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Battersea Power Station owner reports dismal figures

Real Estate Opportunities ’s shares plummeted 40% this morning after it revealed that its debts were £722m more than its assets.

The London-listed company revealed a net deficit of 178p a share at 28 February, compared with a net asset value of 104p a share at the end of 2008.

In that 14-month period it made a pre-tax loss of nearly £1bn and now plans to demerger its Battersea Power Station site as a separate vehicle in a bid to restructure .

The company, which is 67% owned by Ireland’s Treasury Holdings, said in its results for the 14 months to 28 February 2010 that its loss before tax was £929m.

It said the loss reflected a “significant negative revaluation in the group’s Irish portfolio” which has led to an overall £811m fall in the value of its portfolio and a £40m impairment of its listed investment in China Real Estate Opportunities (CREO).

REO’s loss after tax was also significant at £828m equating to a loss per share of 248.2p. This compares to a loss after tax of £367m in 2008 and a loss per share of 107.8p.

As part of plans to reorganise the debt-laden company REO said that board had resolved to “separate the Battersea Power Station project from the remainder of the REO portfolio into a new separately listed vehicle, subject to negotiations with relevant stakeholders”.

It plans to launch a roadshow to attract a long-term equity partner into the station project ahead of an expected successful planning application process. It said it hoped to list the project before the end of the year.

The station was valued at £388m which REO said showed a 4% reduction since its £406m valuation in 31 December 2008. REO said the station’s value had actually increased by 6% since June last year when it was valued at £365m.

REO said it had also secured new lending terms on the Battersea Power Station loan facility, subject to completion of legal documentation.

The company, which is chaired by Ray Horney, said that its financial performance had been affected by the “unprecedented conditions” in the UK and Ireland.

Its total portfolio was valued at £1.1bn,which had reduced in value by 43% in the 14 month reporting period. There has been a 32% valuation fall since June 2009.

REO’s property income for the 14 months reporting period was £44m. It has a cash balance of £39m at the year end which it said has since been boosted by £28m from sale of shares in CREO in March 2010.

Horney said: “It has been an exceptionally challenging period for the company, as unprecedented conditions in the UK and Ireland impacted real estate valuations, and credit and liquidity remained very limited. However, the company has worked hard and is confident that it will be able to strengthen

the balance sheet as we initiate discussions with certain key holders of loan instruments and continue to deliver a robust operational performance in the investment portfolio.

“The board has also resolved to pursue a demerger of Battersea Power Station into a separate listed vehicle in time to coincide with the introduction of a new investor in the project. Whilst uncertainty remains

with regard to the economic outlook, the board remains confident that the quality of the company’s portfolio and the experience and commitment of management will ensure the company is on a solid footing as markets recover.”

http://www.propertyweek.com/5001524.article?origin=PWbreakingnews

Theres hope yet

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Battersea Power Station owner reports dismal figures

http://www.propertyweek.com/5001524.article?origin=PWbreakingnews

Theres hope yet

Real Estate Opportunities ’s shares plummeted 40% this morning after it revealed that its debts were £722m more than its assets.

:lol:

And the shares dropped only 40% ? ! :blink: How come ? ! The company is worth less than nothing! (£722 million less than nothing, to be precise) :P

Good post BB. Cheers. :)

.

Edited by Tired of Waiting

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40% of private renters in London are on Housing Benefit and Housing Benefit was just cut by up to 80%, but the valuation of their largely residential development in Battersea has increased in value over the past year?

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And the shares dropped only 40% ? ! :blink: How come ? ! The company is worth less than nothing! (£722 less than nothing, to be precise) :P

Good post BB. Cheers. :)

When the market charges such a premium to own less than nothing, then you know the fashion isn't dead yet. <_<

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  • 140 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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