The Lemon Fool

carnie wrote:The price on these seems to be up quite a bit today, I received a 66p quote to sell through ii.

I don't see any company announcements and the share price is not moving so am not sure why. Palm oil price has been performing better of late so I guess there maybe increasing hope of the pref dividend being re-instated?

I'll hold on for now.

Carnotaurus

... and continuing to rise, now up some 35% from last months lows. We await a reinstatement of the dividend, but I applaud anyone who had the cojones to buy these then (I didn't as deliberated above).

Trading update today.

https://www.rea.co.uk/websites/reaholdi ... ID=2060371

Subject to the prospects of much improved cash flow in 2021 being realised and to satisfactory arrangements being agreed to fund the indebtedness falling due for repayment in 2021 and 2022, the directors expect to be able to pay the dividends arising on the preference shares in respect of the current year. Whilst the group recognises the importance of paying the arrears on the preference dividend, which now stand at 18p per share, with a significant debt refinancing still to be agreed, it is not yet in a position to provide guidance on when it might be able to commence doing so.

moorfield wrote:Trading update today.

https://www.rea.co.uk/websites/reaholdi ... ID=2060371

Subject to the prospects of much improved cash flow in 2021 being realised and to satisfactory arrangements being agreed to fund the indebtedness falling due for repayment in 2021 and 2022, the directors expect to be able to pay the dividends arising on the preference shares in respect of the current year. Whilst the group recognises the importance of paying the arrears on the preference dividend, which now stand at 18p per share, with a significant debt refinancing still to be agreed, it is not yet in a position to provide guidance on when it might be able to commence doing so.

Thinking about this, is there a 'blocker' on dividends on ordinary shares until the arrears are paid, or is paying the current year dividend sufficient to allow ordinaries to receive a dividend or is there no blocker at all? I should know this, but off the top of my head I don't and I thought I would ask here before diving into the documents.

Wizard wrote:Thinking about this, is there a 'blocker' on dividends on ordinary shares until the arrears are paid, or is paying the current year dividend sufficient to allow ordinaries to receive a dividend or is there no blocker at all? I should know this, but off the top of my head I don't and I thought I would ask here before diving into the documents.

I think the ordinaries cannot be paid until all the arrears have been. It's the same as announcing that 9p of the arrears are being paid and the 2021 dividend is being deferred. I'm not sure why it's done this way round, perhaps there is some legal or accounting reason for it. Still, I will appreciate the cashflow this year.

R.E.A. Holdings plc ("REA" or the "company") Dividend payment in respect of 9 per cent cumulative preference shares (the "preference shares") In the company's annual report for the year ended 31 December 2020 published on 27 April 2021, the directors stated their intention that, provided that CPO prices remain at current levels, the preference dividends arising on 30 June 2021 and 31 December 2021 are expected to be paid during the year. In line with that intention, the directors have today declared that the fixed semi-annual dividend of 4.5 pence per preference share falling due on 30 June 2021 in respect of the half year ending on that date be paid to holders of such preference shares registered at the close of business on 28 May 2021.

Nothing yet about the 18p arrears though ...

www.rea.co.uk/websites/reaholdingsplc/E ... ID=2095880

In their annual report they state that:

Provided that CPO prices remain at current levels, the directors believe that cash flows are currently adequate to support payment of the current year's preference share dividends but, pending greater certainty on future cash flows, they are not yet in a position to provide guidance regarding payment of the arrears of preference dividend, which now stand at 18p per share. The directors recognise the importance of paying these arrears and will aim progressively to catch up such arrears as soon as circumstances prudently permit.

The flame is beginning to flicker again. Back to (nearly) par - did anyone manage to nearly double their money on these from last year's low? There'll be a tasty income in it for you too.




https://www.rea.co.uk/websites/reaholdi ... ID=2148584

Dividends



As anticipated in the company's 2020 annual report, the fixed semi-annual dividend on the company's preference shares that fell due on 30 June 2021 was duly paid.



The cumulative arrears of preference dividend currently amount to 18p per share and the directors intend that 1p per share of this should be paid on 31 December 2021 together with the semi-annual preference dividend arising on that date. The directors recognise the importance of eliminating the arrears of the preference dividend and will aim progressively to reduce such arrears as rapidly as the performance of the group permits.



While the dividends on the preference shares are more than six months in arrears, the company is not permitted to pay dividends on its ordinary shares.

Yes I did. Bought at 56.
But still losing money with the ordinary stock

100!
On par now. Still a buy at 9% + arrears.

naam wrote:100!
On par now. Still a buy at 9% + arrears.

Still 17p of arrears to make up.

These arrears have to be paid before REA can pay dividends on its ordinary stock.
So my guess is that they will be paid as soon as they can.

