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Wheeler Real Estate Investment Trust, Inc. (WHLR)

NasdaqCM - NasdaqCM Real Time Price. Currency in USD
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2.0500+0.0200 (+0.99%)
At close: 04:00PM EDT
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  • r
    ryan
    Train wreck continues, anything good other than debt reduction I'm missing? Where did the B shares go? non-operating expenses of $691 thousand due to legal settlement costs
  • J
    Just Me
    So what’s next? Assuming cdr deal closes does anyone think they will leverage all (they can borrow 30mm on just whlr assets) the assets (assuming key allows it) to try a giant pref tender of all the prefs?
  • J
    Just Me
    16k volume on b today..wonder why the sudden interest?
  • M
    Matt
    Ouch! CDR pfds getting demolished. I feel as bad for CDR pfd holders as I do for...well, WHLR pfd holders!
  • g
    gtw
    Some review.

    On ownership,
    Eidelman Virant Capital, Inc. owns 686,687 shares of common, or 7.1% of class.
    Steamboat Capital Partners, LLC (an investment fund managing more than $482 million ran by Jeffrey Rose) owns 1,323,044 shares.
    Couple this with Khoshaba and Stillwell, there are a small number of owners who can get together over coffee and decide the path of the company. Of course those who serve as officers do have fiduciary duties to all the common holders. But they must have a plan. Hard to believe that they would just invest as semi-passive investors.

    As to the tender offer to buy shares,
    Price is settling down on the D preferred, and more so on the B preferred. This might be natural, or might be in some part a result of the tender not being done. Maybe for a decent reason, but not a strong reason for it not being done, but delayed to add another $1m to the tender money pool.

    There might be a sense with such an oversubscription to the tender that the D preferred shares actually purchased will be at a price well under $18, and so that would be a benchmark for value. There may be D preferred shareowners who really do want to sell who will reduce their offer price submitted to the tender.
  • g
    gtw
    Making sense of the JCP lawsuit.

    5/3/18 an amendment was adopted by Wheeler to terms of the "D" preferred. New language is: "If the Corporation fails to maintain asset coverage of at least 200% calculated by determining the percentage value of (i) the Corporation’s total assets plus accumulated depreciation and accumulated amortization minus the Corporation’s total liabilities and indebtedness as reported in the Corporation’s financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) in proportion to the "aggregate liquidation preference" [then redemption of "D" shares can be demanded]."

    The component of "plus accumulated amortization" was added to the top line, making the 200% coverage easier to obtain. Certainly this component might have been included originally, but it was not. WHLR just decided to add it by amendment to get off the hook. If all along it was the intent to have this term in there they could have sued their attorneys for malpractice for the error of omission. Or it could be that they came up with this amendment as a contrivance to avoid the consequences for poor performance.

    JCP filed a lawsuit on June 28, 2018. In February 2020, the parties reached a settlement and JCP dismissed the lawsuit without prejudice. Apparently the settlement did not hold and JCP filed suit again, apparently in early 2021.

    I wonder if the same attorneys who perhaps messed up the original terms of the "D" are not involved now in all these amendments. It keeps the flashlight beam off of them.

    And it seems that once they got the idea that an amendment a year can make the pesky preferred shareholders go away, they have gone wholesale wild in trying to undermine the rights of the "B" shareholders. It might also be that the unpaid "B" dividends affect the 200% coverage calculation. Make that liability at least seem to go away and the ratio is better.

    Management probably could settle this. Offer $5 and 5 shares of WHLR per WHLRD share and start crawling out of the hole. But management and maybe its attorneys have painted themselves into a corner, so who knows how this will shake out.

    Thank goodness that JANAF is probably worth a good deal more than it is carried on the books for.
  • g
    gtw
    No commentary about how the preferred shares are floating up?

    General optimism I suppose. While the market values the D preferred more than the B, and for some reason, I was reminded today of a strength of the B, which has a nominal dividend of 9% of par and is " not redeemable at the issuer's option at any time, and with no stated maturity." It is not callable. There can be a forced redemption if the common trades much much higher than it does now. So forget that unlikely forced conversion and you have a perpetual 9% payer if the preferred B becomes healthy. That would be sweet. Of course the management will be dealing with an unhealthy company (in reality and/or in appearance) and try to take out the B at a discount. In reality management needs to deal with the B to get the company healthy. Sure the D will take priority, but cashing out the B has to be on management's long term agenda as well.

