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QuotedData’s morning briefing 10 July 2023

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In QuotedData’s morning briefing 10 July 2023:

  • Castelnau Group (CGL) has announced that it has purchased a 25% stake in Warlord Games, a historical table top wargame maker, through one of its portfolio companies, Hornby Hobbies. The transaction was made for £1.25m in cash. CGL has the option to become the majority shareholder in Warlord in two years, while also giving the founding shareholders a path to a full exit under a clear, pre-agreed framework should they wish to do so.
  • US Solar Fund (USF) has announced that it has reached a financial close on the sale of its 50% interest in Mount Signal 2. Part of these proceeds will be used to buy back USF shares. USF’s board has also announced the results of its strategic review, initiated in October 2022. Given the current market backdrop it has been decided that it is not conducive to a sale of the company or its assets. In a mutual agreement between the board and USF’s current investment manager, New Energy Solar Manager, the current management agreement will not extend beyond the initial five year term, ending April 2024. The board is currently in the process of finding a replacement investment manager, and expects to find one within a short timeframe.
  • RM Infrastructure Income (RMII) has provided an update on the review of its company strategy, initiated on 23 May 2023. The consulted shareholders were supportive of RMII’s management and performance. However they did highlight the trust’s small scale, and the issues it has caused for liquidity and its ability to grow. There has been limited progress with respect to merging RMII’s assets with another trust’s. RMII has received an indicative, non-binding offer on 23 May 2023, however the board is yet to receive any further detail. The board is also considering a very early stage proposal from another party. However the board highlights that currently none of these approaches anticipate any offer for the company, recommended or otherwise, under the City Code on Takeovers and Mergers. The board expects further proposals to be made as to how to reconcile the issues around RMII’s size and the discount it trades on.
  • Great Portland Estates (GPE) has completed the leasing at the 75,300 sq ft The Hickman office building on Whitechapel Road, E1, after letting the last remaining office space to digital transformation company TPXimpact. The company will occupy 6,757 sq ft on the second floor on a fitted basis with a five-year lease, with an option to break at year three. Recent lettings in the building also include New Look, which will occupy the offices on the third and fourth floors (23,242 sq ft) on a 10-year lease with an option to break at year seven, and Goodlord, which after moving from a nearby location now occupy the remainder of the second floor (4,638 sq ft) on a 37-month term. Other occupiers of the building are Runway East and Four.
  • The PRS REIT (PRSR) has completed the refinancing of its £150m revolving credit facility (RCF) with RBS and Lloyds Banking Group. The RCF had been originally due to mature in February 2023 and was extended to mid-July 2023 (with an option to extend until October 2023). A new £102m facility of fixed-rate debt for 15 years has been secured with Legal & General Investment Management, together with a further £75m of floating-rate debt agreed for two years with RBS. An interest rate cap will be put in place on the floating rate debt to hedge against downside risk on further interest rate movements. The company did not disclose the interest rates agreed on the new facilities. The investment manager will immediately deploy almost two-thirds (£115m) of the total debt, specifically the entire £102m fixed-rate facility and £13m of the floating-rate facility, to fund already completed and stabilised sites. The balance of £62m of floating-rate debt is expected to be drawn down to fund sites completing and stabilising before calendar year 2024. As a result of the refinancing, PRS REIT now has total fixed long-term debt facilities of £352m, with an average blended interest rate of 3.8%. This compares with the average net initial valuation yield of 4.3% as at 31 December 2022. Around 82% of the company’s overall debt is now covered by long-term facilities, which have an average term of 16 years. This compared to 63% of overall debt previously covered by long term facilities, with an average term of 17 years. The average term for all debt has increased to 13.7 years at 30 June 2023, from 10.9 years at 31 December 2022.

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