014
Re: Recovery stock of 2015 Property is 5 mil above borrowing (30 mil above secured borrowing)Over 8 mil cash in the bankProperty is due to be re-valued this month, similar properties in the area have recently been re-valued at much higher prices in the past couple of months.Current NAV is expected to double and finance will be available when due to re-finance next qtr.Everyone is shorting this, but I know quite a lot of shorts are being closed prior to XMAS, buy now and you will double your money when the shorts close. Top slice half when the shorters chip out and leave the freebies to run risk free.now is the time to buy
TX2
04 Dec 2014
Re: Recovery stock of 2015 Unfortunately probably worthless!It is financially geared to the eyeballs,and the bank wants its money back(about 1000% gearing) & is locked into paying a management fee to Alpha of approx its current market value per annum.
atex69
04 Dec 2014
Recovery stock of 2015 Coverage will start in January 2015 for top 5 recovery stock of 2015Time to buy is NOW before the crowds jump on board.Strong strong BUY - more to follow
