Macau Property Opportunities (MPO), the £34m real estate fund trying to complete a lengthy wind-up in the China region’s prolonged slowdown, is considering an emergency share issue to resolve a cash flow crisis. The company, which in August reported a 23.5% slump in net asset value in the three months to 30 June, said the positions of its lenders had “noticeably hardened” as property valuations declined and it “continues to strictly and carefully manage its working capital position to meet obligations both to its lending partners and its service providers”. MPO shares have plunged 77% in the past five years, reducing the company’s market value to £10m. They slipped 4% to 15.5p this morning.
“How does a company that has been in managed wind down for as long as Macau Property Opportunities has get itself into a mess with loan covenants? If I was a shareholder, I would want to see heads roll for this,” said James Carthew, head of investment company research at QuotedData.
CVC Income & Growth Limited (CVCG), the £192m debt fund trading close to net asset value (NAV), raised only £10.3m for its sterling share class in this month’s fund raising. Professional investors subscribed for £6.3m in the institutional placing and private investors bought £3.9m in the 7.8%-yielder’s WRAP retail offer. New sterling shares will be issued at £1.1768, a 0.65% premium to NAV.
James Carthew, head of investment company research at QuotedData, said: “I have to admit I’m disappointed by the amounts raised by CVC Income & Growth. Perhaps investors reasoned that, with the shares trading around asset value and regular issuance happening anyway, there was no rush to make an investment now. That’s definitely true for retail investors, but it is a shame that professional investors weren’t persuaded to make a more sizeable allocation to the company at this time.”
Custodian Property Income REIT (CREI) has sold £2.8m of non-core properties from the £22.1m Merlin portfolio it bought in June. Two properties have been exited at £600,000, 16% above their purchase price. A further five achieved auction prices 46% higher than their acquisition cost and should generate £2.2m in proceeds later this month. The Merlin assets have maintained near-full occupancy and present scope for rental growth through upcoming lease events, the company said.
