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Distressed timber fund makes £5m tender offer

Distressed timber fund makes £5m tender offer | Timberland Investment | Scoop.it

Cambium Global Timberland has launched a tender offer to buy around a fifth of its shares in the first return of capital since investors voted to wind up the AIM-listed company nearly two years ago.

The £23 million timber fund has been a major disappointment for shareholders, losing 71% since floating on the Alternative Investment Market (AIM) in 2007.

Last October it sacked its investment manager CP Cogent and made Robert Rickman, a non-executive director and qualified forester, operations manager. The following month it slashed its net asset value (NAV) from 40p to 33p per share as it began to value its assets on a ‘held for sale’ basis and was hit by poor market conditions in Brazil and the strength of the dollar.

Cambium is looking to return around £5 million to its long-suffering investors by purchasing 20 million shares at 25p per share. The purchase price is 16.3% higher than the closing level of the shares at 31 December, although it is a big discount to the NAV.

When Cambian got shareholder approval in February 2013 to wind up operations it warned disposing of all its assets could last up to four years.

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Cambium Global Timberland FY pretax loss widens

Cambium Global Timberland FY pretax loss widens | Timberland Investment | Scoop.it

Cambium Global Timberland Limited's full-year pretax loss blew out to £10.7 million, from a loss of £4.2 million. Revenue was £0.3 million, from £1.4 million.


The Group's NAV at April 30 was 59p a share, from 67p a year earlier.


"The NAV of the Group was impacted by reductions in timberland values and in company level expenses. During the fiscal year, currency movements had a positive impact on NAV. Total returns for the year were -11.4%," the company said in a statement. The timber portfolio contributed -10.9% to the return over the twelve months. The reduction in value was primarily due to a decrease in land and tree value in Australia and to both properties in Brazil. One of the adjustments in Brazil was made for tree mortality that impacted approximately 1,300 acres of plantation in Tocantins. The other impacted the plantation in Minas Gerais and was caused by a decrease in timber and land valuations.


Sterling depreciation during the period covered by this Annual Report contributed 1.7% to the return and company expenses -2.2%.

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Investment Trust Insider: dead wood - why it's time to chop CambiumTimberland

Investment Trust Insider: dead wood - why it's time to chop CambiumTimberland | Timberland Investment | Scoop.it

It would be fair to say the existing managers have been disappointing – net asset value has fallen by a third since the fund was launched five years ago. To some extent, they have been accident-prone but it looks as though there might be a problem with the business model as well.

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Cambium Global Timberland sells 8,065 acres in Georgia for $9.1 million

Cambium Global Timberland sells 8,065 acres in Georgia for $9.1 million | Timberland Investment | Scoop.it

In line with the Cambium Global Timberland's stated strategy for the orderly disposal of its assets, contracts have been exchanged for the sale of the Company's 8,065 acre property in Stewart CountyGeorgia, for a gross cash consideration of $9.1 million. Completion is expected to take place on 26 June, 2014, as the company said in the press release received by Lesprom Network.


The net proceeds of sale from this disposal and the disposal of Clinch County previously announced will be applied in discharging associated indebtedness of some $6.2 million. Surplus cash remaining after providing for working capital requirements will be made available to shareholders and another announcement will be made in due course following further consultation with shareholders.


The Stewart County property was marketed alongside the Clinch County property. The sale price represents 91% of the 31 October 2013 carrying value of the Stewart County asset.


Sam Radcliffe's insight:

As usual, the arithmetic: $1,128 per acre, quite a bit lower than other recent sales of timberland in the US South, but we do not know any details of the deal.

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Cambian Global Timberland completes Florida land sale

Cambian Global Timberland completes Florida land sale | Timberland Investment | Scoop.it

Cambian Global Timberland has completed the sale of 13,810 acres of land in Florida.


Estimated proceeds net of transaction costs and a loan prepayment fee will be $15.4m, representing 97% of the 31 October third-party appraisal.

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