Ravelin Properties REIT 9 00 Convertible Unsecured Subordinated Debentures Exp 28 Feb 2026 T.RPR.UN

Debenture Holders Now the Key to Restructuring

[TVR]

The 3 series of convertible debentures outstanding amount to a total of $158.7 million of debt, plus an aditional $10.5  million for accrued unpaid interest to end of 2024.  With the latest property writedowns it does not appear possible the REIT can now get back onside with the various secured debt covenants while the debentures are still outstanding. Unitholder equity is now only around $46 million so the unitholders now have little say in what happens.

It now appears likely the only way an acceptable restructuring can be accomplished is to eliminate the debentures by offering an acceptable equity conversion. This effectively puts the debenture group in control of any restructuring since it will not happen without the debenture holders approval.  I will be surprised if a group of the larger debenture holders is a not already represented at the restructuring table and it would be nice as a debenture holder if this group would go public and let the other debenture holders know they are respresented in the discussions.

We do not know if there is any outside interest in SOT.UN in the form of potential buyers or acquirers like another REIT.  In any event it is a low probability any inrested party would offer to pay out the debentures in cash.

It is positive that today's early trading in SOT.UN has not resulted in an enormous drop in market price (still at 58c a minute ago) given the substantial asset writedown announced yesterday.

Now we wait and see what sort of an offer is put on the table.

[Tree2tree]

TVR, I agree that "It is positive that today's early trading in SOT.UN has not resulted in an enormous drop in market price."   However, I respectfully disagree that debentures are the key to restructuring.  You didn't mention a major player in this (not the only player) who is GA.  He has a large number of common shares and presumably wants to make money on those.

[TVR]

T2T - No question Arrmoyan is probably the largest unitholder and would certainly want to recover on his investment.  However, I do not htink he is a large enough unitholder or has deep enough pockets on his own to get the secured lenders back on side.  The debt ratio is now around 80% and is not sustainable which is why I think the debentures will likely have to be converted. 

[Tree2tree]

Somebody pointed out that GA recently sold assets for over $100 million, I don't remember the exact amount.  And people like that have friends.   Re the "untenable" debt ratio, remember that too is negotiable.  The debt holders do NOT want a liquidation (or we could have had one months ago).

[pennylane101]

Right!  Why take the properties off the selling block? It makes no sense. Something is up and you can be sure Armoyan will benefit. The debt holders do NOT want a liquidation (or we could have had one months ago).

[Tree2tree]

"Why take the properties off the selling block?"   My guesses:   1.  The market has not rebounded to the extent that they could be sold at a good price.  Selling at a poor price would generate only modest amounts of cash after paying mortgages, and not do much for the debt ratio.   2.  GA sees himself as the future majority owner of SOT, and would like to