If palmoil prices stay at these levels, I'm betting on a full payment before the end of 2022.

Announced this morning

As already announced, REA will pay a dividend of 5½p per share on the company's preference shares on 31 December 2021. The 5½p will comprise 1p per share of arrears of dividend plus the 4½p of dividend accruing on 31 December 2021. REA intends that, in addition to the normal dividends (totalling 9p per share) accruing in respect of the preference shares during 2022, the company will pay not less than 10p per share of dividend arrears on the shares (amounting to 17p per share after payment of 1p of arrears on 31 December 2021) by no later than 31 December 2022. REA plans to increase this amount if expectations regarding recovery of the loans to IPA are confirmed, the group's oil palm operations continue to perform satisfactorily, and the group retains a substantial proportion of the existing dollar note funding for the proposed extension period.


Full details here


https://www.londonstockexchange.com/new ... s/15225252

Good news. A big (albeit deferred) packet of cash coming next year.

Re RE.B 9% prefs

Got a little lost on the maths here.If anyone can clarify it would be appreciated.

For 2022 , 9p of regular dividend + 10p per share of arrears ,minus the 1p already paid in Dec 2021 = So 18p total due in 2022 ?

Company says 17p.

Am a penny out .

Swan

"REA intends that, in addition to the normal dividends (totalling 9p per share) accruing in respect of the preference shares during 2022, the company will pay not less than 10p per share of dividend arrears on the shares (amounting to 17p per share after payment of 1p of arrears on 31 December 2021) by no later than 31 December 2022.

Refers to the total arrears standing at 17p, not the payout.

GS

Preference shares

As at the date of this document, the issued share capital of the company comprises 43,950,529 ordinary shares (of which 132,500 are held as treasury shares) and 72,000,000 preference shares. As the dividend in respect of the preference shares is more than six months in arrears, each preference share currently confers upon the holder the right to vote at general meetings of the company. The voting rights attaching to shares of the company generally exercisable at general meetings of the company thus total 115,818,029 as at the date of this document, with a total of 43,818,029 votes exercisable in respect of the ordinary shares and 72,000,000 exercisable in respect of the preference shares. Holders of preference shares will retain their enhanced voting rights until the arrears of preference dividend are cleared.

The company paid the preference dividend accruing in respect of the year ended 31 December 2022 (9p per preference share) together with 1p per share of arrears of dividend, thus reducing the aggregate arrears from £12,960,000 to £12,240,000. As previously announced, the directors intend that, in addition to paying the preference dividend accruing in respect of the current year ending 31 December 2022, the company will also pay not less than 10p per share (£7,200,000 in aggregate) of arrears of dividend during the course of the current year.

Also as previously announced, the directors plan to increase this amount of 10p per preference share if (i) expectations regarding recovery of group loans to ATP are, as remains hoped, confirmed, (ii) the group's oil palm operations continue to perform satisfactorily, (iii) the proposed extension of the redemption date for the dollar notes becomes effective and (iv) sufficient of the outstanding dollar notes remain in (or, in the case of dollar notes purchased by REA Services pursuant to the sale facility, can be re-sold by REA Services into) public hands.

The revised outlook for preference dividends has hit the price of REA Holdings preference shares hard - down 20% to 59.

7p arrears of dividend will not now be paid with next divi and decision of next divi to be made in November:

https://rea.co.uk/news/r-e-a-holdings-p ... 73d3c0195/

OldBoyReturns wrote:The revised outlook for preference dividends has hit the price of REA Holdings preference shares hard - down 20% to 59.

7p arrears of dividend will not now be paid with next divi and decision of next divi to be made in November:

https://rea.co.uk/news/r-e-a-holdings-p ... 73d3c0195/

I have a morbid fascination in these... They are again in what looks like distressed/liquidation value territory (see my previous attempt above). All my spare cash is building an IT portfolio this year, but if I was looking to take on a cigar butt punt I would buy a bucket full.

What might a liquidation look like? Let's be harsher and strip out the inventories and biological assets (the palm kernels trees and oil).



That would leave $2.09 (£1.70) per preference share, and write down those property, land, interests assets again by 20% (or incur similar liquidation costs instead, say) falls to $0.79 (£0.64) per share. Whether that's remotely realistic or not is a question. The notes and loans are secured against property and land as far as I can see so presumably creditors would want to recoup as much as possible.

moorfield wrote:What might a liquidation look like? Let's be harsher and strip out the inventories and biological assets (the palm kernels trees and oil).

In a liquidation there would likely be nothing for the preference shareholders. Security for loans also cannot be relied upon especially given the geographical location of the business. Secured bondholders would be lucky to get any sort of payment -- first to get paid would be the liquidators and employees etc.

Opinion formed out of bitter experience.


GS