AXA Property
Trust
RIS announcement
re Announcement of EGM
and Portfolio
Update
AXA Property Trust Limited
("APT" or the "Company")
LEI Number: 213800AF85VEZMDMF931
9 August
2018
Recommended
proposals for the voluntary liquidation of the Company and
cancellation of the admission of its Shares to the Official List of
the UK Listing Authority and to trading on the Main Market of the
London Stock Exchange
Notice of
Extraordinary General Meeting
1. INTRODUCTION AND
BACKGROUND
The Company has been in managed wind-down since 26 April 2013 during which time the Company has
realised the Portfolio in an orderly manner and has distributed the
realisation proceeds to Shareholders. There is now only one asset,
the Curno property, remaining in the Portfolio.
An update on the discussions with the tenant at the Curno
property was last reported on as at 29 May
2018. Since this date these discussions have continued
although there is not yet an agreement secured with the tenant.
Whilst the Investment Manager is confident an agreement will be
forthcoming in the next three months, the prospects for disposing
of the asset remain very weak until the leasing position with the
tenant has been resolved. Moreover, and until the terms are
finalised with the tenant, there continues to be uncertainty as to
the impact of these negotiations on the valuation of the property.
This is reflected in the valuation of the Curno property as at
30 June 2018 which has been reported
by the independent valuers, Knight Frank, at €8.9 million, compared
to a valuation of €11.35 million as at 31
March 2018. This is a reduction of €2.45 million, or
9.29 pence per share using the
closing exchange rate of €1.129/£1 as at 30
June 2018.
Further to the announcement on 22 June
2018 and in light of the Company's current position, the
Board has now unanimously agreed that it is in the best interests
of the Company and its Shareholders to wind up the Company
voluntarily in accordance with the Companies Law, appoint
Linda Johnson and Ashley Paxton of KPMG Channel Islands Limited as
Liquidators and to cancel the admission of its shares to listing on
the Official List of the UK Listing Authority and to trading on the
London Stock Exchange.
In reaching their decision to recommend the winding-up of the
Company, the Directors have considered the Company's operating cost
structure having regard to the uncertain prospects of achieving a
sale of the Curno property. As a result of this analysis the Board
considers there are significant cost savings that will be achieved
by placing the Company into voluntary liquidation. These
savings are expected to be in the region of £275,000 in the first
year, after allowing for the one-off expenses incurred in relation
to the Proposals, and in the region of £360,000 for the following
and subsequent years. In view of the Net Asset Value of the Company
reported as at 31 March 2018 as well
as the future cashflow generation of the Curno property, these
savings are considered to outweigh the benefits of retaining the
existing operating structure of the Company and its listing.
The Board is therefore putting forward the Proposals for
approval by Shareholders at the EGM which, if approved, would
commence the voluntary winding-up of the Company.
Further details of the Proposals, which require Shareholder
approval, are set out in section 2 below.
A Circular will be published shortly which sets out details of,
and seeks Shareholder approval for, the Proposals and explains why
the Board is recommending that Shareholders vote in favour of the
Resolutions to implement them.
2. PROPOSALS
The purpose of the Circular will be to convene an Extraordinary
General Meeting of the Company. At the EGM, the Board
proposes:
(i) that the Company be wound up
voluntarily;
(ii) to appoint Linda Johnson and Ashley
Paxton of KPMG Channel Islands Limited as joint liquidators
to the Company (the "Liquidators"), with a view to effecting
the voluntary liquidation of the Company; and
(iii) to cancel the admission of the Shares to
listing on the UKLA Official List and to trading on the Main Market
of the London Stock Exchange,
(together, the "Proposals").
The Proposals will, if approved, result in the voluntary
liquidation of the Company. It is anticipated that upon the
appointment of the Joint Liquidators, there will be an assessment
of distributable funds (if any) having regard to current
liabilities, costs and expenses (including the costs of the
Company's liquidation) as well as any cash reserves which may be
released for distribution upon the finalisation of liquidating
parts of the Company’s German corporate subsidiaries, expected
during Q3 2018. This assessment will be conducted within 30 days of
the date of appointment of the Joint Liquidators, followed by an
announcement in respect to the timing of the next
distribution. The Liquidators will make the first
distribution (after providing for the Retention, as defined below)
as soon as practicable following their confirmation of the NAV. No
financial statements of the Company or updated NAV will be prepared
for the financial year ended 30 June
2018 or subsequent years.
