Suspension is as planned b/c of AIM rules.
Company was intending to investigate a matched bargain basis.
I'm surprised the price held up as investors scrambled for door not wanting to be holding shares in a private company.
agreed. They don't mention if Nectrus is (counter) suing for this money on the basis UCP's case against them is not proven, so on what basis can they hold it. I'm v pleased they hang onto this. One possibility would be to transfer the ownership of the actual investments to Nectrus in lieu of the 18m, seems a simple solution esp if UCL were to take the hit of legal fees to date and maybe some sweetener.
Should not be a loss as you should have received approx 48p a share in cash a week ago.
If you read the posts below it will expolain the payout on the remainder is 0-8p - your guess is as good as our !
I've taken my eye off the ball recently and had a bit of a shock to see what's been going on. I've read the announcement and I understand why I've now got a large number of low priced shares rather than a small number of higher priced shares. I also understand that UCP as a company is being wound up.
What I'm not clear on is what happens to the shares now and what level of attention I should be paying to this. I've tried to take the long view with my investments and thus don't pay attention to daily fluctuations. However, I'm getting the impression now that this has turned into a short-term 'riskier' investment, with potentially a lot of fast upside or downside. Would you agree with that assessment? Has anybody seen this kind of process before and know what type of key dates to look out for? I guess an option is to hang on to the bitter end and hope the company's assets turn out to be worth more than the current share valuation?
I'm also struggling to work out where I stand on profit/loss. I bought at around 16-18p a share many years ago and was nicely in profit up above 40p/share. But now III is showing an 18% loss.
If you're reading this and thinking, "what an amateur" then I guess I deserve it, but will appreciate any advice/explanation you can give.
I make it as a weighted probability re the different assets left worth probably 4p and maybe 6p
though downside might well be only 2p and 3 months+ to wait!
the interesting aspect is how much the listed shell might also be worth
from memory there are significant tax losses that can surely easily enough be utilised.
so a bit of me (with holder bias!) that thinks we might just be surprised with the end result.
one thing for sure the price mvt when in the waiting period for a bid was clearly (with hindsight) being bought by insiders so I suspect if the result of money chasing or shell uses are favourable there will be price activity in the run up to an announcement.
All IMHO, DYOR + BoL
UCP is in my portfolio
(prior to CASH return a top5 hldg - see previous posts)
The money is not with the buyer. Basically, they paid less because of of the subsids investing in a couple of structured products sold by two Indian investment companies. I looked them up last year, both quoted and seemingly legit. Thus, it's v difficult to see why the money has not been repaid if the term of the product/investment had passed. There is a strange statement in one circular that seem to imply that the UCL subsid had acted inappropriately in making these investments, but I cannot see that helping us.
I had hoped for a better explanation from UCP, especially about other measures.
There is an ongoing litigation cost so some of the contingency will very likely be used up.
Tax - who can say!?
The one thing about the investments is that they accrue interest at 8-10% dep on the company (cant recall details but they are in one of the circulars). Maybe that should ring alarm bells as too good to be true.
All in all a gamble of doubling your money at these prices.
There was a worrying statement to the effect that the 56p was dependent upon retrieving some funds from two Indian financial institutions in the circular. Hope these institutions are nothing to do with the Hiranandanis! I guess the sp reflects some residual risk
* OFF TOPIC but important that all AIM investors understand the pitfalls of investing in stocks that are being shorted down to rock-bottom levels? So you think that is 'cute', now you can buy at the lowest sp for months.........you've gotta be kidding...read on:-
UPdate...epitition (closes 24th September 2014, so still plenty of time to get those votes in)
A lot of irate investors ... are voting for this campaign...?
# Thanks to all those that have supported this HMGovt epetition !
~ *3,941 voted so far ~(That's a lot of irate investors?)
~~~~AND THEY CAN'T ALL BE WRONG ?
*How the big players transfers YOUR money into THEIR money !
here here FD, I've been holding a similar time (I jumped in mid 2009) through the thick and thin of all the dealings and the highs and lows of knight frank on the NAV, the director purchases, etc etc. Finally we get a decent outcome...patience will in this case , pay off at last! Only two of my ten or so choices that have actually come good long term (sigh).
Unitech in India has continued its surge ...
its now at 29 INR - less than 3 mths ago it was 11 INR
and trading volume has been HUGE with 5% traded today
DLF, which is similar but not as heavily indebted
is at 216INR up from 155INR recently
so there is def. some renewed interest in Indian property development
what does it mean for UCP?
well I think mostly positive.....
- means money happy to go into Indian Property Development
- generally gives increased valuations
- I think means Unitech will be keen for CASH (i.e. accept bid) so it can get back to developing
also see that relatively smaller buys for UCP was quick to push the price up
so I think that means a bid could be at a significant premium
b/c ordinarily there is little free float to confirm an 'accurate' value for the business pre-bid
but also it means if the short term traders pull out the price pull back will be back to c.40p
at 41p UCP (unitech corporate parks) owns 60% of 6 IT development parks.
the other 40% is owned by Unitech - listed on India exchange
unitech also manage the building of the parks
though UCP manage the completed developments
unitech was founded 40 years ago and is now one of india largest development companies though I think specialising in residential. roughly speaking it has assets £1600m of debt of £600m, i.e. NAV of £1200m and a MV of 500m
it is a development company and recently has made peanuts from development
and thus its debt is seen as a problem
note the unitech share price slide in recent years - huge!!
