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CIT rejects MI REIT's recapitalisation plan
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upnowhere
Senior |
13-Apr-2010 10:39
Yells: "Just want to earn a bit pocket $$$" |
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Nowaday u can see cambrigde everywhere.. from tuas to hill view.. hope this is a good counter.. cheong ahh | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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commando
Veteran |
06-Apr-2010 22:29
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result on 21 April. Hope is good | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Hulumas
Supreme |
24-Mar-2010 14:23
Yells: "INVEST but not TRADE please!" |
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SELL then!
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pharoah88
Supreme |
24-Mar-2010 13:32
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Why nO NAV? Why nO Earnings?
*Technical Analysis Information is updated Daily
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Quantico
Member |
24-Mar-2010 13:26
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Wondering how you get 100 times? Lowest price in Mar 09 is 22 cents. Price now is 46 cents.
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sureesh40
Senior |
24-Mar-2010 12:56
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But jason, where can you find a reit that has both low gearing as well as low PB and gives good distribution at the same time. I think when it comes to reit investing going forewards, one has to leverage on a sustained economic recovery scenario to safeguard cash flows.
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jasontaycs
Member |
24-Mar-2010 08:48
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Vested in CIT since mid 2009. High yield now but wary of potential dilution from a possible rights issue as it has 42% gearing which is highest of all S-Reits. There are safer long term dividend counters - look at low gearing for sustainable dividend yield and combine that with low PB for potential capital appreciation. See http://reitdata.com/
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KiLrOy
Master |
23-Mar-2010 23:24
Yells: "I buy only what I can see." |
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If you are a high dividend yield fan and very interested in ReIT, this one is good. From MAR 2009 until the price has appreciated approx 100 times ~ Caveat Emptor***** | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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upnowhere
Senior |
23-Mar-2010 22:25
Yells: "Just want to earn a bit pocket $$$" |
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Hi investors, is this counter can be invest with long-term? | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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pharoah88
Supreme |
01-Feb-2010 12:30
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What were 2009's low and HIGH? | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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commando
Veteran |
31-Jan-2010 01:12
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the AIM saga didn't lower itd DPU distribution. So any advice for this share? mapletree better? |
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pharoah88
Supreme |
27-Jan-2010 14:56
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What is the Target Entry Price? | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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unique6
Member |
04-Jan-2010 14:52
Yells: "Good time no bad stocks. Bad times no good stock? " |
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Hi All, I think this share will come down a fair bit as they lost a lot of money in its recent investments in AIMS reit. Wait for more data! Will affect its dividend payouts... Wait for weakness.. Good Luck to all. |
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aircraft
Veteran |
04-Jan-2010 09:22
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Hi All, I heard CIT's Dividend Reinvestment Plan is to commence from 1QFY10 to reduce gearing. will this greatly affect the dividend payouts? Thanks |
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katak88
Senior |
29-Nov-2009 03:17
