Cairo – Mubasher: Pharos Research reiterated the fair value (FV) of Palm Hills Development (PHD) at EGP 3.47 per share, with “Buy” recommendation, according to a recent report.
Palm Hills Developments (PHD) announced that it has commenced its plan to monetize some of its receivables, the report stated.
The company begun the necessary procedures to issue securitized bonds of up to EGP 1.0 billion, with the first tranche worth EGP 350 to 450 million to be issued in the fourth quarter of 2016.
This comes as part of a plan to monetize around EGP 2.5 billion over two-three years, the report added.
The transaction proceeds will be mainly used to refinance existing debt, which stood at EGP 3.6 billion as of end 30 June 2016, explained the report.
PHD’s receivables stood at EGP 9 billion at the end June, these receivables are expected to be collected over the coming eight years.
“Out of conservatism, we assume an impairment loss of 25% annually. This translates into our receivables Fiar Value (FV) of EGP 1.73, the largest contributor to our total FV of EGP 3.47,” indicated the report.
The FV of EGP 3.47 per share is divided among development projects (EGP 1.06), receivables (EGP 1.73), hotels and club (EGP 0.11), commercial land (EGP 0.62), and raw land (EGP 1.01).
“We believe the market is not discounting the firm’s raw land plots,” the report concluded.
