Notice of EGM

RNS Number : 6558F

UK Commercial Property Trust Ltd

15 January 2010

 

UK COMMERCIAL PROPERTY TRUST LIMITED

RIS ANNOUNCEMENT

15 January 2010

PROPOSED PLACING AND OFFER FOR SUBSCRIPTION

Introduction

On 21 December 2009, the Board of UK Commercial Property Trust Limited (the "Company") announced that it was considering with its advisors a proposed equity capital raising the net proceeds of which would be used to fund the acquisition of further commercial properties in accordance with the Company's investment policy. After consulting with its largest shareholders, the Company has today published a circular to Shareholders (the "Circular") in connection with the proposed placing (the "Placing") and offer for subscription (the "Offer") of up to 195 million new Ordinary Shares at a price of 77.1p per Share (being a premium of 6 per cent. to the Adjusted NAV per Share as at 31 December 2009) in order to raise gross proceeds of up to £150 million.

Further details of the terms of the Placing and Offer are set out below.  Defined terms used in this announcement have the meanings given below.

Background to and reasons for the Issue

Since the issue of Shares in connection with the acquisition of a portfolio of properties by the Company in October 2009, the Group has sold properties at Bracton House, 34/36 High Holborn, London for consideration of £9,815,000 and at 5/7 Chancery Lane, London for consideration of £49,300,000. The Group has also entered into negotiations in relation to the proposed acquisition of three shopping centres in the same location for an aggregate purchase price of approximately £60 million and an initial yield of approximately 7 per cent. The Company has approximately £14 million of cash, including borrowings, available for investment (excluding funds required for investments currently under negotiation and capital expenditure). The Board and the Investment Manager believe that there remain a number of opportunities to acquire further commercial properties of a similar quality to the Group's existing Property Portfolio and the Company wishes to raise additional capital to do so.

The Board believes that the Issue offers the opportunity for the Company to acquire further commercial properties which should improve the prospects for income and capital growth in the Property Portfolio and diversify further the Property Portfolio, and which will provide the benefits of an increase in the size of the Group. In particular, the Directors believe that, if implemented, the Issue should:

(i)    enable the Company to further enhance the overall investment characteristics of the Property Portfolio;

(ii)    further diversify risk in the Property Portfolio;

(iii)    enable the Company to target or increase its exposure to different sub-sectors of the commercial property market;

(iv)    increase income returns over the medium term; and

(v)    reduce the total expense ratio of the Group.

Details of the terms of the Issue

Under the Placing and Offer, the Company is proposing to issue up to 195 million new Ordinary Shares to raise gross proceeds of approximately £150 million.  The Issue Price of 77.1p per new Ordinary Share represents a premium of 6 per cent to the Adjusted NAV per Share as at 31 December 2009.  The net proceeds of the Placing and Offer will, together with the Group's existing cash resources and any further draw downs made under the Bank Facility, be used to acquire further UK commercial properties in accordance with the Company's investment policy.

G&N Collective Funds Services Limited is arranging the Placing with certain institutions, discretionary investment managers and other financial intermediaries.  The Placing is not underwritten.

PALAL, a Pearl Group Company, has indicated its intention to subscribe for new Ordinary Shares with an aggregate Issue Price of at least £50 million and, depending on demand from other investors, potentially up to a maximum of £100 million pursuant to the Placing.  No more than 75 per cent. of the new Ordinary Shares issued pursuant to the Placing and Offer will be issued to Pearl Group Companies.  In the event that the Placing and Offer is oversubscribed and PALAL has committed to subscribe for new Ordinary Shares with an aggregate Issue Price in excess of £50 million, the number of shares issued to PALAL pursuant to the Placing can be scaled back provided that PALAL will be issued new Ordinary Shares with an Issue Price of at least £50 million.

The Company expects to publish a prospectus (the "Prospectus") in relation to the Issue during the week commencing 18 January 2010.  An announcement will be released when the Prospectus is published. Copies of the Prospectus will be available following publication from the offices of Dickson Minto W.S., Royal London House, 22/25 Finsbury Square, London EC2A 1DX and Northern Trust International Fund Administration Services (Guernsey) Limited, Trafalgar Court, Les Banques, St. Peter Port, Guernsey GY1 3QL.  It is expected that the latest time and date for applications under the Offer will be 3.00 p.m. on 5 February 2010 and that the latest time and date for commitments under the Placing will be 5.00 p.m. on 5 February 2010. The expected time and date of Admission is 8.00 a.m. on 11 February 2010 when dealings in the new Ordinary Shares would commence.

