Forterra Trust (formerly: Treasury China Trust)

[KopiKat]

How to rename thread to reflect new company name?

Proposed Sale of Central Plaza, Shanghai, China

What is the new name? I can help with it if you let me know.

Forterra Trust
Thx!

[Boon]

Boon, it seems that you missed the point.

It is not that the liquidator will go after the asset of TCT. There is hardly any way for the liquidator to do it.

It is about the convertible bonds having conditions about who ultimately owns THRE and the property management company. The reason of the sale to Richard Barrett is to prevent earlier redemption of the convertible bond.

plus, the liquidator can also go after the transaction of sale of TCT units by the TH subsidiaries to Richard Barrett and John Ronan. So there is possibility that TCT units may be forced sale in the market to repay TH's debt.

Hi Freedom

Thanks for your concern.

I am fully aware of the bond issues. The amount involved is about SGD 70 million. I do not view the early redemption of the bonds as being a minus. On the contrary, I view it as a plus - if TCT has to divest (not fired-sales) BLP and/or Central Plaza to pay for the bond redemption – doing some divestment at this stage is not a bad thing – it would be even better if some of the sales proceed could be distributed to unit holders.

On your last point, assume that “forced- sale” does happen. Again, I see more plus than minus in this - if the controlling interests in TCT of both RB and JR combined could be reduced below 25% - the less the better.

If TCT has to divest, why do you think any potential buyer would pay a fair price knowing that TCT is in need of money? Plus, the book value of those properties already on the high side. It may not be a fire sale, but it is difficult for TCT to obtain a fair value.

force sale of TCT units will drive price very low given its very low liquidity. not good for existing unit holders.

The brokers for the sale of Central Plaza and BLP are JLL and CBRE respectively. The sales have been conducted by sealed bids.

As to what price could Central Plaza and BLP be eventually sold for, it remains to be seen. One’s projection really depends on how well one understands the China/Shanghai property market. My guess is - it will be within the range of plus and minus 10% of book value.

If TCT units of Barrett and Ronan were to be force sold, I guess it would be through married-deals. There will always be Private Equity real estate funds eyeing for it, if there are profits to be made.

Forterra Trust (Formerly named Treasury China Trust) has announced that it has entered into an agreement for the divestment of Central Plaza at approximately 7.9% discount to its book value.

If the proposed sale goes through, it would certainly enhance and strengthen the liquidity of this business trust.


http://info.sgx.com/webcoranncatth.nsf/V...80045CFE0/$file/SGX_Announcement_Sale_of_Central_Plaza.pdf?openelement

[freedom]

I have to say that both The Carlyle Group and Forterra Trust know how to dodge tax in China. The Chinese authorities won't be too happy about this kind of deals.

Though there is a discount to its valuation, through sale of shares in company domiciled in H.K., Forterra avoids capital gain tax which is taxed 20% in China, but none in H.K.

[MINX]

Boon, it seems that you missed the point.

It is not that the liquidator will go after the asset of TCT. There is hardly any way for the liquidator to do it.

It is about the convertible bonds having conditions about who ultimately owns THRE and the property management company. The reason of the sale to Richard Barrett is to prevent earlier redemption of the convertible bond.

plus, the liquidator can also go after the transaction of sale of TCT units by the TH subsidiaries to Richard Barrett and John Ronan. So there is possibility that TCT units may be forced sale in the market to repay TH's debt.

Hi Freedom

Thanks for your concern.

I am fully aware of the bond issues. The amount involved is about SGD 70 million. I do not view the early redemption of the bonds as being a minus. On the contrary, I view it as a plus - if TCT has to divest (not fired-sales) BLP and/or Central Plaza to pay for the bond redemption – doing some divestment at this stage is not a bad thing – it would be even better if some of the sales proceed could be distributed to unit holders.

On your last point, assume that “forced- sale” does happen. Again, I see more plus than minus in this - if the controlling interests in TCT of both RB and JR combined could be reduced below 25% - the less the better.

If TCT has to divest, why do you think any potential buyer would pay a fair price knowing that TCT is in need of money? Plus, the book value of those properties already on the high side. It may not be a fire sale, but it is difficult for TCT to obtain a fair value.

force sale of TCT units will drive price very low given its very low liquidity. not good for existing unit holders.

The brokers for the sale of Central Plaza and BLP are JLL and CBRE respectively. The sales have been conducted by sealed bids.

As to what price could Central Plaza and BLP be eventually sold for, it remains to be seen. One’s projection really depends on how well one understands the China/Shanghai property market. My guess is - it will be within the range of plus and minus 10% of book value.

If TCT units of Barrett and Ronan were to be force sold, I guess it would be through married-deals. There will always be Private Equity real estate funds eyeing for it, if there are profits to be made.

Forterra Trust (Formerly named Treasury China Trust) has announced that it has entered into an agreement for the divestment of Central Plaza at approximately 7.9% discount to its book value.