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Business Times - 28 Nov 2009 Reit managers need to grasp regulator's position Muted investor response to MI-Reit proposal indicates restructuring needs to be communicated transparently By CHEW XIANG THOSE seeking to handle mergers and acquisitions of real estate investment trusts (Reits) will have to develop a better understanding of the regulator's position, OCBC Investment Research said in a report this week. Earlier this month, the manager of Cambridge Industrial Trust failed to take control of a competing Reit, MacArthurCook Industrial Reit (MI-Reit), after the Monetary Authority of Singapore (MAS) stepped in due to potential conflicts of interest. Appendix 2 of MAS's Code on Collective Investment Schemes sets out the responsibilities of property funds, and it is understood that this was the basis for MAS's decision. OCBC analyst Meenal Kumar said that control of most Reits changes hands at manager level, and this was the first time that control was also contested at unit-holder level. According to Ms Kumar, muted investor response to the original MI-Reit proposal also indicates that attempts to restructure Reits through dilutive cash calls and acquisitions of sponsor-owned assets, however necessary, need to be communicated to the market more transparently. MI-Reit finally succeeded - by margins of just a few percentage points in some cases - in pushing through a restructuring plan on Monday under which it will issue new units to investors including AMP Capital as a co-sponsor, present sponsor AIMS Financial Group and other cornerstone investors, followed by a rights issue and a new debt facility. But unit-holders said that the exercise severely diluted their holdings. CIT's manager led a week-long campaign to oust MI-Reit's manager and install itself instead, but the attempt was blocked by the authorities. 'To be fair, we could see where CIT was coming from (at least on the surface),' Min Chow Sai said in a Nomura report released on Wednesday. 'Prior to the recapitalisation announcement, MI-Reit was trading at a 56.4 per cent discount to its book value, which would have been the valuation at which CIT's $10.3 million investment was made. 'If CIT's management had succeeded in taking over as MI-Reit's manager, it could have potentially unlocked the value of MI-Reit's portfolio at a narrower discount to book. The investment, which we view as somewhat opportunistic, did not work out as planned. 'There now appears little CIT can do besides subscribing for its pro rata rights to prevent further dilution. This means the bulk of CIT's July placement proceeds will now be invested in MI-Reit, instead of de-leveraging its own portfolio.' Nomura said that allowing for the proposed additions to MI-Reit's portfolio and higher refinancing costs, 'we estimate MI-Reit will add about 0.4 cent per unit to CIT's distribution per unit for forecast FY 2010'. 'Our numbers suggest the MI-Reit investment adds 0.5 cent per unit to CIT's value, which is more than offset by a 1.3 cent per unit increase in net debt and 0.7 cent per unit dilution from potential equity raising,' it said. |
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katak88
Senior |
26-Nov-2009 22:47
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Business Times - 25 Nov 2009 MI-Reit moves ahead with its plans Its strategy will involve leaning on cornerstone investors By MICHELLE QUAH WITH the dust finally settling after the tumultuous past few weeks, the folks behind MacarthurCook Industrial Reit (MI-Reit) are understandably keen to leave the past behind them. But, perhaps of greater interest to its unitholders are the plans that its managers have for the trust, which they shared with The Business Times yesterday. 'I think it's important that we draw a line across what has happened and leave the past behind us,' said Nicholas McGrath, CEO of MI-Reit's manager, referring to the very public spat that it had with rival and substantial shareholder, Cambridge Industrial Reit (CIT). 'What we need to do now is look ahead and focus on our future plans. I believe we have a very strong platform for growth, thanks to our sponsors, as well as great intellectual capital and Reit management expertise from them, and now, a strong balance sheet,' he said. Mr McGrath's first job would be to pay off the debt accumulated as a result of decisions undertaken by the previous management - namely, the $226 million in loans and the $90 million obligation to buy a property, for which MI-Reit had to recently mount a highly controversial refinancing plan. This refinancing plan was heavily criticised by CIT, which had bought a near 10 per cent stake in MI-Reit after the latter announced plans to raise $217 million from a placement to cornerstone investors and $215 million from a rights issue. CIT