By Clyde Mooney
The Redcape Property Fund (RPF) has again made clear its determination to find a favourable long-term solution to its overwhelming financial problems by delaying a decision on its future.
The pub owner has granted a further extension in due diligence to the investment group that recently bought a controlling share of its debt.
Although many signs have pointed to a tough-love outcome for Redcape, the lack of alternatives appears to have them looking to their jailers for some kind of future.
It is feared the New York investors will recapitalize the entire portfolio of around 82 properties, with the subsequent dilution likely to prove very costly for stakeholders.
Towards the end of May a deal was brokered by Goldman Sachs (Asia) Finance, on behalf of York Capital Management and Värde Partners, to purchase around 39 percent of RPF’s senior debt from two of its frustrated nine-strong banking syndicate, Westpac and Bank of Queensland, for around 80c in the dollar.
A confidentiality and exclusivity agreement was entered into between the property fund and investors, with RPF later granting an extension until last Friday, July 8.
News of the debt purchase brought about a rapid 65 percent drop in RPF’s share price as shareholders showed they were eager to escape the impending watering-down of ownership.
The remaining stakeholders appear to be awaiting news of the potential proposal (on recapitalization), with the share price remaining steady at just $0.13 and fewer than 90,000 shares traded in the past week.
The move by the Goldman Sachs investor group interrupted a deal reputedly worth $330 million between RPF and their leaseholders NLG, and Laundy Hotel Group (LHG) and Woolworths-backed ALH, to purchase 20 properties and take over the leases.
LHG has today told TheShout that their negotiations remain on hold, but that they have not given up hope of an outcome.