If the proposed sale goes through, it would certainly enhance and strengthen the liquidity of this business trust.


http://info.sgx.com/webcoranncatth.nsf/V...80045CFE0/$file/SGX_Announcement_Sale_of_Central_Plaza.pdf?openelement

Central plaza is a prime property, I thought it is one of their core property, they must be in quite abit of a tight spot to sell it, no?

[KopiKat]

I couldn't find this thread under 'F' as it's still under 'T'.... Perhaps they'll change their name again.... Extracts fm SGX Annc,

Wholly-owned subsidiaries of Nan Fung International Holdings Ltd ("Nan Fung") conditionally contract to acquire:

(i) 100% of the equity of each of Forterra Real Estate Pte. Ltd. ("FRE", and in its capacity as trustee-manager of Forterra Trust, the "Trustee-Manager") and Treasury Holdings (Shanghai) Property Management Co., Ltd ("THPM" or the "Property Manager"); and

(ii) 29.98% of the units in issue of Forterra Trust (the "units")

[Boon]

I couldn't find this thread under 'F' as it's still under 'T'.... Perhaps they'll change their name again.... Extracts fm SGX Annc,

Wholly-owned subsidiaries of Nan Fung International Holdings Ltd ("Nan Fung") conditionally contract to acquire:

(i) 100% of the equity of each of Forterra Real Estate Pte. Ltd. ("FRE", and in its capacity as trustee-manager of Forterra Trust, the "Trustee-Manager") and Treasury Holdings (Shanghai) Property Management Co., Ltd ("THPM" or the "Property Manager"); and

(ii) 29.98% of the units in issue of Forterra Trust (the "units")

Interesting development, Nanfung is willing to pay SGD 2.98 per share for the entire stake of Richard Barrett/John Ronan in the business trust.

[Boon]

NAV = SGD 4.25 per share

Nanfung is paying SGD 2.98 per share (70% discount to NAV) for 29.98% of total units issued.

Current share price = SGD 2.05 (48% discount to NAV)

Wondering what is the ultimate motive of Nanfung?

(not vested)

[greengiraffe]

I don't like this type of deals - if indeed is a good deal, just trigger the takeover. Anyway, its a China property deal so need not get too excited over it.

China's money printing press is no longer as well oiled as previously especially for non-productive speculative sector.

Not Vested
GG

NAV = SGD 4.25 per share

Nanfung is paying SGD 2.98 per share (70% discount to NAV) for 29.98% of total units issued.

Current share price = SGD 2.05 (48% discount to NAV)

Wondering what is the ultimate motive of Nanfung?

(not vested)

[GreedandFear]

I don't like this type of deals - if indeed is a good deal, just trigger the takeover. Anyway, its a China property deal so need not get too excited over it.

China's money printing press is no longer as well oiled as previously especially for non-productive speculative sector.

Not Vested
GG

NAV = SGD 4.25 per share

Nanfung is paying SGD 2.98 per share (70% discount to NAV) for 29.98% of total units issued.

Current share price = SGD 2.05 (48% discount to NAV)

Wondering what is the ultimate motive of Nanfung?

(not vested)

Whilst I would normally be cautious on China stocks, I think this one is interesting given that the assets are held by a Singapore business trust (less fraud risk) and Nan Fung is a very large and reputable HK developer. They are not listed but have successfully issued 5 and 10 year USD bonds that are rated BBB-/Baa3 (ie the lowest investment grade rating). The bonds are currently trading around 4 and 5.5% respectively which is pretty decent. According to the prospectus, the company is net cash. They are known as a large financial investor in HK (bonds, stocks and private equity). I am mystified as to why the shares have not, at least, traded up to the $2.98 a share price that Nan Fung paid. Seems to me a no brainer that this is a savvy real estate investor and hence I am now vested.

[Boon]

I don’t like this kind of deal either - majority shareholders cashed out first leaving behind minority shareholders who have to deal with “a new trustee manager”.

That said, a deal is still a deal whether it is a china property deal or whatever, one just have to evaluate, based on its fundamentals, to see if it is a good deal.

No doubt, China’s money printing press is no longer as well-oiled as before - nonetheless, quality assets in top locations such as those owned by Forterra Trust should have no problems in attracting buyers/investors - locally or abroad. Like Central Plaza, this deal would probably be transacted “offshore”.

It’s a pity that Richard Barrett/John Ronan did not choose to go down the path of dissolving the business trust by selling away all assets. IMO, if they do so, they (and unit-holders) could probably get more than SGD 2.98 per share.

Central Plaza had been disposed of at around 93% of its BV.

My guess is Beijing Logistic Park could be sold for not less than 90% of its BV.

To dispose of other assets one by one at 90% of their BV should not be difficult IMO.

To sell them off at 80% of their BV should be considered easy.

To sell them off at 70% of their BV should be even easier.

If Nanfung has no intention in making a takeover, I don't see why the share price should be trading at up to SGD 2.98

(not vested)