    Management erred in not taking out much more of the D that was on offer at $15. They probably will only get one more bite at the apple to take out preferred shares at around half of supposed value (par and accrued dividends). Until they can raise money they will do what they can to keep the preferred share price down.
  • J
    Just Me
    “Alluvial Capital Management, in their Q1 2021 investor letter, mentioned Wheeler Real Estate Investment Trust, Inc. (NASDAQ: WHLR), and shared their insights on the company. Wheeler Real Estate Investment Trust, Inc. is a Virginia Beach, Virginia-based commercial real estate investment company that currently has a $40.9 million market capitalization. Since the beginning of the year, WHLR delivered a decent 52.35% return, impressively extending its 12-month gains to 217.29%. As of April 30, 2021, the stock closed at $4.22 per share.
    Here is what Alluvial Capital Management has to say about Wheeler Real Estate Investment Trust, Inc. in their Q1 2021 investor letter:
    "Alluvial’s special situations continue to develop positively. Wheeler REIT reported growth in net operating income in the fourth quarter. The company replaced some high-cost debt with cheaper, longer-maturity debt and completed a tender offer for Series D Preferreds. The company has announced a second, larger tender offer for additional preferred shares. Wheeler still faces challenges, but the preferred stock remains well-covered by Wheeler’s asset value and cash flows. I expect continued progress as the year goes on and foot traffic increases at Wheeler’s properties. Wheeler Series D Preferreds are up modestly from our purchase price, while dividends continue to accrue."
  • J
    Just Me
    Effective as of July 5, 2021, Daniel Khoshaba has tendered his resignation, for personal reasons, as the President and Chief Executive Officer of Wheeler Real Estate Investment Trust, Inc. (the “Company”) and as a member of the Company’s Board of Directors (the “Board”), including his membership on the Executive Committee of the Board. In accepting his resignation, the Board recognized Mr. Khoshaba’s achievements during his tenure in presiding over a significant turnaround in the Company and positioning it for further growth. Effective as of July 5, 2021, Mr. Khoshaba will also no longer stand for re-election to the Board at the Company’s upcoming Annual Meeting of Stockholders scheduled for July 15, 2021.
    M. Andrew Franklin, the Company’s Chief Operating Officer, has been appointed as interim Chief Executive Officer with immediate effect.
  • J
    Just Me
    Doesn’t surprise me WHLR is up 10% today.. (unlike CBL) they are ALREADY on the road to recovery with a “new” laser beam focus on improving the balance sheet and deleverage.. I’m expecting the revere loan, senior notes and key overadvance to be paid off by yr end if not sooner and pref div to restart in Q4...
  • J
    Just Me
    10Q out 36mm cash plus 35mm restricted..but is it really restricted (for D redemption?)? “• $35.67 million held in lender reserves for the purpose of tenant improvements, lease commissions, real estate taxes, insurance and funds held for redemption of Series D Preferred at September 30, 2021
  • J
    Just Me
    So am I understanding this correctly 1.467 m wanted to tender but they only bought 387k at 15.5 ? “Company has accepted for purchase 387,097 Series D Shares at a purchase price of $15.50 per share, for an aggregate cost of $6,000,000” what are they doing with the new 35m try another D tender ?
  • J
    Just Me
    $30m rights offering of new notes “Although we have no current specific plan for the proceeds of this Rights Offering, we intend to use the net proceeds of this Rights Offering for one or more of the following: repurchases of our Series D Preferred Stock; repurchases of our Series B Preferred Stock; repayment of our outstanding indebtedness; purchases of real estate assets; or working capital”
  • J
    Just Me
    Wow big increase in number authorized common (paying bond interest in D is no surprise) ..”Prior to this Amendment, the Company had the authority to issue 33,750,000 shares, consisting of 18,750,000 shares of Common Stock and 15,000,000 shares of Preferred Stock, without par value per share (“Preferred Stock”).
    After this Amendment, the Company has the authority to issue 215,000,000 shares, consisting of 200,000,000 shares of Common Stock and 15,000,000 shares of Preferred Stock.
    The Articles of Amendment became effective upon filing on November 29, 2021.
    The foregoing description of the Articles of Amendment is a summary and is qualified in its entirety by the terms of the Articles of Amendment, a copy of which is
    filed as Exhibit No. 3.1 to this Current Report on Form 8-K and incorporated by reference into this Item 5.03. Item 8.01. Other Events.
    Interest on the Company’s 7.00% Senior Subordinated Convertible Notes due 2031
    On November 18, 2021, the Board determined that interest on the Company’s 7.00% Senior Subordinated Convertible Notes due 2031 (the “Notes”) payable on December 31, 2021 to holders of record at the close of business at 5:00 p.m., New York City time, on December 1, 2021, of the Company’s Notes, shall be in the form of the Company’s Series D Cumulative Convertible Preferred Stock.
  • J
    Just Me
    Did anyone else catch this? Tender round 2? “(d) Notices. The Administrative Agent shall have received a Notice of Borrowing pursuant to Section 2.02 hereof directing payment of $18,834,233 of the Loan proceeds, which are not expected to be applied in the initial Series D Redemption, into the Backup Account and a flow funds which is otherwise satisfactory to the Lenders”
  • A
    Anonymous
    Is everyone paying attention to the litigation filed a few days ago by JCP Partnership?

