Standard LifeInvProp Proposed portfolio acquisition and capital raising
September 28 2015 - 2:00AM
UK Regulatory
TIDMSLI
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT FOR PUBLICATION,
RELEASE, OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN, OR INTO, THE UNITED
STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, SOUTH AFRICA OR ANY JURISDICTION
IN WHICH THE SAME WOULD BE UNLAWFUL. THE INFORMATION CONTAINED HEREIN DOES NOT
CONSTITUTE AN OFFER OF SECURITIES FOR SALE INCLUDING IN THE UNITED STATES,
AUSTRALIA, CANADA, JAPAN, NEW ZEALAND OR SOUTH AFRICA.
Standard Life Investments Property income Trust Limited
(the "Company")
Proposed portfolio acquisition and capital raising (the "Proposals")
28 September 2015
Introduction and Portfolio
The Board of the Company announces that it has entered into non-legally binding
heads of terms to acquire a portfolio of 22 UK commercial properties (the
"Portfolio") for a cash consideration of approximately GBP165 million. The
proposed Portfolio is diversified by sector, tenant and region and has a
similar income and covenant profile to the Company's existing property
portfolio. The Company's investment manager believes that the proposed
Portfolio is complementary to the existing portfolio and introduces a number of
asset management opportunities that it believes will enhance returns to
shareholders. The proposed Portfolio is also expected to enhance the Company's
dividend cover.
The proposed acquisition of the Portfolio is subject to the completion of
appropriate due diligence and valuations. It is expected that the Portfolio
would be acquired by means of the purchase of all of the units in a Jersey
Property Unit Trust which currently holds the Portfolio.
Capital raising
The acquisition is also subject to the Company raising additional equity and
debt capital which, together with the Company's expected available cash
reserves, would be used to fund the cash consideration and expenses of the
acquisition. The Board would intend to put in place a new debt facility for up
to GBP75 million in aggregate and has commenced discussions with potential
lenders in respect of these facilities. The Board would also intend to
undertake a placing of new ordinary shares at a premium to the net asset value
per share to raise up to GBP100 million to fund the balance of the
consideration.
Consultation with Shareholders
To date the Company has not incurred any material expenses in connection with
the Proposals. The acquisition of the Portfolio and the placing would be
subject to Shareholder approval. The Company's advisers will shortly be
consulting with larger Shareholders in the Company in respect of the Proposals,
including the level of possible demand for new ordinary shares under the
proposed placing. Subject to the outcome of that consultation it is expected
that material costs will be incurred by the Company in the event that the
Proposals do not proceed. The Company's investment manager has agreed to make
a contribution to part of those abortive costs.
The Company will make a further announcement in due course in relation to the
Proposals. The Board notes that there is no certainty that the Proposals will
proceed. However, subject to the outcome of the legal and due diligence
processes and the consultation with Shareholders, it is expected that a
conditional contract could be exchanged in respect of the Portfolio, and a
shareholder circular and prospectus published, within the next couple of months
and that the placing and acquisition could complete by the end of the year.
Dick Barfield, Chairman, commented:
"The acquisition of this portfolio of properties identified by our investment
manager presents an excellent opportunity to further diversify and grow the
Company's property portfolio with properties which are complementary to the
existing assets and introduce a number of asset management initiatives to
enhance portfolio returns. The acquisition would strengthen the Company's
dividend cover and following a successful placing of new shares the liquidity
in the Company shares should increase and make the Company more attractive to a
wider audience of investors. Whilst the transaction is at an early stage and
remains subject to a number of conditions, we very much hope that shareholders
will support the Proposals, including the proposed equity fund raising."
All enquiries:
Jason Baggaley/Gordon Humphries, Standard Life Investments
Tel: 0131 245 2833/0131 245 2735
Graeme Caton, Winterflood Investment Trusts
Tel: 020 3100 0268
Douglas Armstrong, Dickson Minto W.S.
Tel: 020 7649 6823
Winterflood Securities Limited, which is authorised and regulated by the
Financial Conduct Authority, is acting for the Company and for no-one else in
connection with the Proposals and will not be responsible to anyone other than
the Company for providing the protections afforded to clients of Winterflood
Securities Limited, or for affording advice in relation to the Proposals.
Dickson Minto W.S., which is authorised and regulated by the Financial Conduct
Authority, is acting for the Company and for no-one else in connection with the
Proposals 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 the Proposals.
END
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