Placing Announcement

RNS Number : 1076Y

NewRiver Retail Limited

21 January 2014

 



THIS ANNOUNCEMENT IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO.

NewRiver Retail Limited

Proposed Placing of new Ordinary Shares at a Placing Price of 265 pence per Ordinary Share

Proposed Special Interim Dividend of 10 pence per Ordinary Share

Quarterly Dividend Programme

NewRiver Retail Limited (AIM: NRR) ("NewRiver" or the "Company"), the UK REIT specialising in value-creating retail property investment and active asset management, is pleased to announce a proposed placing (the "Placing") of new ordinary shares in the capital of the Company ("Ordinary Shares") at a price of 265 pence per Ordinary Share (the "Placing Price").

Firm commitments in excess of £50 million have been received from certain institutional investors to participate in the Placing and, in aggregate, the Company intends to raise gross proceeds of £75 million.

Liberum Capital Limited ("Liberum") is acting as sole bookrunner in relation to the Placing.

In order to preserve the dividend with respect to the financial year ending 31 March 2014 from dilution as a consequence of the proposed issue of the Ordinary Shares in connection with the Placing (the "Placing Shares"), the Board of the Company intends to pay a special interim dividend of 10 pence per Ordinary Share (the "Special Dividend") which, if paid, will not be payable in respect of the Placing Shares. The quantum of the Special Dividend would, if paid, result in the Company having paid cumulative dividends of 16 pence per Ordinary Share in respect of the financial year ending 31 March 2014. Given the level of cumulative dividends, the Board does not at this point anticipate paying a final dividend in respect of the financial year ending 31 March 2014.

The Company is also pleased to announce that, with effect from the financial year commencing 1 April 2014, the Board intends that the Company should pay dividends quarterly in order to distribute income generated by the Company to investors on a more timely basis. It is anticipated that the first such quarterly dividend would be paid in October 2014.

David Lockhart, Chief Executive of NewRiver Retail, commented:

"We are delighted to announce this fundraise which will provide the Company with significant additional capital to grow the business further. NewRiver has consistently demonstrated its ability to deploy capital effectively through the acquisition of higher yielding assets with significant value-enhancement potential. There are a number of attractive asset opportunities available to the Company and we are confident of deploying the new funds efficiently to drive long-term shareholder value.

"The move to a quarterly dividend structure is testament to our commitment to delivering shareholder returns in the most timely and effective manner. We look forward to welcoming new shareholders on to the register and view the support of our existing shareholders as extremely encouraging."

Details of the Placing

The Directors are proposing to raise £75 million (before expenses) by way of a placing to new and existing shareholders of 28,301,887 Placing Shares at a Placing Price of 265 pence per Placing Share. However, the Directors of the Company, in consultation with Liberum, reserve the right to adjust the final size of the Placing. The Company will update the market in due course as to the final size of the Placing and the timetable for the issue of the Placing Shares.

It is intended that the net proceeds of the Placing will be applied for the purposes of the Company's continuing investment programme.

The Company has today entered into a placing agreement with Liberum (the "Placing Agreement") pursuant to which Liberum has agreed to use its reasonable endeavours to procure institutional and certain other investors (including certain existing shareholders) for the Placing Shares. Firm commitments to subscribe for Placing Shares have been received in excess of £50 million, in aggregate, and Liberum will today commence a wider bookbuilding exercise to determine further demand for participation in the Placing. It is anticipated that the book will remain open until 24 January 2014, but timing of the closing of the book and the final allocation of Placing Shares will be at Liberum's sole discretion, following consultation with the Company. The Placing is not being underwritten.

The Placing will not be structured as a rights issue or open offer and the Placing Shares will not be offered generally to shareholders on a pre-emptive basis. The Placing will be subject to certain resolutions being passed at an extraordinary general meeting of the Company (the "Extraordinary General Meeting") to be convened in due course.

In addition, the Placing is conditional, amongst other things, on:

·      the passing of certain resolutions at the Extraordinary General Meeting by existing shareholders and the waiver of pre-emption rights contained in the Company's articles of incorporation;

·      the Placing Agreement becoming unconditional in all respects and not having been terminated in accordance with its terms prior to admission of the Placing Shares to trading on AIM ("Admission"); and

·      Admission becoming effective by a specified date agreed by Liberum and the Company but being no later than 8.00 a.m. on 14 March 2014.

The Placing Shares are not being made available to the public and are not being offered or sold in any jurisdiction where it would be unlawful to do so.

It is intended that the Placing Shares will not be entitled to receive the Special Dividend, if paid, or the dividend of 6 pence per Ordinary Share announced on 28 November 2013, which is payable by the Company on 31 January 2014 to shareholders on the register as at 10 January 2014. However, the Placing Shares will rank pari passu in all other respects with the Ordinary Shares then in issue and will have the right to receive all dividends and distributions declared in respect of the issued Ordinary Share capital of the Company after Admission.

Dividends

Special Dividend

The Company recognises that the Placing is occurring towards the end of its financial year ending 31 March 2014 but is expected to be completed in advance of the Company's normal timetable for payment of the final dividend in respect of that financial year.

