Irongate Property seems on the track foe survival
Irongate Property paid interest on its bonds (STL030) yesterday. It sold a building in Palmerston North in October, and buying back 6 out 10 shares in its subsidary (SJBPF) to distribute $17 million is being voted. It seems that the company can survive for a while. If so its bonds could be worth more than its current market price (ca 60 c for $1 bond).
Any different views or information?
Irongate Property got $10 m
http://www.stlaurence.co.nz/news.php?news=149
St John Board Announces Approval of Share Buy Back Offer
17th November 2010
St John Balanced Property Fund Limited (St John, the “Company”) has announced today that at the meeting of Shareholders held in Auckland on 15 November, the special resolution to approve the Company’s offer to acquire up to six shares in the Company for every ten shares held, on a pro rata basis, was passed by 99.84 per cent of the voting shares.
The offer follows the recent sale of St John’s Bunnings property in Manukau, Auckland which resulted in St John having cash reserves of approximately $17 million.
St John Chairman Kevin Podmore says, “This offer represented an opportunity for St John Shareholders to realise some of the shares they were issued by the Company in July last year when their mortgage bonds were converted to shares. The buy back price of $1.75 per share is the same price as the conversion ratio used at that time.”
8,590,020 shares were repurchased under the offer and have been immediately cancelled. Consequently the Company now has 7,182,781 shares on issue.
Following the repurchase majority shareholder Irongate Property Limited’s holding has reduced from 59.49 per cent to 52.25 per cent.
Payment of interest on STL030 bonds
The announcement of interest payment this morning suggests that Irongate Property can survive for a while. Sale of its Walton Plaza building (ca$12.5m) in Whangarei has been settled. Giving that no debt needs to be paid before May 15, when the STL030 bonds (about $45m) mature, bondholders can be reasonably optimistic that they have a good chance to get money back.
The bonds last traded at 72.5 cents, much better than the 55 cents a few weeks ago.