Balmoral International Land, the property company controlled by the wealthy McCann family, plans to offer to buy out some smaller shareholders at a deep discount to the intrinsic value of the stock after the group swung into a net cash position last year.
The company was originally named Blackrock International Land when it was spun out by Fyffes in 2006. It was delisted in 2011 following a slump in its share price during the property crash.
Balmoral said in a circular posted on its website this week that it is seeking to initially spend €2 million buying stock from investors with small hareholders who have found it costly and difficult to dispose of stock on the grey market. The company reserves the right to increase the size of the redemption programme, it said.
The planned offer price of 7 cent per share is higher than the 5.5c at which the stock most recently traded on the grey market. However, it represents a deep discount of more than 60 per cent from the company’s reported net asset value of 17.93c per share, detailed in its annual report, also published in recent days.
Balmoral is 59 per cent owned by investment vehicles controlled by members of the McCann family who were synonymous with Fyffes, before the latter group’s sale in 2017 to Japanese conglomerate Sumitomo. These include the group’s chairman, Carl McCann.
Mr McCann is also executive chairman of Dole Plc, the Irish-based but New York-listed fresh produce company created in 2021 through the merger of Dole Foods with former Total Produce.
Total Produce was also once part of the Fyffes group.
Balmoral’s debt declined to €35 million last year from €57.5 million with the help of €32.6 million of proceeds from the sales of an industrial building and offices in Milton Keynes in the UK and an industrial property in Dublin.
The company swung into a net cash position for the first time since its early existence last year, with net cash of €7.5 million at the end of December compared to net borrowings of €33.7 million a year earlier.
Net assets rose to €140.6 million from €127.7 million on the year. While the company booked a small writedown on its Irish property portfolio, the value of its UK assets was revised upwards.
Some 70 per cent of its portfolio is made up of industrial and warehouse assets, with Fyffes and Dole among its main tenants.
“The operating environment for the group’s business has become more challenging as a result of increased interest rates. This reduces the amount of credit available for expansion and puts pressure on our tenants’ businesses,” Balmoral said.
“It also makes development less attractive until rental rates adapt. Nonetheless, the group will continue working to enhance the value of its assets through the pursuit of improved designations, while at the same time seeking to maximise income opportunities and minimise property outgoings and operating costs and to avail of opportunities to sell properties as they arise.”
