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Small property group Adrenna, which trades at an enormous discount to its minuscule Cape Town-based property portfolio, has taken a surprise turn. As a former (frustrated) shareholder, I had given up on Adrenna, regarding the non-dividend-paying company as a vehicle that probably served directors’ interests better than those of shareholders. Last week the group announced it had agreed to take 2-million preference shares in the East Sydney Day Hospital (ESDH) in Australia for A$2m. I am always a little suspicious of sudden changes in strategic tack, having learnt that (especially among small-cap counters) these are often desperate shifts. Still, it’s worth noting that the ESDH preference shares pay a rather handsome quarterly dividend of 12% a year … and are convertible into ordinary shares within 60 days of the maturity date of February 28 2021. On conversion to ordinary shares, Adrenna should hold an influential 15% of ESDH. The rationale for the transaction is intriguing, with Adr...

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