ALH /WOW will continue to pay rent. this isnt a retail shopping...

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Nige456

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31/03/20

14:08

Post #: 43797641
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Originally posted by volf: ↑

A couple points.
1. I am not suggesting ALH will move elsewhere, I am suggesting ALH will not pay rent and this will cause debt issues.
2. Whilst I think there are high quality ALE premises, there are a number that are low quality and it is clear ALH has not been spending capex on those ones.

More on point 1 and the debt issues:
- It is almost certain ALH will refuse to pay rent whilst they are in shutdown, as all other retail tenants are doing.
- ALE runs on very low cash at bank, currently it only has circa $5m of free cash at hand after paying its dividend.
- That is about 2 months cash at most to cover interest & other costs before it has run dry.
- This could also trigger the debt covenants for the AMTN facility which can then call for their notes to be redeemed.

There is a very likely capital raise here and unfortunately I suspect it will be an institutional placement at a deep discount. Should this be the case, retail shareholders will get done over.

I am in this stock, I just think that it can go much lower and I'm certaintly not hoovering up shares at this price.

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ALH /WOW will continue to pay rent. this isnt a retail shopping outlet and nor is WOW a struggling tenant. the contracts are much more strict on pubs and commercial premises. WOW is not a struggling tenant, they make billions per year.

Last edited by Nige456: 31/03/20

LEP Price at posting: $3.96 Sentiment: Hold Disclosure: Not Held
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0 Great analysis

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ALH /WOW will continue to pay rent. this isnt a retail shopping...

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