In order to prevent dilution of the final dividend by the issue of the Placing Shares, the Company intends to pay the Special Dividend of 10 pence per Ordinary Share which, if paid, will not be payable in relation to the Placing Shares. The quantum of the Special Dividend would, if paid, result in the Company having paid cumulative dividends of 16 pence per Ordinary Share in respect of the financial year ending 31 March 2014. Given the level of cumulative dividends, the Board does not at this point anticipate paying a final dividend in respect of the financial year ending 31 March 2014.

It is intended that the Special Dividend will be conditional on the passing of resolutions in relation to the Placing at the Extraordinary General Meeting. The Board's formal resolution to pay the Special Dividend, as well as details of the dividend timetable, will be announced in due course along with the posting of the circular convening the Extraordinary General Meeting in relation to the Placing.

Quarterly Dividends

The Company's current dividend practice is, where considered appropriate by the Board and subject to REIT rules, to pay an interim dividend and a final dividend. However, with effect from the financial year commencing 1 April 2014, the Board intends that the Company should pay dividends quarterly. It is anticipated that the first such quarterly dividend would be paid in October 2014. The level of future dividends will be determined by the Board having regard to, inter alia, the financial position and performance of the Company at that time, compliance with Guernsey Law, UK REIT requirements and the interests of shareholders as a whole.

For further information:

NewRiver Retail Limited  David Lockhart, Chief Executive Mark Davies, Finance Director	Tel: [phone]
Bell Pottinger David Rydell/Guy Scarborough/Charlotte Offredi	Tel: [phone]
Liberum (Nominated Adviser, Broker and Sole Bookrunner) Shane Le Prevost/Tim Graham/Simon Atkinson/Jamie Richards Kinmont Gavin Kelly/Mat Thackery	Tel: [phone] Tel: [phone]

The Company (defined above) is a registered closed-ended collective investment scheme registered pursuant to the Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended, and the Registered Collective Investment Scheme Rules 2008 issued by the Guernsey Financial Services Commission ("GFSC").

A registered closed-ended collective investment scheme is not permitted to be offered to the public in Guernsey directly but may be offered to regulated entities in Guernsey or offered to the public by entities appropriately licensed under the Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended. Ordinary Shares shall not be placed directly with the public in Guernsey.

Neither the GFSC nor the States of Guernsey Policy Council take any responsibility for the financial soundness of the Company or for the correctness of any of the statements made or opinions expressed with regard to it.

Liberum Capital Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as nominated adviser and broker to the Company in connection with the matters described in this announcement. Persons receiving this announcement should note that Liberum Capital Limited will not be responsible to anyone other than the Company for providing the protections afforded to customers of Liberum Capital Limited, or for advising any other person on the arrangements described in this announcement.

Kinmont Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as financial adviser to the Company in connection with the matters described in this announcement. Persons receiving this announcement should note that Kinmont Limited will not be responsible to anyone other than the Company for providing the protections afforded to customers of Kinmont Limited, or for advising any other person on the arrangements described in this announcement.

Liberum Capital Limited and Kinmont Limited have not authorised the contents of, or any part of, this announcement and no liability whatsoever is accepted by Liberum Capital Limited or Kinmont Limited for the accuracy of any information or opinions contained in this announcement or for the omission of any information.

No representation or warranty, express or implied, is made by Liberum Capital Limited or Kinmont Limited as to the accuracy, completeness or verification of the information set out in this announcement, and nothing contained in this announcement is, or shall be relied upon as, a promise or representation in this respect, whether as to the past or the future. Liberum Capital Limited and Kinmont Limited do not assume any responsibility for its accuracy, completeness or verification and accordingly each disclaims, to the fullest extent permitted by applicable law, any and all liability whether arising in tort, contract or otherwise which they might otherwise be found to have in respect of this announcement or any such statement.

If you are in any doubt about the contents of this announcement you should consult your accountant, legal or professional adviser or financial adviser. It should be remembered that the price of securities and the income from them can go up as well as down.

No Ordinary Shares have been offered or sold or will be offered or sold to persons in the United Kingdom prior to publication of this announcement except in circumstances which have not resulted in an offer to the public in the United Kingdom within the meaning of section 102B of the FSMA.

This announcement is only addressed to, and the Placing is only directed at, persons in member states of the European Economic Area ("EEA") who are "qualified investors" within the meaning of Article 2(1)(e) of the Prospectus Directive ("Qualified Investors"). This announcement must not be acted or relied upon in any member state of the EEA, by persons who are not Qualified Investors. Any investment or investment activity to which this announcement relates is available, in any member state of the EEA, only to Qualified Investors, and will be engaged in only with such persons. This announcement has been prepared on the basis that all offers of Placing Shares will be made pursuant to any exemption under the Prospectus Directive, as implemented in member states of the EEA, from the requirement to produce a prospectus for offers of Placing Shares. Accordingly, any person making or intending to make any offer within the EEA of or for Ordinary Shares which are not the subject of the Placing contemplated in this announcement should only do so in circumstances in which no obligation arises for the Company or Liberum Capital Limited to produce a prospectus for such Placing. None of the Company or Liberum Capital Limited has authorised, nor do they authorise, the making of any offer of Ordinary Shares through any financial intermediary, other than offers made by Liberum Capital Limited which constitute the final placement of Ordinary Shares contemplated in this announcement.

