T
Jul 9 at 07:28 AM
Frasers Centrepoint Trust: UOB Kay Hian's BUY Call Ignores a Two-Gate Balance Sheet Problem 🦖
FCT just sold White Sands for an 8.4% premium and every broker headline reads like a clean-up win. What caught my eye was not the premium, it was what happened to the balance sheet after sacrificing 6.9% of group NPI to get there. Even after applying roughly S$454 million of net proceeds to repay debt, pro forma gearing only drops from 40% to 36.5%, and interest cover is still stuck below 4 times.
If you hold FCT for retirement income, the yield near 5.4% to 5.6% looks comforting until you line it up against that 36.5% gearing and a 3.59x interest coverage ratio. The White Sands sale buys time, it does not remove the need for further deleveraging if you want your distributions to survive a nasty SORA spike.
📺 YouTube: https://youtu.be/vNUXRt_a0XA
📩 Substack: https://investingiguana.com/p/frasers-centrepoint-trust-uob-kay
The copyright of this article belongs to the original author/organization.
The views expressed herein are solely those of the author and do not reflect the stance of the platform. The content is intended for investment reference purposes only and shall not be considered as investment advice. Please contact us if you have any questions or suggestions regarding the content services provided by the platform.