Alpha Pyrenees has provided an update on its situation as at the end of March 2016. The fund’s NAV has fallen again.
KEY POINTS
MATURITY OF BORROWINGS EXTENDED TO 31 OCTOBER 2016
- TRUST HAS THE SUPPORT OF ITS LENDER FOR AN ORDERLY REALISATION OF ITS REMAINING PROPERTY ASSETS
- SALES PROCESS WILL NOT RESULT IN ANY RETURN TO ORDINARY SHAREHOLDERS
- NAV IS NEGATIVE 35.7 PENCE PER SHARE AS AT 31 MARCH 2016 (31 DECEMBER 2015: NEGATIVE 30.9 PENCE PER SHARE)
The Trust currently owns a residual portfolio of three properties in France (located at Saint Cyr L’Ecole, Champs sur Marne and Ivry-sur-Seine) and three properties in Spain (located at Alcalá de Guadaíra, Écija and Zaragoza) totalling approximately 33,680 square metres (approximately 362,500 square feet) of commercial real estate. While the properties are generally well located they suffer from weak tenant demand at the present time coupled with a high level of vacancy.
These properties were last valued on 31 December 2015 at EUR29.0m (GBP22.9m at 31 March 2016 exchange rate). The next independent revaluation will take place as at 30 June 2016.
As at 31 March 2016 the NAV is negative 35.7 pence per share. The decrease in NAV from 31 December 2015 (negative 30.9 pence per share) is due to the combined effect of the loss incurred in the period (mainly finance costs and property disposals) and adverse foreign exchange effects.
It was announced on 15 April 2016 that the Trust’s loan facilities with Barclays Bank PLC (“Barclays”) have been extended and the maturity date of all its borrowings has been extended to 31 October 2016.
Following the completion of a further three property sales in February 2016, which generated sale proceeds of GBP18.4 million (EUR24.3 million), a net repayment of borrowings of GBP17.6 million (EUR23.3 million) was made. As at 31 March 2016, the Trust had total borrowings of GBP79.3 million (EUR100.3 million) under its facilities with Barclays. After the end of the quarter, a further GBP9.2 million (EUR11.7 million) of debt repayment was made and total borrowings currently stand at GBP70.6 million (EUR89.3 million), including rolled up interest of GBP0.5 million (EUR0.7 million).
The current interest rates will continue to apply to the facilities during the extension period and the 2% arrangement fees (per annum pro-rated), charged on all borrowings from 10 February 2015, are deferred to the new maturity date and will be payable to the extent that the Trust has sufficient cash funds at that time. No additional fee was charged on the latest extension.
As previously reported, on 3 February 2016 the Trust sold its properties located at Athis Mons, Aubergenville and Aubervilliers in France, totalling approximately 59,730 square metres, for EUR24.3 million and the sales proceeds were used to reduce the Trust’s bank borrowings.
The Trust has the support of its lender for an orderly realisation of its remaining property assets which are being actively marketed. As previously stated, the Board is of the view that there will not be any value to return to ordinary shareholders after repayment of the Trust’s bank borrowings has taken place to the extent possible. The Trust will provide further updates in due course.
Subsequent to the significant progress in the sales programme following the transactions completed over the past quarter, and the now much reduced property portfolio, the Board has considered the composition of the Board in terms of size and cost to manage the completion of the sales process. As a result of this David Rowlinson, Phillip Rose and Dick Kingston have resigned from the Board with immediate effect. David Jeffreys and Serena Tremlett, who have been with the Company since inception, will continue as Directors and the Board will take responsibility going forward for matters previously dealt with by its sub-committees. The Board would like to take this opportunity to thank David, Dick and Phillip for their service to the Trust.
ALPH : Alpha Pyrenees NAV falls further into the red