Lippo Malls REIT (LMIR)

[Greenrookie]

Personally, I think this is a 'defensive' move by the Management in light of the volatile SGD/IDR rates which could easily distort its financial ratios and covenants in a flash. While it is possible to hedge the income stream, I am not certain if it is possible to hedge the property valuation or the debt principal.

2Q 2013

Inv Properties: 1,765 million
Debt: 462 million
Cash: 143 million
Gearing: 26%

3Q 2013

Inv Properties: 1,508 million
Debt: 464 million
Cash: 127 million
Gearing: 31%

It seems that the gearing rose dramatically as the property values were adjusted due to translation effect. I am curious whether will we see an increase in property valuation in 4Q 2013 by the valuers since properties are meant to be good inflation hedge ? What do buddies think ?

(Not Vested)

IIRC, I remember seeing in the 2012 AR that valuation of properties in terms of rupiah are increasing but is lower when converted back to S$. We will need the 2013 AR to confirm if it is still the case for 2013, but in Q3 presentation, they for the first time show the rental income in Rp million, too, to highlight the impact of currency.

I see this as a prelude for future acquisition. As Mobo pointed out, but I think there will be further equity raising. As KopiKat pointed out in another thread, if debt ceiling is breached due to revaluation of properties, companies do not need to do capital raising to bring the debt level down. But they cannot acquire anymore.

They are some way away from the celing, so no need to defend, since the breach is just "academic", unless they wanted to acquire