Sir Royalty Income Fund T.SRV.UN

What a mess

[logicandinertia]

This is disappointing.  

SIR CORP maintains a "going concern" provision in its financials and fails to pay the partnership/fund the accrued owing (therefore setting up a tax liability - $$$ that should have gone to shareholders will now go to the govt), yet now want to lowball SIR ROYALTY shareholders.

They remain beholden to BNS, who i assume is restricting their ability to pay out the accrued amounts (as they have issued covenant relief) to fund holders.  

Yet instead of diluting themselves and bringing in additional equity capital to pay down BNS or line up other debt lines to gain more flexibility (benefiting unit holders), they propose to opportunistically buy out minority shareholders while the pandemic reaches record numbers (albeit a vaccine is slowly rolling) and hope scared shareholders will fold.  

This is absurd, and good on the independent trustees for putting in their $0.02.   

The bank line with BNS is up for  renewal in the summer i think .   Vaccine rollout will be in full stride at this time, and restaurants will be reopened.  Why not find alternative lenders then which will provide more flexibility??   

This is the owners of SIR (Fowler) presumably crying poverty on one side of his mouth , yet scrounging up enough capital to attempt to low ball investors, such that once things reopen, all the cash flow that was going to unit holders (~$10mm per year for a decade) goes to him and the other SIR CORP owners.   At a buyout price of $30mm and if financing could be done at 5%, that is only $1.5 million in servicing costs, versus cash flow thrown off of $10mm , a good deal by anybody's standard.   Recognizing that the restaurants won't get back to $10mm in 2021, but with reduced industry capacity, and a decent economy, maybe 2022.

Minority shareholders should vocally (call the company) make the company aware of their feelings...