Cache Logistics Trust 18 for 100 Rights Issue.

It has been many years since I blogged about Cache Logistics Trust in more detail. 

After partially divesting my investment in the Trust a few years ago, I have not really looked at it as I decided back then that they were not friendly to retail investors like me.

Many share placements over the years have diluted the NAV per unit and although total revenue has increased, DPU has reduced. For a retail investor (for income), it is not good for me.




I searched my blog's archives and the last time I really blogged about Cache Logistics Trust was in 2012. 

NAV per unit was 90c then in 2Q 2012. 

It was 77c in 2Q 2017.

DPU was 1.981c then in 2Q 2012. 
It was 2.086c the quarter before. 

It was 1.8c for 2Q 2017.

Gearing level was at 27.5% then in 2Q 2012. 

It was 43.4% in 2Q 2017.

Interest cover ratio was 7.5x then in 2Q 2012. 

It was 4.0x in 2Q 2017.

With gearing level much elevated, some form of equity fund raising is not unexpected. 





The manager did say in their 2Q 2017 presentation that they wished to achieve a lower leverage ratio and the Trust just announced an 18 for 100 rights issue at 63.2 cent per rights unit.

See 2Q 2017 presentation: HERE.

I have said before that I like rights issues if funds are being used to generate more income and hopefully they are DPU accretive. 

However, rights issues to strengthen the balance sheet means a lower DPU and we should expect DPU to drop by a few per cent after this rights issue is over, everything else remaining equal. 

Yes, this rights issue is to strengthen the Trust's balance sheet.





After suffering a string of dilution in the value of their investment in the Trust and receiving lower DPU over time, now, retail investors are being asked to cough up some of those reduced distributions they received to help strengthen the balance sheet. 

Why don't they do another private placement which was something they did so well before?

OK. I know. I am complaining. 

Hey, I am Singaporean!

Complaining is something I can do quite well but I like to think that I am not being unreasonable.

Anyway, after the rights issue, gearing level will reduce significantly from 43.4% to 35.5%. 

Let us hope they do not squander a stronger balance sheet. Crossing fingers (and toes).

See announcement: HERE.
See time table: HERE.

Related post:
Cache Logistics Trust 2Q 2012 DPU reduced.

Care for physical and financial health. (New AK blog?)

Reader:
Sorry didn't msg u for awhile
I broke my arm
Hope u r doin well Shi fu

AK:
Please take calcium supplement and also Vitamin C. We need especially as we age.
Best is to take with Magnesium and Vitamin D included.
Also, take Omega 3 supplement if you don't take enough fish.
I take all these.





Reader:
Ok noted will ask my Wife
Now got go therapy
Damn pain

AK:
Also, taking Vit C will help in recovery.
500mg a day.
I told a friend to give his wife who went for operation.
His wife was in pain for a long time... and the vit c helped a lot in speeding her recovery.
And even after recovery, continue with Vit C for maintenance... Daily one pill... very impt for anti ageing and also reduces chances of getting cancer

Reader:
Wah

AK:
It is many times more potent than Vit E as an anti oxidant. People don't know how powerful Vit C is.



Reader:
U can set up nutrition blog Liao
If ppl dunno tink u work in pharmacy

AK:
haha... already thinking of stopping this blog. i lazy

Reader:
Cannot stop la
U r inspiration for many
Stil alot ppl haven wake up
Stil tink big car n house means Ho seh Liao
I see a few around me buy Rolex , AP etc
Few months salary gone like tat




AK:
aiyoh... not much i can do lah
they happy can liao 😜

Reader:
Ya now I don't talk le
Waste time waste effort
Haha

AK:
See? You also like that liao. LOL

Reader:
I go sleep first Shi Fu .. later working
U take care talk to u soon





AK says:
We must try to take better care of ourselves physically as we age. 

The body is not as resilient as before. 

All we can do is to slow down the deterioration.

Unlike our physical body, our financial body can actually become stronger as we age. 

How to do this?

Alamak... I forgot to ask. What is "AP" har?

Related posts:
1. Don't be the 1 in 9.
2. Average income workers can be rich.