the NAV of UCP is c.52p a share vs share price of 41p
nothing new in there be a discount for a property company etc...
but looked at another way UCP is a GROWTH business
look at its share price over recent years....
steadily upward aside from recent wobble when RUPEE devalued 20%
roughly the summary of UCP is as follows....
the 6 parks breaks down to 5 that are in the process and a huge 6th park that will not be completed until 2023!
c.£150m has been spend on the parks to date and these are value at £250m so money well spent
of the £250m c.£210m relates to parts already rented and £40m relates to being built
the £210m generates profit after mgt expenses but before interest of c.£24m for 2014
so to me the valuation seems modest given that the properties yield 11%
even allowing for some errors through lack of detailed info in my calcs
it is a long way north of 8% seen in parks northern UK and the 5%-6% IN London
given that these parks are in prime indian development zones
so I think that the value is underestimated and I would make it now £210m but £240m
their growth in rental has been superb
so at some point the £40m of building work at cost will get rented and then worth much more
in total £150m has been spend in 7 years and now I reckon this is worth c. £300m so double the building cost
so the £40m cost currently being built gives them growth in rental income
and thus I would value at £50m
so Net Assets are stated as £250m less £65m debt = 52p a share
I say prob closer to £290m less £65m debt = 64p (with INR FX at 100)
the l.term park is thrown in for free!!
looking longer out the 5 parks are roughly 50% developed
and UCP will need to find a further £100m to develop these
so this is a double benefit - if it spends £100m it can double its rentable space
which is cheaper per sq foot than the first 50% and also when this money is spent it can generate c.20% returns
again ignoring the l.term Park 6
UCP has debt of £65m but has operating profit of £24m so its debt is very easily managed
and of course backed up by recurring rental income....
so what are the problems.....
will I think it seems straightforward enough
UCP would be able to raise a bit more money for its 60%
but Unitech would be unable to given it has minimal profits to cover £600m of debt
so Plan A was to sell their biggest park ....
this would have raised enough money to continue with the next projects
then current 15% shareholder Brookdale (Canadian Property Pension investor) made an offer for the whole business
which I think makes sense - offer when the project are capital constrained
and as outlined above they are in fact growth businesses for 10 years
which is a pefect pension fund time horizon...
but that is fine some-one wanting to buy - but do they want to sell...
obviously this is where a deal can fall down
from a shareholders viewpoint - one wants a deal as it crystalises the gain immediately
but directors etc.. may want to see out their project etc....
and thus not be able to reach agreement
but this point is the one that I think other investors are missing...
Unitech MUST sell!! well not must but they need CASH to de-gear and get their share price recovered
and of course they need CASH to fund the future development o
RNS seems like very good news though it is a little surprising that the price has not moved closer to NAV? also surprising is that the G2 sale was to be completed by end of Jan 14 but then no mention until this RNS when it says talks suspended. So I am a little nervous re the quality of information...
but on the upside...
NAV seems very well supported by rental income
Mgt Company is committed to buying c.£4m of shares in the open market when the closed period is finished.
per press reports it seems that Unitech is keen to raise CASH and although they only own 40% of the properties probably hold some sway with UCP. Thus I'm inclined to think that a deal will be done though no doubt will not be straightforward or at full NAV.
Still UCP mgt seem intent on creating shareholder value and with interest in the assets I think this can only lead to reduction in discount to NAV even if there is no immediate sale.
things will start happening here soon.We are about to dip into oversold territory for the first time since Sep., the start of the rise. This while maintaining a range of 39.5 - 42p,
Should see a good bounce in the next few days.
A rather boring share of late but at least it doesn't keep dropping like most of my others
Here we go. it's back to 2017now and can be moved on a vote. I think it might have 2014 to start with. Still, it's good stopgap knowing you will have a share of all those buildings.
Immediately following 31 December 2017 (if a resolution is not passed in accordance with
Article 156.2) or upon expiration of a Renewal Period (if a resolution is passed in accordance
with Article 156.2), as the case may be, the Directors shall arrange for the property and
assets of the Company and its subsidiaries to be realised in an orderly fashion in anticipation
of a return of capital to investors.
Thanks, so Nectrus buys to look forward to!
I remember in the dim and distant AE saying something about a timescale where the co would be wound up and assets returned to shareholders. I left him a message on SXX .
The website is US and I could only find one detailed broker note which didn't mention it.
They have to spend 75% of their annual 2% fee (which is paid quarterly) - they havent bought any since May presumably because of knowledge of the sale.
It gets a bit complicated (and I do not have the details) but they paid some other losses to UPC out of their fees as well (so did not get any fees for a short while) but from the info I have available they should have to still spend about 500k for fees up to sept '13 - when they do that I do not know but presumambly when sale is finalised ?????
Of course! It's so long since I was last invested here I had forgotten about the Nectrus share buying commitment.
Can you remind me of the outline terms of the 'returning the cap to the shareholders' thing too?
Hmm also think Nectrus have 500k GBP to spend on shares soon. So sale Gurg for 36p a share will mean more cash at company - also mean that the NAV goes up meaning Nectrus have to buy more shares while others are buying in as well. Lots going on behind the scenes I am sure. When cash comes in will that be a trigger ?
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