said that the recapitalisation exercise destroyed value for unitholders as the discount to net asset value was too steep - and proposed itself as manager of MI-Reit. What followed was a weeks-long slugging match that saw both sides take out advertisements in the newspapers to defend their positions. Eventually, CIT's bid to take control of MI-Reit was blocked by the Monetary Authority of Singapore (MAS), and CIT's chief, Chris Calvert, was forced to backtrack on what he had said. But disgruntled MI-Reit unitholders, already stirred up by the debate that had gone on before, continued to take MI-Reit's managers to task at Monday's extraordinary general meeting to vote on the refinancing plan. While the plan was voted through at the meeting, Mr McGrath recognises that the issue is not entirely resolved - and will need to be dealt with, along with his other plans for the Reit. 'There will have to be lots of communication with our investors, both retail and institutional, over the next 12 months. We will maintain a very transparent and open environment,' he said. Desmond Ong, managing partner of Eversheds Singapore and adviser to the MI-Reit board, noted: 'The board is determined to repay the faith shown in them by the majority of the unitholders after the events of last week.' Mr McGrath believed that the Reit will have a better story to tell. Once its existing debt is cleared off its books, by the end of the year, MI-Reit will be left with a stronger capital position - with 29 per cent leverage. Greg Bundy, deputy chairman of AIMS, added: 'That will also coincide with a re-rating of property assets, when the economy recovers. Nicholas has been conservative in rating MI-Reit's assets - booking a 16 per cent decrease in property values when others like CIT have gone with 10 per cent and Mapletree Logistics with 5 per cent. So, MI-Reit should benefit nicely when property assets appreciate.' Mr McGrath said that he intends to pursue a 'prudent capital management plan' which includes keeping the trust's leverage at between 29 and 35 per cent, and ensuring that it only invests in assets that will boost its yield. 'I will guard the distribution (to investors) with my life,' he told BT yesterday. Part of that valiant strategy will involve leaning heavily on the Reit's cornerstone investors, AMP Capital Holdings and present sponsor AIMS Financial Group. MI-Reit intends to capitalise on their connections to boost its yields. Mr McGrath shared that AMP has a warehouse facility which MI-Reit could soon add to its portfolio. While AIMS, an Australian company focusing on funds management, investment banking and real estate investment, has a very strong relationship with Singapore's United Engineers Limited - whose biggest asset is its UE Tech Park warehouse - which MI-Reit could benefit from. 'We have a very good pipeline of assets in Singapore; we could easily do $200 million worth of transactions in the next year,' Mr McGrath said. He also shared that AIMS would be able to take MI-Reit beyond Singapore - to Vietnam and China. AIMS executive chairman George Wang, who now personally owns 40 million shares in MI-Reit, told BT: 'MI-Reit cannot just buy assets in Singapore. It has to look at growth potential beyond that. And I believe China is the future, with its booming economic growth and massive logistics and manufacturing potential.' Mr Wang said that he looked to the example of market leaders such as CapitaLand, which have recognised China's potential. 'During my next two years as chairman of MI-Reit, I intend to bring my resources and contacts to the table, and help the trust's management to understand the Chinese market. I will introduce my connections to them and help them to understand the Chinese system, the Chinese people and the sort of risks and investments they can undertake.' Mr Wang, who was born in Hainan, works very closely with China's Tianjin government - a region which sees 15 per cent annual growth. 'Tianjin is the next Shanghai. Many large companies have set up there - Samsung, Motorola - and it has a lot of potential for growth,' he said, adding that he intends to position MI-Reit to tap on that growth. He said that he intends to hire more locals - more Singaporeans for MI-Reit's presence in Singapore, and mainland Chinese for its future expansion into China - including for senior positions. 'I believe that if you want to do business in Asia, you need to have people who understand Asia.' 'When I step down as chairman in two years' time, there will be a difference in MI-Reit. I intend to work very hard for shareholders,' Mr Wang said.
