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Countrywide turns to equity raising after bond failure

https://www.ft.com/content/cc14da46-94a2-11e8-b747-fb1e803ee64e

Jist - Tried to sell 5y bonds @ 8% earlier in the year. Failed. Investors wanted 9%

Trying to get cash on the balance sheet - being screwed by cost of credit facility.

Debt of 200m. Market cap of 120m.

'constructive dialogue with shareholders and banks ....'

Emergency equity raising next ....

 

 

 

 

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1 hour ago, spyguy said:

Tried to sell 5y bonds @ 8% earlier in the year. Failed. Investors wanted 9%

Why did they only want 9%? Lending money to a company already in debt and zero prospect of profitability anytime next decade.  Surely 9% seems too little for the risk involved.

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44 minutes ago, Funn3r said:

Why did they only want 9%? Lending money to a company already in debt and zero prospect of profitability anytime next decade.  Surely 9% seems too little for the risk involved.

Probably a negotiating/pricing strategy.

 

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3 hours ago, spyguy said:

Countrywide turns to equity raising after bond failure

https://www.ft.com/content/cc14da46-94a2-11e8-b747-fb1e803ee64e

Jist - Tried to sell 5y bonds @ 8% earlier in the year. Failed. Investors wanted 9%

Trying to get cash on the balance sheet - being screwed by cost of credit facility.

Debt of 200m. Market cap of 120m.

'constructive dialogue with shareholders and banks ....'

Emergency equity raising next ....

 

 

 

 

How much were they looking to raise ? 

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8 hours ago, spyguy said:

250m.

 

The only value in that Group now is likely the mortgage broker business. I'd expect them to flog that and try and buy some time but realistically they're in hot water. About time they started impairing the Investments in Subsidiaries on their BS (worth FA in that type of business anyway). They do that and what are they left with?

About £35m in net assets. 

Coincidentally that's not far off what they paid out last year (2016) in dividends (£32.8m). They paid £nil in 2017.

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23 hours ago, spyguy said:

Countrywide turns to equity raising after bond failure

https://www.ft.com/content/cc14da46-94a2-11e8-b747-fb1e803ee64e

Jist - Tried to sell 5y bonds @ 8% earlier in the year. Failed. Investors wanted 9%

Trying to get cash on the balance sheet - being screwed by cost of credit facility.

Debt of 200m. Market cap of 120m.

'constructive dialogue with shareholders and banks ....'

Emergency equity raising next ....

 

 

 

 

Shame it could not be shorted.

 

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16 minutes ago, warrior88 said:

Agreed happy days but don't expect interest rate to rise sadly.

Then I think you should be betting on a hold - the betting exchanges are predicting a rise apparently.

Re countrywide:  share chat is full of fury - small investors unable to get sell or buy quotes while the big boys piled in at 10p and out at 20p.  I've been in this situation myself and it stinks.
Institutional investors being given preferential access to the markets when things are moving fast is a form of legalised corruption - isn't it?

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5 minutes ago, hotblack42 said:

Then I think you should be betting on a hold - the betting exchanges are predicting a rise apparently.

Re countrywide:  share chat is full of fury - small investors unable to get sell or buy quotes while the big boys piled in at 10p and out at 20p.  I've been in this situation myself and it stinks.
Institutional investors being given preferential access to the markets when things are moving fast is a form of legalised corruption - isn't it?

I doubt ay large investors have touched CW for a while.

The shares will be traded by bulletin board idiots.

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2 minutes ago, spyguy said:

The shares will be traded by bulletin board idiots.

Said idiots are screaming blue murder at the spread - so I should have been more precise - 'idiot' small investors only saw high buy / low sell prices at the open, while some other mystery buyers (I can't see who obviously) filled their boots at 10p and flipped for c. 20p minutes later.  As a small investor myself I feel entitled to have the same ability to make killings as the biggest participants, even if I don't actually use it, and hate the fact that the wealthy take almost all the pie whenever these flash events occur.
But hey ho, let's not forget the good news.  A MASSIVE EA is going down the crapper.

Good.

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47 minutes ago, hotblack42 said:

Said idiots are screaming blue murder at the spread - so I should have been more precise - 'idiot' small investors only saw high buy / low sell prices at the open, while some other mystery buyers (I can't see who obviously) filled their boots at 10p and flipped for c. 20p minutes later.  As a small investor myself I feel entitled to have the same ability to make killings as the biggest participants, even if I don't actually use it, and hate the fact that the wealthy take almost all the pie whenever these flash events occur.
But hey ho, let's not forget the good news.  A MASSIVE EA is going down the crapper.

Good.

I would be more interested to see - if this can trigger caution in all other listed business in UK. Some of them are massively over-valued if one is to believe property market is heading for a correction.

Foxtons

Purplebricks

Berkeley

Right move 

Etc.

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1 hour ago, warrior88 said:

I would be more interested to see - if this can trigger caution in all other listed business in UK. Some of them are massively over-valued if one is to believe property market is heading for a correction.

Foxtons

Purplebricks

Berkeley

Right move 

Etc.

The likes of RM are not really affected by over priced properties.

They get their money from people trying to sell houses, not when he house sells.

The likes of RM are sittign pretty as EAs 'de-brickify'

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NEWSFLASH: Countrywide bosses confident and happy about the future

http://stopthepress.propertyindustryeye.com/eye-newsflash-countrywide-bosses-confident-and-happy-about-the-future/index.html

In an exclusive interview with EYE, Countrywide executive chairman Peter Long has said he is happy and confident about Countrywide’s turnaround.

He said that the collapse today in the share price had been expected: “It was also going to be reset,” he said, “because we are at the start of a new capital structure.”

He emphasised that the £140m fund raise is fully underwritten by both existing and new shareholders, meaning that a meeting of shareholders will only need to rubber-stamp it for the money to become available.

Long said: “It is a massive vote of confidence, and we have raised more than we expected. It is a bigger show of support than we could have envisaged. I am extremely happy with that.”

He made it clear that Paul Creffield, the new group managing director, will be in charge of the turnaround, and that there will be no search for a new CEO.

Long, who is also chairman of Royal Mail, denied that he is “over-boarded”. He said: “My role is very simple. I am available to my business leaders 24/7. I do sometimes work seven days a week.”

Long also said that there would be no sell-off of any parts or brands of Countrywide. He said: “The plan is to build the business back to where it was in 2016.”

He said that Countrywide was an estate agency business, and not retail – “That is the biggest load of nonsense you ever heard,” he said.

Asked if the Alison Platt regime had been disastrous, Long said: “I do not argue with that.”

Paul Creffield told EYE during the same joint interview that he was “absolutely passionate” about restoring Countrywide’s fortunes.

He said: “This is a people business – and by that I mean our own people, and our customers.”

He said that a large number of talented people who had left during the Platt regime were now back, plus talented new recruits.

Creffield also said there are no plans to launch an online business. He said that if Countrywide did, in the longer term, it would an investment in a completely separate business and not an online offering in the branches: “I never could get my head around that,” he said.

However, there will be new investment in IT which will go into the branches, making it easier for customers to track transactions and to book viewings.

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2 hours ago, warrior88 said:

Right move 

They'll be fine. As mentioned they make the majority of their money through property listings and the total number is increasing MoM at the moment. It's still the number 1 property website and always will be.

On a side note, I think they need to invest heavily in their website though and I'd expect a redesign soon, it's using some quite archaic (and out of favour) technologies.

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