PGC - Licenced to Bank

[percy]

Huh, thanks for that percy. I just assumed that PGC were managing the loans. Is that what the 27 million P Note is for payment for the property in RECL?

I am sorry but I do not know what the P note is all about.I have posted before that I was surprised as I thought Marac owed PGC,but it was the other way round.

[percy]

So its all one big money go round then ... moving money from one shoebox to another shoebox that has got a bit empty and charge a fee for doing it as well .... sounds kosher .... haven't we recently heard all this before.

There was a story about this in the NBR a few weeks ago that suggested that George was the one who lent the money to EPIC and the writer than pointed out that George has almost put back the $18m he got paid for it back into it ..... so god only knows what is going on

Good fun.good story,just hope it is not right.!!!or if it is PGC are getting fees from him. These type of stories are what I think will make him not wanting a listed vehicle.Cannot see him wanting to answer your questions,Lizard's Scotty's ,mine and NBR's at an AGM. I had in mind each Torchlight fund would be set up for different purposes.ie No.25 may invest in Omaha property deal,while No.57 invests in bridging finnance on a Queenstown hotel.
so god knows what is going on. The way Kerr plays things close to his chest,I doubt it.!!!!

[winner69]

Hi ETC,

RECL - probably the most difficult. Best summary found so far is in the interim results presentation, where net assets are given at $61.8m.

This is based on a direct ownership interest in 175 individual properties valued at $63.1m, property finance receivables of $9.4m and external loans of $10.7m. Impairments from here are probably mostly limited to the few remaining finance receivables, so perhaps another $5m of impairments to come? Leaves value of the ex-Marac portfolio at $56.8m.

AND

However, on top of the distressed "bad bank" assets, they now also have responsibility under the management agreement to manage Marac ($142m?) of property finance receivables. For this, they receive $11m up front, but (as I understand it) Marac can claim back losses of up to $33m. If anything, I would rate this deal as a negative transaction overall for PGC, but, for starters, give it a zero.

Not really reading the Interim peoperly I now see the light of day - there are 2 parts to this part of RECL (I have split out and put an AND in your post Lizard) but who knows how much they will get back from the $61m in the books. You seem to think all but $5m Liz. The bad part they took on must be bad if they write off the capitalised interest last year

The other part is more intriguing. Has the $11m already been included in PGCs books which if so means they only get the $200k management fee each year whle exposed to fronting up to cover any further losses. As you say Lizard negative transaction here I think

Anyway clear as mud now - I think I understand

[Lizard]

The impaired interest comes from the property finance receivables and they only have $9.5m of those left (which is probably an NPV valuation including interest over life of loan and hence why interest is recorded then written off each year), as the rest have either been converted to cash or to a direct property ownership, hence why I say only $5m. The rest is properties which would hope had been valued at a fair, if not cheap, price. However, not clear what state the properties are in - could be some are unfinished developments (might explain the borrowings).

The $11m is somehow covered by a 5 yr, zero coupon bond - found somewhere in the notes.

[Lizard]

Huh, thanks for that percy. I just assumed that PGC were managing the loans. Is that what the 27 million P Note is for payment for the property in RECL?

Yes. Started out at $50m. They have been paying it down as they cash up the loans.

[Balance]

Anyway clear as mud now - I think I understand

That's how George likes it for now. Muddy so others cannot see but he can.

Things will become clear soon though.

[ETC]

Yes. Started out at $50m. They have been paying it down as they cash up the loans.

Thanks for that Lizard. I assumed that MARAC wouldn't just give PGC its "bad" property book, they'd have to pay for it.

Also thanks to everyone for participating. While the value of PGC still remains uncertain at least I now have a better understanding of the parts.

[corlemar]

I've been watching and reading the last cple of days posts with great interest.....and value the input you have all put in. I think the last two posts by Balance and ETC, sum it all up.

1) I agree with ETC, MARAC needed to offload the "bad" property book, to help it transition to BSH and ultimately they hope a banking licence. Whether it be GK or PGC or whoever pulling the strings, they wouldn't do it unless there was something in it for them $$$. As was the case when Torchlight (I think it was) helped SCF out, before they went into receivership, they would've been getting some nice fees from that, and only last week they were interested in taking the good stuff from SCF....

2) As Balance has says, it will all become clear soon enough, especially with the PGW completion and then the BSH distribution....Like most of the posts, it is hard to put a clear figure on what PGC is worth now and post consolidation/distribution. However, on numerous comments from management we keep hearing "providing and maximising shareholder value" ....IMHO i think they will endeavour to do that, especially given the capital raising that took place in 2009.

Hold onto your seats the next few months to year end will be interesting !

[winner69]

However, on numerous comments from management we keep hearing "providing and maximising shareholder value" ....IMHO i think they will endeavour to do that, especially given the capital raising that took place in 2009.

Hold onto your seats the next few months to year end will be interesting !

Good summary - yes the muddied waters are looking clearer

Interesting phrase "providing and maximising shareholder value" (what they are supposed to do anyway) but a phrase that is more commonly used these days by companies trying the make the best of a bad situation .... more like how do we recover some of the shareholder value we have lost over the years

Does suggest they are trying to do something so things shouldn't get any worse eh

[SCOTTY]

Any ideas as to what will happen to the unsold PGW shareholding?:

Distribute to PGC shareholders?
Sell on market?
Sit on them?
Is there a buyer allready lined up @ 60c?
Something else?