TIDMSLI
RNS Number : 5320H
Standard Life Invs Property Inc Tst
31 May 2011
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT IS NOT FOR
RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN
WHOLE OR IN PART, IN OR INTO THE UNITED STATES, CANADA, JAPAN, THE
REPUBLIC OF SOUTH AFRICA, AUSTRALIA, NEW ZEALAND OR ANY OTHER
JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.
THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS. THIS
ANNOUNCEMENT DOES NOT CONSTITUTE OR FORM PART OF, AND SHOULD NOT BE
CONSTRUED AS, ANY OFFER FOR SALE OR SUBSCRIPTION OF, OR
SOLICITATION OF ANY OFFER TO BUY OR SUBSCRIBE FOR, ANY SHARES IN
STANDARD LIFE INVESTMENT PROPERTY INCOME TRUST LIMITED OR
SECURITIES IN ANY OTHER ENTITY, IN ANY JURISDICTION, INCLUDING THE
UNITED STATES, NOR SHALL IT, OR ANY PART OF IT, OR THE FACT OF ITS
DISTRIBUTION, FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION
WITH, ANY CONTRACT OR INVESTMENT DECISION WHATSOEVER, IN ANY
JURISDICTION. THIS ANNOUNCEMENT DOES NOT CONSTITUTE A
RECOMMENDATION REGARDING ANY SECURITIES.
ANY INVESTMENT DECISION MUST BE MADE EXCLUSIVELY ON THE BASIS OF
THE FINAL PROSPECTUS TO BE PUBLISHED BY THE COMPANY AND ANY
SUPPLEMENT THERETO IN CONNECTION WITH ADMISSION.
STANDARD LIFE INVESTMENTS PROPERTY INCOME TRUST LIMITED
PROPOSED CONVERSION OF PREFERENCE SHARES AND PLACING AND OPEN
OFFER OF NEW ORDINARY SHARES
31 May 2011
The Board of Standard Life Investments Property Income Trust
Limited today announces proposals to reduce the Company's
structural leverage, to simplify its corporate structure and
potentially to raise additional equity capital.
Summary
-- Conversion of existing unquoted Preference Shares into
Ordinary Shares at a premium of two per cent.
-- A fund raising of up to GBP25 million through a Placing and
Open Offer. In the light of the costs that will be incurred in
investing any cash proceeds of the Placing and Open Offer, the
Ordinary Shares will be issued at a premium of four per cent.
-- Qualifying Shareholders will have a priority right to
subscribe for Ordinary Shares through the Open Offer. There is no
minimum amount to be raised under the Placing and Open Offer and
there is no guarantee that either GBP25 million or significant
additional proceeds will be raised.
-- The Conversion will significantly reduce the structural
leverage of the Company and assist the Board in managing the
funding of the Group in December 2013 when the Bank Facility is due
for repayment and the Preference Shares would otherwise have been
redeemed.
-- The Conversion and Issue will also increase the market
capitalisation of the Company and spread the fixed costs of the
Group over a larger asset base.
-- The Board also intends to increase the quarterly dividend by
3 per cent. to 1.133p per quarter with effect from the quarter
ending 30 September 2011.
-- A circular and a prospectus are expected to be published in
early June setting out the details of these Proposals.
Paul Orchard-Lisle, Chairman of Standard Life Investments
Property Income Trust Limited, commented:
"These Proposals are an important step forward for the Company
as we look to develop. These Proposals will give the Board and the
Investment Manager flexibility to deliver improved returns to
Shareholders. The Board believes that the simplified capital
structure, reduced leverage and increased market capitalisation
will be attractive to existing and new investors."
