I don't think we are told the full story.Extrapolating the...

I don't think we are told the full story.

Extrapolating the Operating Forecast statement slide from the presentation to include the no capital raise and 35% entitlement scenarios



This is an emergency capital raise to avoid breaching the ICR of 1.5x!



No idea how they get an ICR of 2.5x with 60% participation. Maybe based on their interest rates forecast dropping to below 3%....

I believe management got caught out. We were paying 4.7% interest in FY23 vs 7.57% in 2H24!
They might have been banking on a sale of Artarmon as well. Now they have no alternative but to get at least 35% participation.
TGP and Tony Pitt are tipping in money not because they think it's a bargain but because they have no other option to avoid default.

Selling assets in this market is unlikely to bring in anywhere close to "NTA".
CLW is divesting 7% of its portfolio ($500m). It's a buyer's market and everybody is on the lookout for a fire sale.

One way they could improve ICR however is to reduce the outrageous management fees!
$2m annual fees for $13m revenue is ridiculous. Especially when they make dumb decisions like paying $4m in dividend while borrowing an extra $5m at 7.57%....

I won't be participating unless management reassess their fees (I know dreaming is free).
And I will sell out if participation is below 40%.