PAQ Paq Intl

RNS Number:8744Z
Property Acquisition & ManagementLd
12 August 2002


PROPERTY ACQUISITION & MANAGEMENT LIMITED (the "Company")


Fundraising


At the time of the announcement of the preliminary results of the Company for
the year ended 31 December 2001, the Chairman's statement advised shareholders
that the Board was actively considering proposals to raise further funds to
replace the losses incurred by the bond portfolio. In the light of recent
extreme market volatility, and for reasons outlined below, the Board regrets to
announce that it has not been possible to successfully conclude these proposals
and, accordingly, the Company does not expect to be able to raise further funds
at this time.



The market conditions referred to above have resulted in a substantial fall in
the price of the Company's ordinary shares from 70.5p as at 30 April 2002 to
42.5p as at close of business on 9 August 2002. The last published net asset
value per ordinary share as at 31 December 2001 was 81.61p (basic) and 85.10p
(pro forma). As at 30 June 2002, the estimated net asset value per ordinary
share was 73.66p (basic) and 76.80p (pro forma). The Board concluded that a new
issue of share capital by the Company was unlikely to be supported by the
majority of shareholders unless it could be carried out at or around the
Company's net asset value per ordinary share, and that this would not be
possible given the extent to which the Company's ordinary share price had
fallen.



Property



The preliminary announcement of results, referred to above, emphasised the
uncertain conditions currently being experienced by the property market, with
reduced tenant activity being offset by strong investor demand for certain types
of higher yielding property. Recent market commentary indicates that the general
outlook for commercial property remains uncertain in the context of the state of
the world economy.


Change of investment policy



On 6 August 2002, the Company announced that the class meeting of the zero
dividend preference shareholders of Property Acquisition and Management
Securities Limited, adjourned from 30 July 2002, had approved the change to the
investment policy of Property Acquisition and Management High Income Limited,
such that investment in bonds be discontinued and instead an emphasis be placed
on property. As at 9 August 2002, the remaining bond holdings of the group
amounted to #2.176m, following the realisation of most of the bond portfolio
earlier in 2002 and the repayment in full of the RBSI loan facility. As full
provision for all capital losses associated with the disposal of the bond
portfolio, repayment of the bank loan and the attendant interest rate swap break
costs was made in the accounts for the year ended 31 December 2001, the only
charges to be applied in the 2002 financial year relate to the residue of the
bond portfolio and to the proportion of Euro loan unhedged in the period prior
to repayment. As at 9 August 2002, such losses (both realised and unrealised)
were estimated to be #775,240. The group expects to undertake the realisation of
the remainder of the bond holdings during the course of the next year.



The change of investment policy will allow the Company to focus entirely on its
successful property business, and maximise the combined financial, management
and development experience of the group. In this regard, the Company has
established a new subsidiary, PAM Offshore Properties Limited, and will use this
new subsidiary to undertake future property business when it can purchase
property at attractive prices and where it believes that it can do so in a tax
efficient way.


Share buy-backs

As at the close of business on 9 August 2002, the mid market price of an
ordinary share of the Company was 42.5p compared to the estimated net asset
value of an ordinary share of the Company as at 30 June 2002 of 73.66p (basic),
a discount of 42 per cent.. The Board is aware that a number of the holders of
the Company's ordinary shares are split capital investment trusts which
themselves have suffered the aggravated effects of the general stockmarket
volatility on their own asset values and have been sellers of the Company's
ordinary shares. This has led to a significant imbalance between the supply and
demand for ordinary shares. The Board has therefore concluded that it would be
more appropriate for the Company to utilise any surplus distributable reserves
in buying in the Company's ordinary shares to try to redress this imbalance as
opposed to distributing such reserves by way of dividend. Accordingly, the Board
does not expect to declare any further dividends on the Company's ordinary
shares in respect of the financial period ending 31 December 2002 and in respect
of the financial period ending 31 December 2003. The Board also believes that
using available resources to buy back shares at a discount to asset value will
enhance the asset value for the remaining holders of the group's securities.
Accordingly, the Board will be seeking the requisite consents in due course in
order to implement this proposal.


Convertible redeemable preference shares



Dividends on the Company's convertible redeemable preference shares will
continue to be paid in accordance with the Company's articles of association and
Guernsey Company Law. The Board today announces the declaration of a dividend of
2.85 pence per share in respect of the four month period ending 31 August 2002.
The convertible redeemable preference shares will be marked ex dividend on 11
September 2002 with the associated record date on 13 September 2002, and the pay
date on 31 October 2002.


Fees


Collins Stewart Fund Management Limited accepts that the current basis of a
fixed fee of #3.5m per annum is no longer appropriate. Accordingly, the Manager
has agreed to rebate part of its fee with effect from 1 July 2002 with the
amount being paid to Collins Stewart Fund Management Limited being calculated on
an ad valorem basis of 1.5% based on total assets under management.


Enquiries

Collins Stewart Fund Management Limited 

- Andrew Duquemin     01481 731987

                      This information is provided by RNS
            The company news service from the London Stock Exchange

END

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