For further information please contact:
Robin Archibald/Graeme Caton, Winterflood Securities Limited
Tel: 020 3100 0268
Jason Baggaley, Standard Life Investments (Corporate Funds)
Limited
Tel: 0131 245 2833
Gordon Humphries, Standard Life Investments (Corporate Funds)
Limited
Tel: 0131 245 2735
Introduction
The Board of Standard Life Investments Property Income Trust
Limited announces proposals to convert the six million Preference
Shares which are held by Standard Life Assurance into new Ordinary
Shares at a two per cent. premium to the Company's Adjusted NAV per
Share. The Conversion is being proposed by the Board, with the
approval of Standard Life Assurance, in order to increase the net
assets of the Company, to reduce the Group's leverage and to reduce
the funding requirements of the Company in December 2013 when the
Bank Facility is due for repayment and the Preference Shares would
otherwise have been redeemed.
The Board is also proposing an equity capital raising of up to
GBP25 million by means of a Placing and Open Offer. Any net
proceeds will be used to fund the acquisition of further UK
commercial properties in accordance with the Company's investment
policy. It is intended that up to 38.5 million new Ordinary Shares
will be issued under the Placing and Open Offer at a premium of
four per cent. to the Adjusted NAV per Share in order to raise
gross proceeds of up to GBP25 million. The Open Offer is being made
available to all Qualifying Shareholders on a pre-emptive
basis.
The Company will publish a circular and a prospectus in due
course in connection with the Issue and the Conversion, which
constitutes a "related party transaction" for the purpose of
Chapter 11 of the Listing Rules as a result of Standard Life
Assurance being a member of the Standard Life Group which is a
substantial Shareholder in the Company. Further details of the
terms of the Conversion and the Placing and Open Offer are set out
below. Defined terms used in this announcement have the meanings
given below.
It is intended that the Circular and Prospectus will be
published in early June and the General Meeting held in late
June/early July.
It is expected that the Conversion, Placing and Open Offer and
Admission will occur in mid July.
Background to the Issue
The Board believes that the Proposals offer significant benefits
for all Shareholders as noted below.
-- The Conversion would assist the Board in managing the funding
requirements of the Group in December 2013 when the Bank Facility
is due for repayment and the Preference Shares would otherwise have
been redeemed.
-- The Conversion and any proceeds raised under the Issue will
increase the net and gross assets of the Company respectively and
reduce the leverage of the Group.
-- The Issue offers the Company the potential opportunity to
acquire further commercial properties that should enhance the
performance of the Property Portfolio. The Board believes that such
acquisitions should also diversify further the Property
Portfolio.
-- The Proposals significantly increase the market
capitalisation of the Company which should therefore increase
liquidity in the Ordinary Shares.
-- As a result of the Proposals, the fixed costs of the Group
would be spread over a larger asset base and therefore the total
expense ratio of the Group would be reduced.
Related Party Transaction
Standard Life Investments, a member of the Standard Life Group,
holds on behalf of clients of the Standard Life Group 16,644,609
Ordinary Shares representing approximately 14.4 per cent. of the
issued share capital of the Company. The Investment Manager is also
a member of the Standard Life Group. The members of the Standard
Life Group, including Standard Life Assurance, are therefore
related parties, or associates of related parties, of the Company
for the purposes of Chapter 11 of the Listing Rules.
Standard Life Assurance owns the six million issued Preference
Shares which have an aggregate Preference Share Liability as at 27
May 2011, calculated in accordance with the accounting policies of
the Company, of GBP9.3 million. It is proposed that, conditional on
the Related Party Transaction being approved by way of an ordinary
resolution by Independent Shareholders and the Conversion being
approved by way of a special resolution by all Shareholders at the
General Meeting and the Admission Condition being satisfied in
respect of the Conversion, the existing issued Preference Shares
held by Standard Life Assurance will be converted into new Ordinary
Shares. The Preference Shares will be converted into such number of
new Ordinary Shares as have an aggregate value (being the Adjusted
NAV per Share plus a premium of two per cent.) equal to the
prevailing Preference Share Liability on the Conversion Date. The
new Ordinary Shares will rank pari passu with the existing Ordinary
Shares, save that they will not be entitled to the second interim
dividend in respect of the quarter to 30 June 2011 payable in
August 2011.