    On March 22, 2021, the Reporting Persons filed a Complaint for Declaratory and Injunctive Relief and Damages (the “Complaint”) against the Issuer and controlling persons of the Issuer in the United States District Court for the District of Maryland to seek to halt the Issuer’s attempt to unilaterally amend the Articles Supplementary in order to avoid the mandatory redemption of certain shares of the Issuer’s preferred stock, including the Shares, required by the Asset Coverage Provision. In addition, the Complaint states that the plaintiffs believe that the Issuer and its control persons have violated Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Rule 10b-5 under the Exchange Act through their acts and omissions with respect to the Shares. The Complaint requests that the court enjoins the Issuer from continuing to violate the Articles Supplementary, compels the Issuer to redeem the Shares in accordance with the Articles Supplementary and awards the Reporting Persons certain monetary damages.
  • g
    gtw
    Some review here.

    Khoshaba owns 1.07m common shares. I think he owns some preferred shares too, but cannot see what now.

    Stillwell's last report shows him (or his controlled companies), owning 1.18m common shares.

    Stillwell owns outright some 63,066 of the Preferred D.

    He controls much more through SAI. SAI entered a "Swap Agreement") where it purchased certain cash-settled swaps (the "Swaps") constituting economic exposure to notional shares of Series B Stock and Series D Stock with maturity dates of March 1, 2022. This provides SAI with economic results that are comparable to the economic results of ownership, but does not provide SAI with the power to vote or direct the voting or dispose of or direct the disposition of the shares of Series B Stock and Series D Stock.

    He has settled swaps for 79,642 of Preferred B, and 453,281 of preferred D.

    The value of the common he holds is ~$3.5M
    The value of the preferred he controls or owns is:
    D: $7.75M
    B: $.8M

    Stillwell is putting more investment into the preferred shares than common shares. It may be that the swap agreement for preferred shares keeps him okay on REIT rules, while he could not make such a big investment into the common.

    Stillwell obviously believes that the preferred D is more valuable than the preferred B.
  • J
    Just Me
    Road to recovery and Why I think the sp will double soon.. (prefs are the best bet now)
    1. The Aldi deal is great, they'll get 20k sq. ft. new rent
    2. They paid off the Revere loan
    3. Paid off Bulldog loan
    4. Mo interest exp will go down a lot (very high rates loans 10%,
    5 asset dispositions are at gains.
    6 finally dealt with and Wrote off Sea Turtle bomb
    7 They are supposed to have the higher rate KeyBank acquisition loan To 0 by yr end via refi w lower rate Mtg (but company does have an option to renew). guessing financing is 100 bps above what they can get on mortgages.
    8. If so will have ZERO non property level debt in 90 days
    9 Cash flows will probably increase over the next 12 months from debt pay down and some new tenants
    10 HOPING for some pref div to restart in Q4 ...
  • J
    Joe
    WHLRD summary:
    - $25.00 liquidation preference per share
    - regular cumulative cash dividends at a fixed annual amount of $2.1875 per share
    - as of 01/01/2019 accumulating dividends at $2.6875 per share and will continue to accumulate dividends at this rate until all accumulated dividends have been paid

    Basically every WHLR Preferred D share accumulates dividends equivalent to 2 shares of WHLR Common at $1.30.

    +++

    TL;DR version from the filings:

    WHLR Series D Preferred Stock - Redeemable Preferred Stock

    At March 31, 2020 and December 31, 2019, the Company had 3,600,636 issued and 4,000,000 authorized shares of Series D Cumulative Convertible Preferred Stock, without par value ("Series D Preferred") with a $25.00 liquidation preference per share, or $104.08 million and $101.66 million in aggregate, respectively. Until September 21, 2023, the holders of the Series D Preferred are entitled to receive cumulative cash dividends at a rate of 8.75% per annum of the $25.00 liquidation preference per share (equivalent to the fixed annual amount of $2.1875 per share) (the “Initial Rate”). Commencing September 21, 2023, the holders will be entitled to cumulative cash dividends at an annual dividend rate of the Initial Rate increased by 2% of the liquidation preference per annum on each subsequent anniversary thereafter, subject to a maximum annual dividend rate of 14%. Dividends are payable quarterly in arrears on or before January 15th, April 15th, July 15th and October 15th of each year. On or after September 21, 2021, the Company may, at its option, redeem the Series D Preferred, for cash at a redemption price of $25.00 per share, plus an amount equal to all accrued and unpaid dividends, if any, to and including the redemption date. The holder of the Series D Preferred may convert shares at any time into shares of the Company’s Common Stock at an initial conversion rate of $16.96 per share of Common Stock. On September 21, 2023, the holders of the Series D Preferred may, at their option, elect to cause the Company to redeem any or all of their shares at a redemption price of $25.00 per share, plus an amount equal to all accrued and unpaid dividends, if any, to and including the redemption date, payable in cash or in shares of Common Stock, or any combination thereof, at the holder’s option.

