Macau Property Opportunities (MPO) has plunged to a new all-time low after shareholders in the specialist property fund refused to support its emergency fund raising.
Shares in the company, which owns residential properties in Macau, a special administrative region on the south coast of China, crashed 55%, or 7.3p, to just over 6p after the company said it had failed to raise the minimum £1.7m it required and a placing of new shares would not proceed.
As a result the Guernsey investment company will not be able to meet a £1.5m loan repayment on its Penha Heights development due on 15 December.
“The company will seek to continue its discussions with its lenders and, if possible, accelerate the sale of properties, but there is no certainty as to the outcome,” said the company, now valued by the market at just £4m.
The MPO board, chaired by Guernsey resident Mark Huntley, told shareholders, which include Lazard Asset Management and Asset Value Investors, that the lenders could force a fire sale of the two luxury Penha Heights units, as well as its other remaining assets, which the company has been trying to sell as part of its seven-year wind-down under fund manager Sniper Capital.
It warned that “this could lead to the need for restructuring, liquidation or insolvency proceedings and shareholders losing all or part of their investment.”
The company, which has struggled during China’s downturn and faces a continuation vote at its annual general meeting next month, said it would be “actively seeking to avoid any default situation and is taking advice on its position.”
Alongside Huntley on the three-strong board is non-executive director Alan Clifton, a former chair of Schroder UK Growth, now Baillie Gifford UK Growth (BGUK), and JPMorgan Japan Small Cap Growth and Income, which merged with JPMorgan Japanese (JFJ).
Our view
James Carthew, QuotedData’s head of investment company research, said: “So, Macau Property Opportunities has failed to raise its minimum £1.7m target and is now at the mercy of its lenders. I said before that heads should roll, perhaps now they will.”