It is estimated that the accrued Preference Share Liability on
the Conversion Date (assuming Admission is expected to take place
on 15 July 2011) will be GBP9.3 million and therefore approximately
14 million new Ordinary Shares will arise on the Conversion. The
premium of two per cent. referred to above would equate to a
contribution towards the costs of the Conversion and the Issue of
approximately GBP190,000. The Conversion does not involve the
payment of any cash and therefore the Company will not incur the
costs that arise on the investment of cash into commercial
properties that would otherwise arise on the issue of new Ordinary
Shares for cash.
In accordance with the Company's Articles, the Conversion is
also conditional upon the previous sanction of a special resolution
passed at a separate general meeting of the holder of the
Preference Shares. The Company has received an irrevocable
undertaking from Standard Life Assurance to vote in favour of the
special resolution to be proposed at this separate general
meeting.
Details of the terms of the Issue
Under the Placing and Open Offer, the Company is proposing to
issue up to 38.5 million new Ordinary Shares potentially to raise
gross proceeds of approximately GBP25 million. In the light of the
costs that will be incurred in investing the cash proceeds of the
Placing and Open Offer, the new Ordinary Shares will be issued at a
premium of four per cent. to the Adjusted NAV per Share. The net
proceeds of the Placing and Open Offer will be used to acquire
further UK commercial properties in accordance with the Company's
investment policy. There is no minimum amount to be raised under
the Placing and Open Offer and there is no guarantee that either
GBP25 million or significant additional proceeds will be
raised.
The Board will offer the full 38.5 million new Ordinary Shares
on a pro rata basis to Qualifying Shareholders under the Open Offer
(on the basis of one new Ordinary Share for every three Ordinary
Shares held on the Record Date). The new Ordinary Shares will also
be conditionally placed with placees, subject to placing
commitments being clawed back to satisfy valid applications by
Qualifying Shareholders under the Open Offer.
Qualifying Shareholders have the opportunity to make excess
applications, if they wish to do so, up to a maximum amount equal
to five times their Open Offer Entitlement under the Excess
Application Facility, subject to new Ordinary Shares being
available once the applications for pro rata entitlements under the
Open Offer and commitments under the Placing have been taken into
account.
Costs and expenses of the Issue and the Conversion
The costs and expenses of the Issue and the Conversion are
expected to be approximately GBP500,000 (on the assumption that the
Issue is fully subscribed) after deducting the amount of the
premium of the issue of the new Ordinary Shares arising under the
Conversion.
In the event that the Placing and Open Offer is not implemented,
but the Conversion is approved and becomes unconditional, the costs
and expenses would be approximately GBP185,000, after deducting the
amount of the premium on the issue of the new Ordinary Shares
arising under the Conversion, which would equate to approximately
0.16 pence per Ordinary Share.
In the event that neither the Conversion nor the Issue are
implemented the abort costs that would be incurred by the Company
have been limited to approximately GBP200,000, being equal to
approximately 0.17p per Ordinary Share.
Dividends
It is the Board's policy that in paying dividends it should
target a high level of dividend cover. In the absence of unforeseen
circumstances, the Board expects to pay a second interim dividend
of 1.1p in respect of the quarter to 30 June 2011. In the light of
the Investment Manager's success in investing the Company's cash
resources in acquisition opportunities, the Board intends, in the
absence of unforeseen circumstances to increase the quarterly
dividend for the remaining six months of the current financial year
to 1.133p per quarter, an increase of 3 per cent. Although the
investment of the proceeds, if any, of the Issue may reduce
dividend cover in the short term, the Board intends to maintain its
policy of targeting a high level of dividend cover over the medium
term.
General Meeting
The Related Party Transaction is conditional on the approval by
way of an ordinary resolution by Independent Shareholders at the
General Meeting. The Conversion and the Issue are conditional on
the approval by way of special resolutions by all Shareholders at
the General Meeting. The Company has received an irrevocable
undertaking from Standard Life Investments to vote in favour of the
Resolutions to be proposed, other than the resolution to be
approved by Independent Shareholders, at the General Meeting.
