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Re: Re: [sharechat] TTP - Opportunity


From: "Gary Rountree" <gary.rountree@xtra.co.nz>
Date: Thu, 17 May 2001 11:31:40 +1200


Andrew,

    Interesting table. I guess to vote for or against possibly depends on whether you want a quick short term gain or a longer term view (how long before a recovery?) which may be more rewarding.

I agree with your comment that there is not much interest in the stock, sometimes the best opportunities are the ones that have been overlooked.

 

 

 

Re: [sharechat] TTP - Opportunity



  • Subject: Re: [sharechat] TTP - Opportunity
  • From: "Andrew Smith" <smith5@free.net.nz>
  • Date: Thu, 17 May 2001 09:52:59 +1200


I don't think there is much interest in this share from the lack of discussion. An extract from Appendix 1 from the investment statement from TTP dated 26th April shows the prem/Disc to NTA as
 
Trans Tasman      (68.6%)
AMP NZ Office Trust    (4.3%)
Kiwi Income Property Trust      (13.9%)
Property for industry   12.8%
Colonial First State Prop Trust   4.0%
Capital Properties NZ  (2.4%)
Calan Healthcare Properties Trust (27.3%)
National Properties trust (16.3%)
Average as     (6.2%)
 
The interesting thing is the dept/TTA for TTP is 45.5% where the worse is Capital properties at 66.5%. and yet Cap Prop is trading at a premium of 12.8%. The reason the share price is so low is that TTP has suspended dividends due to the paper losses of writing down the portfolio value. I for one am not prepared to give it to SEA. Have you noticed they have not been complaining about the lack of dividend and yet they own over 50%.
I have voted NO to the bond conversion and NO to the re-election of the directors.
Valuations will stop going down as the cost of new buildings rise. Dividends will be introduced and the share price will rise. The report said from memory 3 years. I think this is shyt.
 
Disclosure Hold TTP
 
Andrew
----- Original Message -----
Sent: Wednesday, May 16, 2001 8:19 PM
Subject: [sharechat] TTP - Opportunity

IMO you should vote for the proposal.

Current price of 23c may be way below the asset valuation of 40-70c depending on which valaution methods are used, however one cannot dispute the fact that TTP have been trading up until the proposal around 16c and not paying dividends, in a company that has a perceived tarnished image and in an unfashionable sector.

At the current price of 23c , take the bond which has a face value of 10%, in a climate of falling interest rates that is fairly healthy yield. If the market values the bonds at the face value of 35c - 10% yield (assuming the shareholders accept the proposal) then one could expect an immediate gain around 12c (35c-23c) a gain of 52.2%! 

If the market does not value the bonds in line with current interest rates, then you can take a long term view and "only" take an average gain of 20.4% pa on your fixed interest investment for the next 10 years! (12c/23c = 52.2%/10yrs = 5.2% pa (capital gain)   plus 35c/23c x 10% = 15.2% (interest yield) - you would need to work hard to beat that!

The revenue stream and balance sheet of TTP can handle this proposal without a problem.

The scheme, basically unlocks all the value that exists (like in a number of listed NZSE companies (ala Rubcom,GPG to name but few) and shares the value between ordinary shareholders and SEA. If SEA do alright out of it than good luck to them. To those that argue that the offer is unfair because the property cycle is at a low, then where are they out there buying property. For those long term investors who are sitting on large book losses from years ago , get over the fact that you lost money - what happens going forward is most relevant

 

 

Anyone else got an opinion?

 

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