API wind-down?

[SKYSHIP]

ukmtk - read the RNSs

The BoD was against wind-down when they were recommending the CREI bid.

Shareholders voted that down; so BoD now recommending wind-down.

[SKYSHIP]

Now 4 weeks after the 95% approval vote for the wind-down.

A bit soon to expect any disposals news; so in the meantime the sp slightly drifting from boredom - people just too impatient!

It does mean however that these are even better value at c51p, with a likely GRY% pa of perhaps 18%.

A return at that level most certainly justifies the MAX allocation in my SIPP.

[Stolenscone]

In truth, the investment case of both API and ASLI boil down to an understanding of the quality of the assets in the fund and an assessment of the book value vs likely market value.

People have mentioned having faith in the fund manager to achieve a decent price for the disposals, but he really has very little to do with it. His skill was in picking and pricing assets on the way in. The market will dictate what prices are achieved on exit.

For me (happily I do not yet hold either), the only question is whether the discount to book value is wide enough to allow enough comfort.

Interest rates are likely to move positively in the relatively short term, which will boost values and help with liquidity in the market. Maybe not a lot, but it adds to positive sentiment.

The assets held by ASLI seem to me to be a bit better quality. The regional offices in API will be harder to shift, and the office vacancies are going to be hard to fill. But on balance, and assuming a fire sale on the rump of those harder to sell assets, I still can't help thinking that a c.30% discount to NAV against the backdrop of improving market conditions makes for a compelling case for both funds.

Would I buy either if they weren't being wound down? Probably not. But as a short term opportunity, I think that I will take the plunge and take a small position in both, to be held through until exit.

The main downside for me is that the fund managers are effectively being asked to sell themselves out of a job, so there's a risk of them completely losing interest. But the size of that discount at today's prices does leave an awful lot of headroom for them to make a mess of it and still turn a profit. But not for the faint hearted. Buckle up...

[SKYSHIP]

Stolenscone - you state:

"The main downside for me is that the fund managers are effectively being asked to sell themselves out of a job, so there's a risk of them completely losing interest."

You can most certainly relax on that score. If you take a look at the wind-down circulars you will see that the managers are being very well incentivised to maximise returns in a timely fashion.

Also, though true that the Market will broadly speaking dictate values, nevertheless, each sale requires negotiation and a good fund manager is well capable of playing poker and squeezing the last 1-2% out of a prospective buyer. I certainly have confidence that Jason Baggaley at API will make a very good job of the wind-down. He is widely considered to be one of the best managers in the sector.

[SKYSHIP]

From Green Street News (recent name change from React News):

"Private equity firms are also looking at a whole-portfolio deal for Abrdn Property Income, as Green Street News reported last month. API is winding itself down after its proposed merger with Custodian REIT was vetoed by investors on a tiny turnout."

Sp 54p. Last NAV 78.5p. If a deal is done it would be for the portfolio, then API would liquidate.

Could bring things to an early conclusion; with a value minimally of 70p. That would provide c30% upside.

If you're reading this and don't hold; then the only decision you need to make is: What size allocation?

[88V8]

If you're reading this and don't hold; then the only decision you need to make is: What size allocation?

It's odd that the market so stubbornly refuses to recognise the supposed value in these trusts.
As previously mentioned I have a holding of ASLI, where the SP also remains far below the declared NAV.

A bounty or a bear trap, that is the question.

V8

[SKYSHIP]

API been a good performer recently - touched 58p Bid last week; before settling back to close out the week at 57.15p.

Still look good wind-down value; however in the very short-term perhaps ASLI, again on offer at 61p, may represent the better value.

I own both, with a combined allocation of 26%.

[puffster]

From https://www.londonstockexchange.com/new ... n/16683989

RESPONSE TO PRESS SPECULATION
(the “Transaction”)

abrdn Property Income Trust Limited (“API” or the “Company”) notes the recent press speculation and confirms that it is in advanced discussions with funds managed by GoldenTree Asset Management LP for the sale of the entire share capital of abrdn Property Holdings Limited (“APH”), a wholly-owned subsidiary of API.

Any sale would involve the disposal of the Company’s entire investment property portfolio, with the exception of its interest in the land at Far Ralia.

There can be no certainty that any binding sale agreement will be entered into, nor as to the terms on which any transaction may occur. API has not received any offer in respect of the issued share capital of API.

A further announcement will be made when appropriate.

Regards, Puffster

[ukmtk]

The sale looks a lot more concrete: https://www.londonstockexchange.com/news-article/API/proposed-sale/16686857

Proposed Sale ... GoldenTree has paid a cash deposit of £35.1m

[MickR]

64p a share, payable late November. Still available to buy at 61

[TallInvestor]

More of a fire sale than a managed wind-down. Does not bode well for ASLI.

[ukmtk]

At least my losses won't be so great - I paid 82p per share.
A lot better than RGL - where I paid 100p per share a few years back.
After the API payout my portfolio won't be so red - it is mainly blue.

[SKYSHIP]

Tailinvestor - think you've got that wrong.

A voluntary liquidation return matches price and time. The API deal looks a pretty good one to me; especially
as a bull from 50p!

ASLI promises a repeat deal; and at just under 61p there should be a clear 15% upside over the next 12months.

The assured profit at negligible if any risk, makes ASLI a great BUY.

[ukmtk]

Any idea when we'll see the payout for the API wind-down?
I assume that Dec 2nd is being overly hopeful?

[Stolenscone]

Re timing: there is no way to be precise. The portfolio sale has not completed yet, and it's not done until it's done. The buyer has paid a hefty deposit though, so in all likelihood it will go through, and while there is doubtless a longstop date for completion (after which the deposit would be forfeited), only those on the inside will know what that date is.

Mentally, I have pencilled in towards the end of November, but I'm not going to panic if it drifts a bit beyond then.

[Brigadier]

Any idea when we'll see the payout for the API wind-down?
I assume that Dec 2nd is being overly hopeful?

From the Chairman's statement 27 September, "It is likely that a liquidator will be appointed shortly after the completion of the sale of the portfolio and the proceeds have been received by the Company. Putting the Company into a members’ voluntary liquidation will require shareholder approval at an extraordinary general meeting. If the liquidator is appointed, the Company’s shares will delist from the London Stock Exchange and the ability to trade in the shares will cease. Shortly after that the liquidator will distribute the majority of the proceeds of the portfolio sale to shareholders by way of a capital distribution. The liquidator will then seek to sell Far Ralia, settle all Company liabilities, wind-up the Company and distribute the remaining cash balances to shareholders."

Once the sale is completed, a minimum of 21 days notice is required for the EGM. However, it is likely that the liquidator will be appointed the same day and, as most of the assets are cash, "the majority of proceeds" should be issued promptly. Despite this I doubt that the first distribution will take place before Christmas.