It is expected that the Board will convene the General Meeting
of the Company to be held in late June/early July. If the
resolutions in connection with the Related Party Transaction and
the Conversion are not approved neither the Conversion nor the
Issue will 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
or around 15 July 2011.
Definitions
The following definitions apply throughout this announcement
unless the context requires otherwise:
Adjusted NAV per the NAV per Ordinary Share in pence on 30
Share June 2011 including all income to that date
but after deduction of any dividend accrued
to that date to which the new Ordinary Shares
will not be entitled
Admission the admission of the new Ordinary Shares to
the Official List and to trading on the Main
Market
Admission Condition (i) the UKLA having acknowledged to the Company or
its agent (and such acknowledgement not having
been withdrawn) that the application for the
admission of the new Ordinary Shares arising under
the Conversion or the Issue, as the case may be,
to the Official List with a premium listing has
been approved and (after satisfaction of any
conditions to which such approval is expressed to
be subject ("listing conditions")) will become
effective as soon as a dealing notice has been
issued by the Financial Services Authority and any
listing conditions having been satisfied and (ii)
the London Stock Exchange having acknowledged to
the Company or its agent (and such acknowledgement
not having been withdrawn) that the new Ordinary
Shares will be admitted to trading
Application Form the application form for use in connection
with the Open Offer;
Bank Facility the GBP85 million term loan facility provided
to the Company by The Royal Bank of Scotland
plc pursuant to the Facility Agreement
Board or Directors the directors of the Company
Circular the circular to be sent to Shareholders in
connection with the proposed Conversion and
Issue
Company Standard Life Investments Property Income
Trust Limited, a company incorporated in Guernsey
with registered number 41352
Conversion the conversion of the Preference Shares currently
held by Standard Life Assurance into new Ordinary
Shares at a premium of two per cent. to the
Adjusted NAV per Share rounded to two decimal
places
Conversion Date the business day prior to Admission which
is expected to be 14 July 2011
Excess Application the arrangement pursuant to which each Qualifying
Facility Shareholder may apply for new Ordinary Shares in
excess of their Open Offer Entitlement of up to a
maximum amount equal to five times their Open
Offer Entitlement provided they have agreed to
take up their Open Offer Entitlement in full and
such application may be subject to scaling back in
accordance with the provisions of the Prospectus
Excluded Jurisdictions the United States, Canada, Australia, Japan,
New Zealand and the Republic of South Africa
Facility Agreement the facility agreement between, among others,
The Royal Bank of Scotland plc and the Company
dated 4 December 2003
FSA the Financial Services Authority
General Meeting the general meeting of the Company to be held
in late June/early July 2011 at which resolutions
will be proposed to approve the Related Party
Transaction, the Conversion and the Issue
Group 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 Shareholders other than Standard Life Investments,
Standard Life Assurance and any of their
associates or discretionary clients
Investment Manager Standard Life Investments (Corporate Funds)
Limited, a company incorporated in Scotland
with registered number SC111488
Issue the issue of new Ordinary Shares pursuant
to the Placing and Open Offer
Issue Price the price per Ordinary Share under the Placing
and Open Offer equal to a premium of four
per cent. to the Adjusted NAV per Share rounded
to two decimal places
Law The Companies (Guernsey) Law, 2008 as amended
from time to time
Listing Rules the listing rules made by the Financial Services
Authority under the Financial Services and
Markets Act 2000 as amended from time to time
London Stock Exchange London Stock Exchange plc
Main Market the London Stock Exchange's main market for
listed securities being a regulated market
for the purposes of Directive 2004/39/EC the
"Markets in Financial Instruments Directive"
NAV in relation to an Ordinary Share, means its net
asset value on the relevant date calculated in
accordance with the Company's normal accounting
policies
new Ordinary Shares the Ordinary Shares to be issued pursuant
to the Conversion and the Issue including
the Excess Application Facility
Official List the Official List of the UK Listing Authority
Open Offer the proposed invitation by the Company to
