Thursday, January 26, 2017

Sabana Reit - An opportunity to unlock value

On 25 January, Sabana released their latest results presentation. I had a very troublesome time trying to calculate their price-to-book value post-rights.  The adjusted NAV per unit shown refers to pre-rights but naturally, everyone would be interested in knowing the post-rights one as the rights shares has already been issued.

I can't find any information on the new right units in their latest presentation. I had to dig up previous documents in order to find out the number of new rights units... so troublesome.

New rights units = 310,712,244
Units in issue as at 31 Dec 2016 = 742,371,286
Total units in issue = 1,053,083,530
New proceeds = $80,000,000
NAV as at 31 Dec 2016 = $556,795,000 
Total NAV post rights = $556,795,000 + $80,000,000
Nav per unit =  $0.605
Price to book = 0.60

25 January Results Presentation
Lately, there has been this group of investors who are trying to remove the Sabana manager OR to dissolve the trust and sell the assets. It seems to be going well. Therefore, i bought a little bit of Sabana to participate in it. 

The worst case that can happen is that these group of investors fail and i just get an about 7-9% dividend yield . I would much prefer them to dissolve the trust and sell the reit and i get 30-40% return ( assuming it can sell near it's NAV value and after factoring cost of selling). 

Even without these considerations, i think it would be good for me to support the rise in minority shareholder activism as this would sent a message to other companies that they need to buck up and not take us for granted.


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