    Dividends on the Series D Preferred cumulate from the end of the most recent dividend period for which dividends have been paid. Dividends on the Series D Preferred cumulate whether or not (i) we have earnings, (ii) there are funds legally available for the payment of such dividends and (iii) such dividends are authorized by our Board of Directors or declared by us. Dividends on the Series D Preferred Stock do not bear interest. If the Company, fails to pay any dividend within three (3) business days after the payment date for such dividend, the then-current dividend rate increases following the payment date by an additional 2.0% of the $25.00 stated liquidation preference per share, or $0.50 per annum, until we pay the dividend, subject to our ability to cure the failure. On December 20, 2018, the Company suspended the Series D Preferred dividend. As such, the Series D Preferred shares began accumulating dividends at 10.75% beginning January 1, 2019 and will continue to accumulate dividends at this rate until all accumulated dividends have been paid.

    Holders of shares of the Series D Preferred have no voting rights. Pursuant to the Company’s Articles Supplementary, if dividends on the Series D Preferred are in arrears for six or more consecutive quarterly periods (a “ Preferred Dividend Default”), the number of directors on our Board of Directors will automatically be increased by two, and holders of shares of the Series D Preferred and the holders of Series A Preferred and Series B Preferred (the Series A Preferred and Series B Preferred together, being the “Parity Preferred Stock”), shall be entitled to vote for the election of two additional directors (the “Series D Preferred Directors”). A Preferred Dividend Default occurred on April 15, 2020. The election of such directors will take place upon the written request of the holders of record of at least 20% of the Series D Preferred Stock and Parity Preferred Stock. The Board of Directors is not permitted to fill the vacancies on the Board of Directors as a result of the failure of the holders of 20% of the Series D Preferred Stock and Parity Preferred Stock to deliver such written request for the election of the Series D Preferred Directors. The Series D Preferred Directors may serve on our Board of Directors, until all unpaid dividends on such Series D Preferred and Parity Preferred Stock, if any, have been paid or declared and a sum sufficient for the payment thereof set apart for payment.

    https://www.sec.gov/Archives/edgar/data/1527541/000152754120000031/a3312020whlr10-q.htm
    Document
    www.sec.gov
    Bullish
  • J
    Just Me
    VERY good news...”VIRGINIA BEACH, Va., Jan. 29, 2020 (GLOBE NEWSWIRE) -- Wheeler Real Estate Investment Trust, Inc. (NASDAQ:WHLR) (“Wheeler” or the “Company”), a fully-integrated, self-managed commercial real estate investment company focused on owning and operating income-producing retail properties with a primary focus on grocery-anchored centers, today announced that it has reduced the balance on the Company’s KeyBank line of credit below $10 million.
    “This is another deliberate step in reducing the carrying balance on our KeyBank line of credit, which has been reduced from $68 million since we began our strategic transformation in January 2018,” stated David Kelly, President and CEO. “This refinancing demonstrates our commitment to reducing our overall debt and the strong relationship we have with KeyBank to help us reach our stated goals of creating a solid, flexible balance sheet.”
    The Company obtained a 5-year fixed rate term loan with Citibank® for $6 million at an interest rate of 4.45%, which is approximately 84 basis points below the current interest rate on the Company’s KeyBank line of credit as of December 31, 2019. The new loan is secured by the Shoppes at Myrtle Park, a 56,601 square-foot shopping center located in South Carolina, which was previously encumbered on the Company’s KeyBank line of credit.
    In addition, the Company sold St. Matthews, a 29,015 square-foot shopping center in South Carolina for approximately $1.78 million. The proceeds of the sale have been used to pay down the KeyBank line of credit.
    These transactions, along with the Company’s January principal payment, have reduced the KeyBank line of credit balance below $10 million, which meets the January 31, 2020 deadline and complies with the second amendment agreed upon with the lender on January 24, 2020.
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