It is anticipated that, subject to the continued review of the
Company’s financial position by the Joint Liquidators, there will
be a further distribution to the Shareholders at the conclusion of
the sale of the Curno property. This is not expected before Q1 2019
and will be dependent on the timing of the lease negotiations with
the tenant and consequently the timing of any sale, as well as the
amount of disposal proceeds generated. On this basis, it is
anticipated that the final liquidation of the Company will be
completed by the end of Q1 2020. However, these dates are
estimates and there can be no guarantee that the liquidation
process will not be delayed.
The board understands that the intention of the Liquidators
remains to seek the sale of the Curno property.
Shareholders should note that the Proposals, if approved, will
not have the effect of placing the Company’s remaining subsidiaries
into voluntary liquidation. Accordingly, the implementation of the
Proposals, if approved, is not anticipated to have a material
adverse impact on the valuation of the Curno property and the sale
of the Curno property will take place in the ordinary course and
Shareholders should not consider it to be a “fire sale”.
If the Resolutions are approved by Shareholders at the EGM, (i)
the Real Estate Advisory Agreement dated 14
March 2006 between the Company, Property Trust Limited
Luxembourg 1, S.À.R.L. and AXA Real Estate Investment Managers UK
Limited ( the “REAA”) and (ii) the Investment Management
Agreement dated 18 April 2005 between
the Company and AXA Investment Managers UK Limited (the
“IMA”), both as amended pursuant to an amendment dated
26 April 2013, will each be
terminated following the cancellation of listing and trading of the
Shares on the Main Market. As a result, all existing local advisory
agreements and asset management agreements at the level of the
Company’s subsidiaries with AXA Real Estate Investment Managers UK
Limited and/or its affiliates will automatically terminate.
Following the cancellation of listing and trading of the Shares
on the Main Market, it is intended that a new asset management
agreement ("AMA") will be entered into between the Company’s
subsidiary, Multiplex 1 Srl and AXA Real Estate Investment Managers
Italia Srl ("AXA REIM Italia") pursuant to which AXA REIM
Italia will provide asset management services in relation to the
Curno property pending its disposal. The purpose of the AMA will be
to continue to manage the Curno property and effect a realisation
in a timely manner. The scope of the services under the AMA is
expected to be substantially the same as the scope under the
existing AXA REIM Italia asset management agreement.
In view of the proposed change to the role and duties of AXA
Investment Managers and its various affiliates, the fees payable to
AXA REIM Italia in respect of the new AMA will, with effect from
the date of appointment of the Joint Liquidators, be as
follows:
· an asset management fee of 0.50%
of the gross market valuation of the property (as opposed to 1.10%
of NAV at present) per annum to be paid quarterly in arrears
initially based on the gross market value of the Curno property as
at 30 June 2018;
· a transaction fee of 0.50% of
the gross sale price achieved on a sale of the asset within nine
months of the date of appointment of the Joint Liquidators (as
opposed to a current transaction fee of 0.35% regardless of when a
sale occurs); and
no transaction fee shall be payable should a sale occur more
than nine months after the date of appointment of the Joint
Liquidators.
The Board considers that the proposed changes will incentivise
AXA REIM Italia to finalise discussions with the tenant and achieve
a disposal of the property within a reasonable timeframe.
2.1 Suspension and cancellation of
admission of the Shares to the Official List of the UK Listing
Authority and to trading on the Main Market
The register of members will be closed at 6.00pm on 6 September
2018 and the Shares will be disabled in CREST at the start
of business on 7 September 2018.
Accordingly, to be valid, all transfers must be lodged before
6.00pm on 6
September 2018. Application will be made to the UKLA for
suspension of listing of the Shares on the UKLA Official List and
application will be made to the London Stock Exchange for
suspension of trading in the Shares, in each case, at 7.30am on 7 September
2018. The last day for dealings in the Shares on the London
Stock Exchange on a normal rolling two day settlement basis will be
4 September 2018. After 4 September 2018, dealings should be for cash
settlement only and will be registered in the normal way if the
transfer, accompanied by the documents of title, is received by the
Registrars by close of business on 6
September 2018. The record date, being the date for
determining which Shareholders are entitled to receive liquidation
distributions, is close of business on 6
September 2018.
Transfers received after the time specified above will be
returned to the person lodging them and, if the Resolutions are
passed, the original holder will receive any proceeds from
distributions made by the Liquidators.