In the case of any Placing Shares being, or which will be, offered to a financial intermediary as that term is used and defined in section 86(7) of the Financial Services and Markets Act 2000, such financial intermediary will also be deemed to have represented, acknowledged and agreed that the Placing Shares acquired by it, or to be acquired by it, in the Placing have not been acquired on a non-discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer of any Placing Shares to the public other than their offer or resale in a relevant member state to qualified investors as so defined or in circumstances in which the prior consent of the Company and Liberum Capital Limited has been obtained to each such proposed offer or resale. Each of the Company, Liberum Capital Limited and their respective affiliates will rely on the truth and accuracy of the foregoing representation, acknowledgement and agreement.

The Placing Shares are being, or will be, offered (i) outside of the United States to persons who are not U.S. persons as defined in Rule 902(k) of Regulation S ("US Persons") in offshore transactions in reliance on Regulation S under the United States Securities Act of 1933, as amended (the "US Securities Act") ("Regulation S"); and (ii) in the United States to a limited number of "qualified institutional buyers" as defined in Rule 144A under the US Securities Act that are also "qualified purchasers" as defined in Section 2(a)(51) of the United States Investment Company Act of 1940, as amended (the "US Investment Company Act") and the related rules thereunder, in reliance on one or more exemptions from, or in a transaction not subject to, the registration requirements of the US Securities Act and applicable state securities laws and under circumstances that will not require the Company to register under the US Investment Company Act.

The Placing Shares have not been, and will not be, registered under the US Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States. In addition, the Company has not been, and will not be, registered under the Investment Company Act, and investors will not be entitled to the benefits of the Investment Company Act.  Purchasers who are located in the United States or are US Persons will be requested to sign a US Investor's Representations Letter in which they, among other things, will commit to resell the Placing Shares only in an offshore transaction complying with Regulation S or to the Company or a subsidiary thereof.

None of the US Securities and Exchange Commission, any other US federal or state securities commission or any US regulatory authority has approved or disapproved of the Placing Shares nor has any such authority reviewed or passed upon the accuracy or adequacy of this announcement.  Any representation to the contrary is a criminal offence in the United States.

This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any Placing Shares (i) in any jurisdiction in which such offer, invitation or solicitation is not authorised; (ii) in any jurisdiction in which the person making such offer, invitation or solicitation is not qualified to do so; or (iii) to any person to whom it is unlawful to make such offer, invitation or solicitation. The distribution of this announcement and any accompanying announcements, and the offer of the Placing Shares may be restricted by law. Persons into whose possession this announcement and any accompanying announcements come must therefore inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. In particular, no announcement may be distributed, forwarded to or transmitted in, into or from the United States, Australia, Canada, Japan or the Republic of South Africa or to any US person where to do so would breach any applicable law or regulation.

No public offering of the Placing Shares is being made in any jurisdiction. No action has been or will be taken by the Company, or Liberum Capital Limited that would permit the offer of the Placing Shares or possession or distribution of this announcement or any accompanying announcements in any jurisdiction where action for that purpose is required.

The Company may be a "passive foreign investment company" for U.S. federal income tax purposes (a "PFIC") for the current taxable year and future taxable years, which could result in adverse U.S. federal income tax consequences for a "United States person" (as defined for U.S. federal income tax purposes) that owns, or will own, Ordinary Shares.  A non-U.S. corporation, such as the Company, is considered to be a PFIC for any taxable year if either (i) at least 75 per cent. of its gross income for such year is passive income or (ii) at least 50 per cent. of the value of its average quarterly assets, generally determined based on the fair market value of its assets, during such year is attributable to assets that produce or are held for the production of passive income.  For purposes of these tests, passive income generally includes rents and royalties other than rents and royalties that are received from unrelated parties and are derived in the active conduct of a trade or business, dividends, interest, and gains from the sale or exchange of investment property.  If a non-U.S. corporation owns at least 25 per cent. by value of the stock of another corporation, the non-U.S. corporation is treated for purposes of these tests as owning its proportionate share of the assets of the other corporation, and as receiving directly its proportionate share of the other corporation's income.  The Company has not undertaken any determination as to whether it has been a PFIC, currently is a PFIC or may become a PFIC in the future, and the Company currently does not intend to operate in a manner that avoids, or will avoid, its being a PFIC currently or in the future.  If the Company were a PFIC for any taxable year during which a United States person owns Ordinary Shares, various adverse U.S. federal income tax consequences could apply to such United States person, including increased U.S. federal income tax liabilities and reporting obligations.  Certain elections may be available to a United States person that may mitigate the adverse U.S. federal income tax consequences of the Company's being a PFIC.  United States persons should consult their own tax advisors about application of the PFIC rules to an investment in the Ordinary Shares.

 

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