Costs and expenses of the Issue

It is expected that the costs and expenses of the Placing and Offer will be approximately £2.20 million (on the assumption that the Issue is fully subscribed).  In the event that the Placing and Offer is not implemented these costs and expenses will be limited to approximately £180,000.

Related Party Transaction

As at the date of this announcement, the Pearl Group Companies own 715,637,025 Ordinary Shares representing approximately 72.28 per cent. of the issued share capital of the Company (excluding Shares held by the Company in treasury). As the Placing and Offer involve PALAL, a Pearl Group Company, subscribing for new Ordinary Shares with an aggregate Issue Price of up to £100 million, the issue of Shares to PALAL is a related party transaction for the purposes of the Listing Rules. Therefore, as required by the Listing Rules, the issue of new ordinary shares to PALAL is conditional upon the approval of Independent Shareholders (being Shareholders other than the Pearl Group Companies). Following the Placing and Offer and on the assumption that 130 million new Ordinary Shares are issued to PALAL pursuant to the Placing and that the Issue is fully subscribed, Pearl Group Companies will own approximately 71.36 per cent. of the issued share capital of the Company (excluding Shares held by the Company in treasury).

The Company has agreed to pay the Investment Manager an additional fee on completion of the Issue of £250,000 and a commission of 0.85 per cent. of the gross proceeds of the subscription by PALAL for new Ordinary Shares pursuant to the Placing.

Dividends

The Company expects to declare a fourth interim dividend in respect of the period from 30 October 2009 to 31 December 2009, with an ex dividend date of 3 February 2010 which will be paid in February 2010. It is expected that the fourth interim dividend will be 0.9p per Share.  Existing Shareholders will qualify for the payment of this fourth interim dividend in respect of their existing holdings of Ordinary Shares. New Ordinary Shares issued pursuant to the Placing and Offer will not qualify for this fourth interim dividend.

It is intended that the first interim dividend in respect of the three month period from 1 January 2010 to 31 March 2010, which was expected to be paid in May 2010, will be split into a first interim dividend (in respect of the period from 1 January 2010 to 10 February 2010 (the day prior to the expected date of Admission)) and a second interim dividend (in respect of the period from 11 February 2010 (the expected date of Admission) to 31 March 2010) both of which will be paid on the same day in May 2010.

Existing Shareholders will qualify for the payment of the first interim dividend and the second interim dividend in respect of any existing holdings of Ordinary Shares. New Ordinary Shares issued pursuant to the Placing and Offer will only qualify for the second interim dividend. The respective amounts of the first interim dividend and the second interim dividend will reflect the fact that the new Ordinary Shares will be issued part way through the first quarter of the Company's financial year ending 31 December 2010.

Save as referred to above, the new Ordinary Shares will rank pari passu in all respects with the existing Ordinary Shares.

Extraordinary General Meeting

The Related Party Transaction is conditional on the approval by Independent Shareholders. An Extraordinary General Meeting of the Company has been convened for 11.00 a.m. on 10 February 2010 at Trafalgar Court, Les Banques, St. Peter Port, Guernsey GY1 3QL.  An ordinary resolution will be proposed at the Extraordinary General Meeting to approve the Related Party Transaction.  If the Resolution is not approved by a majority of the Independent Shareholders, the Placing and Offer will not be implemented.

Dealings in new Ordinary Shares

It is expected that the new Ordinary Shares will be issued and admitted to listing, and dealings in such shares will commence, on 11 February 2010. 

Availability of Circular

A copy of the Circular has been submitted to the FSA and will shortly be available for inspection at the FSA's Document Viewing facility which is situated at:

Financial Services Authority
25 The North Colonnade
Canary Wharf
London E14 5HS

Tel. [phone]

Copies of the Circular are also available from the offices of Dickson Minto W.S., Royal London House, 22/25 Finsbury Square, London EC2A 1DX and Northern Trust International Fund Administration Services (Guernsey) Limited, Trafalgar Court, Les Banques, St. Peter Port, Guernsey GY1 3QL.