If the Resolutions relating to the Proposals are passed, the
Company will make applications for the cancellation of the
admission of the Shares to listing on the UKLA Official List and to
trading on the Main Market following the EGM with the cancellations
expected to take effect at 8.00am on
10 September 2018.
After the liquidation of the Company and the making of the final
distribution to Shareholders (if any), existing certificates in
respect of the Shares will cease to be of value and any existing
credit of the Shares in any stock account in CREST will be
redundant.
2.2 Costs of the Proposals
It is anticipated that the expenses incurred in relation to the
Proposals are currently estimated to amount to approximately
£80,000, including professional advice and regulatory expenses.
These exclude the fees and expenses of service providers in the
ordinary course of business up to the date of the Liquidators'
appointment in accordance with the terms of their engagement.
3. EXTRAORDINARY GENERAL
MEETING
The Proposals are subject to Shareholder approval. Notice
convening the Extraordinary General Meeting, to be held at the
offices of Northern Trust International Fund Administration
Services (Guernsey) Limited,
Trafalgar Court, Les Banques, St. Peter Port, Guernsey GY1 3QL at 12.00pm on 7 September
2018, will be published shortly. The Notice includes the
full text of the Resolutions.
In order to become effective, the Resolution to voluntarily wind
up the Company must be approved by a majority of not less
than seventy five per cent. of the votes cast by Shareholders who,
being entitled to vote, are present in person or by proxy at the
EGM. The Resolutions to appoint the joint liquidators
must be approved by a simple majority of the votes cast
by Shareholders who, being entitled to vote, are present in person
or by proxy at the EGM.
4. CONSEQUENCES OF THE PROPOSALS
NOT BEING APPROVED
If the Proposals are not approved, the Proposals will not be
implemented and the Board shall consult with Shareholders as to the
future course of action. In doing so, the Board shall be required
to consider the probability of a reduced level of rental income
available to service the Company’s current operating expense
structure.
5. RECOMMENDATION
The Board unanimously considers that the Proposals are in the
best interests of Shareholders as a whole. The Board recommends
that Shareholders vote in favour of the Resolutions, as the
Directors intend to do in respect of their own beneficial holdings
of Shares which, in aggregate, amount to 67,009 Shares,
representing approximately 0.286 per cent. of the total
voting rights in the Company.
EXPECTED TIMETABLE OF EVENTS
The anticipated dates and sequence of events relating to the
implementation of the Proposals are set out below:
| Record date for participation and
voting at the EGM |
12.00pm on 5 September
2018 |
| Latest time and date for receipt of
Form of Proxy for the EGM* |
12.00pm on 5 September
2018 |
| Closing of the Company's register
and record date for participation in liquidation distributions |
6.00pm on 6 September
2018 |
| Suspension of listing and trading of
the Shares |
7.30am on 7 September
2018 |
| EGM |
12.00pm on 7 September
2018 |
| Liquidators appointed |
7 September
2018 |
| Announcement of results of the
EGM |
7 September 2018 |
| Cancellation of listing and trading
of the Shares on the Main Market |
8.00am on 10 September
2018 |
| Liquidators' announcement of amount
of first distribution** |
By 7 October 2018 |
Each of the times and dates in the expected timetable of events
may be extended or brought forward without notice. If any of the
above times and/or dates change, the revised time(s) and/or date(s)
will be notified to Shareholders by an announcement through an RIS
provider. All references are to London time unless otherwise stated.
* Please note that the latest time for receipt of the Forms of
Proxy is 48 hours (excluding any part of a day which is not a
Business Day) prior to the time allotted for the meeting.
** The Liquidators will make their assessment of the amount of
the first distribution (after providing for the Retention) within
30 days of the date of appointment of the Joint Liquidators,
followed by an announcement in respect to the timing of the next
distribution.
Company website:
retail.axa-im.co.uk/axa-property-trust
All Enquiries:
Investment Manager
AXA Investment Managers UK Limited
Broker Services
7 Newgate Street
London EC1A 7NX
United Kingdom
Broker
Stifel Nicolaus Europe Limited
150 Cheapside
London EC2V 6ET
United Kingdom
Tel: +44 (0)20 7710 7600
Company Secretary
Northern Trust International Fund
Administration Services (Guernsey)
Limited
PO Box 255
Trafalgar Court
Les Banques
St Peter Port
Guernsey GY1 3QL
Channel Islands