Qualifying Shareholders to apply for Ordinary
Shares at the Issue Price and on the terms
and subject to the conditions to be set out
in the Prospectus
Open Offer Entitlement the entitlement of a Qualifying Shareholder
to apply for one new Ordinary Share for every
three Ordinary Shares held by him or her on
the Record Date
Ordinary Shares ordinary shares of 1p each in the capital
of the Company
Overseas Shareholders Ordinary Shareholders with registered addresses
in, or who are resident or ordinarily resident
in, or citizens of jurisdictions outside the
United Kingdom
Placing the placing of Ordinary Shares at the Issue
Price
Preference Shares the six million redeemable zero dividend
preference shares of 25p each in the capital of
the Company
Preference Share the liability attached to the Preference Shares
Liability determined in accordance with the accounting
policies of the Company including the accrued
finance costs
Property Portfolio the direct and indirect property assets of
the Group
Property Subsidiary Standard Life Investments Property Holdings
Limited, a company incorporated in Guernsey
with registered number 41351
Proposals the Conversion and the Issue
Prospectus the prospectus to be published by the Company
in connection with the Placing and Open Offer
and the introduction of the new Ordinary Shares
in connection with the Conversion
Qualifying Shareholders the holders of Ordinary Shares as set out
in the register of members of the Company
at 5.00 p.m. on the Record Date
Record Date the record date for qualification for the
proposed Open Offer being 3 June 2011
Related Party the Conversion, being a "related party
Transaction transaction" for the purposes of Chapter 11 of the
Listing Rules
Resolutions the resolutions to be proposed at the General
Meeting in connection with the Conversion
and the Placing and Open Offer
Shareholders holders of the Ordinary Shares
Standard Life Standard Life Assurance Limited a company
Assurance incorporated in Scotland with registered number
SC286833
Standard Life Standard Life plc and its subsidiary undertakings
Group
Standard Life Standard Life Investment Funds Limited a company
Investments incorporated in Scotland with registered number
SC068442
Important notices
Winterflood Securities Limited and Dickson Minto W.S., each of
which is authorised and regulated in the UK by the Financial
Services Authority, are acting exclusively 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 the respective clients of
Winterflood Securities Limited and Dickson Minto W.S., or for
affording advice in relation to the contents of this announcement
or any matters referred to herein.
Overseas Shareholders
Subject to certain exceptions, none of this announcement, the
Open Offer Entitlement, the Excess Application Facility nor any
Application Form constitutes an offer to sell or the solicitation
of an offer to buy new Ordinary Shares or any entitlements under
the Open Offer in the United States (as defined in Regulation S of
the Securities Act).
None of the new Ordinary Shares, the Open Offer Entitlement, the
entitlements under the Excess Application Facility nor any
Application Form have been, or will be, registered under the
Securities Act or under the securities legislation of any state or
other jurisdiction of the United States. None of the Open Offer
Entitlement, the Excess Application Facility, any Application Form
nor the new Ordinary Shares may be taken up or delivered in, into
or within the United States except pursuant to an exemption from,
or in a transaction not subject to, the registration requirements
of the Securities Act and in compliance with state securities laws.
Application Forms are not being posted to any person in the United
States and no Open Offer Entitlement or entitlements under the
Excess Application Facility will be credited to a stock or share
account of any person in the United States.
None of the Open Offer Entitlement, the Excess Application
Facility nor any Application Form, have been or will be, registered
under the relevant laws of any state, province or territory of any
of the Excluded Jurisdictions. Subject to certain limited
exceptions (i) none of the Open Offer Entitlement, the Excess
Application Facility, any Application Form nor the new Ordinary
Shares may be taken up or delivered in, into or within any of the
Excluded Jurisdictions (ii) Application Forms are not being posted
to any person within any of the Excluded Jurisdictions and (iii) no
Open Offer Entitlement or the entitlements under the Excess
Application Facility will be credited to a stock account of any
person in any of the Excluded Jurisdictions.
