Business
Mongolia Growth Group Ltd. Publishes May 2013 Monthly Letter to Shareholders
Mongolia Growth Group Ltd. Publishes May 2013 Monthly Letter to Shareholders Ulaanbaatar, MO...
About this update from Mongolia Growth Group Ltd.
[{"type":"text","content":"Mongolia Growth Group Ltd. Publishes May 2013 Monthly Letter to ShareholdersMongolia Growth Group Ltd. Publishes May 2013 Monthly Letter to Shareholders\nUlaanbaatar, MONGOLIA, June 25, 2013 /FSC/ - Mongolia Growth Group Ltd. (YAK - TSX Venture),is pleased to announce the release of its May 2013 letter to shareholders.\nMay 2013 Shareholder Letter\nTo the Shareholders of Mongolia Growth Group Ltd.,\nDuring May of 2013, MGG purchased one retail asset and did not sell any property assets. We are still actively involved in researching a number of sizable property assets that we are looking to purchase, but there can be no certainty that we will be able to agree on acceptable terms for a transaction. \nDuring the month of May, management undertook a thorough review of all of our assets with the view of reducing our costs and eliminating certain assets that are either too small, outside of our core competencies in downtown Ulaanbaatar commercial property or too difficult to manage. In total, we have selected 23 property assets comprising approximately 27% of our total assets by number, 16% of our portfolio at cost and contributing 13% of our monthly rental revenue to dispose of. Despite producing a moderate portion of our total revenue, the expenses involved in managing these assets means that the actual net operating income produced by them is quite negligible as a percentage of our total property net operating income. We anticipate re-deploying this capital into one or two larger assets in the future that will have much more attractive return characteristics. In particular, disposing of these assets will almost entirely remove us from the ownership of residential properties with the exception of those assets that are owned for employee housing. It is expected that the majority of these sales will be completed by year end and that the company will show a gain on sale for the majority of the assets. \nIn addition, as a consequence of this review, MGG is assessing the amount of management time and cost required to administer Mandal, our insurance subsidiary together with the likelihood of profitability from Mandal in the near term, given the substantial costs of it being part of a public company with public company reporting obligations.  Thus far, all indications are that MGG would substantially reduce recurring expenses an...