All enquiries

Douglas Armstrong, Dickson Minto WS - 020 7649 6823

Nigel Russell/Graeme Reaves. G&N Collective Funds Services Limited

0131 226 4411

Robert Boag, Ignis Investment Services Limited 0141 222 8000

Dickson Minto W.S., which is authorised and regulated by the Financial Services Authority, is acting for the Company and for no-one else in connection with the contents of this announcement and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Dickson Minto W.S., or for affording advice in relation to the contents of this announcement or any matters referred to herein. 

Definitions

The following definitions apply throughout this announcement unless the context requires otherwise:

"Adjusted NAV per Share" means 72.7p being the NAV per Share on 31 December 2009 including all income to that date but after deduction of the dividend per Share accrued in respect of the period from 30 October 2009 to 31 December 2009 to which the new Ordinary Shares will not be entitled;

"Admission" means admission of the new Ordinary Shares to the Official List and to trading on the London Stock Exchange;

"Bank Facility" means the £80 million revolving loan facility provided to the Company by Lloyds TSB Scotland plc pursuant to the Facility Agreement;

"Board" or "Directors" means the directors of the Company;

"Company" means UK Commercial Property Trust Limited, a company incorporated in Guernsey with registered number 45387;

"Existing Shareholders" means registered holders of Ordinary Shares on the record date for the fourth interim dividend for 2009 and the first interim dividend for 2010 which is expected to be 5 February 2010;

"Extraordinary General Meeting" means the extraordinary general meeting of the Company to be held at 11.00 a.m. on 10 February 2010 at which a resolution will be proposed to approve the Related Party Transaction;

"Facility Agreement" means the facility agreement between, among others, Lloyds TSB Scotland plc and the Company dated 19 June 2008;

"FSA" means the Financial Services Authority;

"Group" means the Company, the Property Subsidiary and any other direct or indirect subsidiary (as that term is defined in the Law) of the Company from time to time;

"Independent Shareholders" means Shareholders other than PLL, PALAL, Ignis Investment Services Limited, any of the Pearl Group Companies, their associates and discretionary clients of Ignis Investment Services Limited;

"Investment Manager" means Ignis Investment Services Limited, a company incorporated in Scotland with registered number SC101825;

"Issue" means the issue of Ordinary Shares pursuant to the Placing and Offer;

"Issue Price" means 77.1p per Ordinary Share (being a premium of 6 per cent. to the Adjusted NAV per Share as at 31 December 2009);

"Law" means The Companies (Guernsey) Law, 2008;

"Listing Rules" means the listing rules made by the Financial Services Authority under the Financial Services and Markets Act 2000 (as amended) as amended from time to time;

"London Stock Exchange" means London Stock Exchange plc;

"NAV"  in relation to a Share, means its net asset value on the relevant date calculated in accordance with the Company's normal accounting policies;

"new Ordinary Shares" means the Ordinary Shares to be issued pursuant to the Issue;

"Offer" or "Offer for Subscription" means the offer for subscription of Ordinary Shares at the Issue Price;

"Official List" means the Official List of the UK Listing Authority;

"Ordinary Shares"  or "Shares" means ordinary shares of 25p each in the capital of the Company;

"PALAL" means Phoenix & London Assurance Limited, a company incorporated in England and Wales with registered number 894616 (a Pearl Group Company); 

"Pearl Group" means Pearl Group, a company incorporated in the Cayman Islands under the Companies Law (2007 Revision) of the Cayman Islands on 2 January 2008 (previously called Liberty Acquisition Holdings (International) Company);

"Pearl Group Companies" means Pearl Group and its subsidiary undertakings (each a "Pearl Group Company");

"Placing" means the placing of Ordinary Shares at the Issue Price;

"PLL" means Phoenix Life Limited, a company incorporated in England and Wales with registered number 1016269 (a Pearl Group Company);

"Property Portfolio" means the direct and indirect property assets of the Group from time to time;

"Property Subsidiary" means UK Commercial Property Holdings Limited, a company incorporated in Guernsey with registered number 45386;

"Resolution" means the ordinary resolution to approve the issue of new Ordinary Shares to PALAL to be proposed at the Extraordinary General Meeting;

"Related Party Transaction" means the proposed issue of new Ordinary Shares with an aggregate Issue price of up to £100 million to PALAL; and

"Shareholders" means holders of the Ordinary Shares.

 

END

 

 

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