Business Times - 23 Nov 2009 EGM WATCH MI-Reit unitholders left with one hard option CIT looks even poorer, having bet on an unwinnable gamble By CHEW XIANG NOBODY looks pretty after a fight. Two Reit managers, Cambridge Industrial Trust Management (CITM) and MacArthurCook Investment Managers (MIM), have been battling for control of MacArthurCook Industrial Reit ahead of its crucial extraordinary general meeting today. On Friday, CITM's bid was scuppered by the Monetary Authority of Singapore - due to potential conflicts of interest - so it seems that MIM, MI-Reit's present manager, has won. Its controversial plan to recapitalise the Reit will probably get passed today. Unitholders have no other options now that CITM is out of the picture. Indeed, MI-Reit's unit price fell almost 9 per cent on the news. The Reit's price had been supported this past week by the hope that CITM had a viable alternative. That's because the refinancing plan is heavily stacked in favour of a group of new investors. AMP Capital Holdings, present sponsor AIMS Financial Group and other 'cornerstone' investors, would be getting 221 million new units at 28 cents a unit. That's 83 per cent of existing units outstanding priced at 70 per cent off net asset value, 24 per cent off Friday's closing price, and about 32 per cent from its traded price before the announcement. A two-for-one rights issue at 15.9 cents apiece will also follow the placement. By any measure, that's a lot of wealth destroyed. How much exactly? If unitholders take up their rights entitlement, in return for only halving their stake they'll be paying 31.8 cents for every unit they now hold. In terms of distribution, they could lose one fifth of their annual yield, according to BT calculations. Not subscribing to the rights issue could cost them 75 per cent of their present annual distribution, and 80 per cent of their stakes. No wonder existing unitholders are up in arms. MIM's chief executive Nicholas McGrath says the discounts were necessary to raise the cash it needed - $217 million from the placement and a subsequent two-for-one rights issue plus another $215 million in loans. The Reit desperately needs emergency funds to pay off $226 million in loans and $90 million to buy a property and would have to be liquidated if the plan was rejected, Mr McGrath said. It has already survived two close encounters with death. Unitholders, pointing to its net asset value of 94 cents a unit, say that's not such a bad thing, really. But MIM says its $490 million portfolio would not have fetched anything close to NAV in a firesale. Is that true? Unitholders are suspicious and blame MIM's mismanagement, grumbling that if the Reit survives, it will continue to reap management fees. We'll never know; perhaps to support its case MIM could have hired independent consultants to estimate a break-up value. But it is too late now. MIM's plan is the worst available; it is also the only one available. The new investors had the bargaining power and they have used it well for their own benefit. CIT, if anything, comes off looking even poorer. Its appearance on the scene on Monday saw a spike in MI-Reit's unit price. Then, it was hinting at a merger - it said its analysis valued MI-Reit at about 47.9 cents, or 1.1 CIT units, comfortably above the then market price. It also released documents suggesting that a takeover offer for MI-Reit was under serious discussion. Chris Calvert, its CEO, told reporters that consolidation of the two Reits was an option. If not a merger outright, then having it as a manager of both Reits would mean cost savings, while MI-Reit could for a time live off CIT's debt facilities. Investors bought the story. CIT soon had to backtrack. That bit about consolidation - that was just 'misinterpretation'. It was quickly forced to state openly that it would not launch an offer for MI-Reit. And on Friday, no doubt under pressure from the authorities, it had to make the humiliating admission that it couldn't take over as manager and that it otherwise had no feasible plans for the rescue of MI-Reit. And the worst of it was, it was totally unnecessary. CIT only bought its close to 10 per cent stake the previous week, after announcement of the share placement. It could have quietly sat out the whole saga with no loss. The fact is, CIT has now spent $10.3 million of its unitholders' cash on a gamble we now know it could never have won (and likely thousands more on professional fees and attack advertisements). Its own unitholders have started grumbling - that money, over a third of the $28 million raised in a recent private placement, was for asset enhancement and working capital, not a speculative venture that was at best, ill-advised. At worst? Your conspiracy theory is as good as mine. |
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stevento
Senior |
26-Nov-2009 21:07
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I think it is to short MIREIT. As for Cambridge, I believe you can slowly accumulate for next year when they need to recap. Their Leverage is still high. So it is a good opportunity for investors as they recap. I guess it may be a rights issue. |
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soularis
Member |
26-Nov-2009 12:05
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short which one? MI or CIT? | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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nickyng
Supreme |
26-Nov-2009 08:36
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just short on 3 Dec lah!! u wont regret !! :D | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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stedeguy
Member |
25-Nov-2009 22:42
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In theory, that is valid, however, I doubt the price of the main share will remain at 21cts come closer to 3 Dec. I feel that there is always a sense of irritational exuburence in buying/dumping right after an XD or XR. This was true of a few rights issue that I have observed so far. Little movement until 1 or 2 days before the rights trading. However, it must be said that their corporate situation is not as dire/desperate as MI-Reit. Let's wait and see. I also believe that CIT will exercise the rights and wait out for price revival.
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