The attention of Overseas Shareholders and other recipients of
this announcement who are residents or citizens of any country
other than the United Kingdom or who have a contractual or other
legal obligation to forward this announcement, the Form of Proxy
or, where relevant, any Application Form to a jurisdiction outside
the United Kingdom (including without limitation custodians,
nominees and trustees) is drawn to paragraph 8 of Part II of the
Prospectus.
It is the responsibility of any person receiving a copy of this
announcement, the Open Offer Entitlement, the entitlements under
the Excess Application Facility and/or any Application Form outside
the United Kingdom to satisfy himself as to the full observance of
the laws and regulatory requirements of the relevant territory in
connection therewith, including obtaining any governmental or other
consents which may be required or observing any other formalities
required to be observed in such territory and paying any other
issue, transfer or other taxes due in such other territory. Persons
(including, without limitation, nominees and trustees) receiving
this announcement, the Open Offer Entitlement, the Excess
Application Facility and/or any Application Form should not, in
connection with the Issue distribute or send it into any
jurisdiction when to do so would, or might contravene local
securities laws or regulations.
Forward Looking Statements
This announcement includes statements that are, or may be deemed
to be "forward-looking statements". These forward-looking
statements can be identified by the use of forward-looking
terminology, including the terms "believes", "estimates", "plans",
"anticipates", "targets", "aims", "continues", "projects",
"assumes", "expects", "intends", "may", "will", "would" or "should"
or in each case, their negative or other variations or comparable
terminology. These forward-looking statements include all matters
that are not historical facts. They appear in a number of places
throughout this announcement and include statements regarding the
Company's intentions, beliefs or current expectations concerning,
among other things, the Group's results of operations, financial
condition, liquidity, prospects, growth strategies and the
industries in which the Group operates. By their nature,
forward-looking statements involve risk and uncertainty because
they relate to future events and circumstances. The forward-looking
statements involve risk and uncertainty because they relate to
future events and circumstances. A number of factors could cause
actual results and developments to differ materially from those
expressed or implied by the forward-looking statements, including
without limitation: conditions in the markets, market position of
the Company, earnings, financial position, cash flows, return on
capital, anticipated investments and capital expenditures, changing
business or other market conditions and general economic
conditions. These and other factors could adversely affect the
outcome and financial effects of the plans and events described
herein.
Forward-looking statements contained in this announcement based
on past trends or activities should not be taken as a
representation that such trends or activities will continue in the
future. Subject to the Company's continuing obligations under the
Listing Rules, the Disclosure and Transparency Rules made by the
Financial Services Authority (the "Disclosure and Transparency
Rules"), the City Code on Takeovers and Mergers (the "Takeover
Code"), the Prospectus Rules made by the Financial Services
Authority (the "Prospectus Rules") and the Financial Services and
Markets Act 2000 ("FSMA"), the Company undertakes no obligation to
update publicly or revise any forward looking statement whether as
a result of new information, future events or otherwise. None of
the statements made in this announcement in any way obviates the
requirements of the Company to comply with the Listing Rules, the
Disclosure and Transparency Rules, the Takeover Code, the
Prospectus Rules or FSMA.
Information not contained in this announcement
No person has been authorised to give any information or to make
any representations other than those contained in this announcement
and, if given or made, such information or representations must not
be relied on as having been authorised by any member of the Group,
Winterflood Securities Limited or Dickson Minto W.S. or any of
their respective directors, officers, employees or agents. Subject
to the Listing Rules and/or the Prospectus Rules and/or the
Disclosure and Transparency Rules and/or the Takeover Code and/or
FSMA, neither the delivery of this announcement of any Application
Form nor any subscription or acquisition made under it shall, in
any circumstances, create any implication that there has been no
change in the affairs of the Group since the date of this
announcement or that the information in it is correct as of any
subsequent date.
No statement in this announcement is intended as a profit
forecast and no statement in this document should be interpreted to
mean that the earnings per Ordinary Share for the current or future
years would necessarily match or exceed the historical published
earnings per Ordinary Share.
This announcement is for information only and does not
constitute or form part of any offer or invitation to issue,
acquire or dispose of any securities or investment advice in any
jurisdiction.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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