PSPI Public Services Properties Investments

TIDMPSPI

RNS Number : 1535K

Public Service Properties Inv Ltd

14 April 2015

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

14 April 2015

Public Service Properties Investments Limited ("PSPI" or the "Company")

Compulsory Partial Redemption of approximately 67 million Shares

On 23 March 2015 in its final results announcement, the Company reported that it would use approximately GBP16.0 million of available cash balances to effect a redemption (the Redemption) through a mandatory purchase for cancellation of approximately 67 million shares (representing approximately 64 per cent. of the Company's issued share capital) on a pro rata basis at a price of 23.875p (the Redemption Price) per ordinary share of the Company (Share) from shareholders of the Company (Shareholders) on the register at 5.00pm on 24 April 2015 (the Record Date).

The Company is pleased to announce that a document (Circular), setting out the formal notification to Shareholders of the Redemption and the action (if any) which is required to be taken has been posted to Shareholders, and is available at www.pspiltd.com.

Summary of key matters and expected timings:

   -       Compulsory redemption of 16 for every 25 Shares held at 5.00pm on the Record Date 
   -       Redemption price of 23.875p per Share 
   -       Total cash distribution approximately GBP16.0m 
   -       Redemption proceeds distributed on 27 April 2015 and shares marked "ex" the Redemption 
   -       New ISIN of VGG729481058 effective from 27 April 2015 for continuing shares 

An extract from the Circular is set out below.

For further information please visit www.pspiltd.com or contact:

 
Dr. D. Srinivas      Ben Mingay              Tom Griffiths 
 Ralph Beney          Philip Kendall          Henry Willcocks 
                      Sylvester Oppong 
 RP&C International   Smith Square Partners   Westhouse Securities 
 (Asset Manager)      (Financial Adviser)     (Nomad and Broker) 
 020 7766 7000        0203 696 7260           020 7601 6100 
 
   1.       Introduction 

On 3 March 2015, we announced that both resolutions put to the General Meeting held that day were passed and that the Company expected the disposal of its UK companies, businesses and assets to complete shortly. On 4 March 2015, we announced that this disposal had completed earlier that day.

On 23 March 2015 in the Company's final results announcement for the year ended 31 December 2014, we reported that initial net proceeds from this disposal of GBP14.2 million had been added to the Group's working capital, after repayment of debt secured against the UK assets of GBP16.3 million, taxation and transaction costs and that net proceeds of approximately EUR2.0 million had been added to working capital as a result of the disposal of certain of our German properties, after repayment of debt secured against those German properties of EUR12.5 million, interest rate swap breakage costs and transaction fees.

At the same time, we reported that the Company would use approximately GBP16.0 million of available cash balances to effect a redemption (the Redemption) through a mandatory purchase for cancellation of approximately 67 million shares (representing approximately 64 per cent. of the Company's issued share capital) on a pro rata basis at a price of 23.875p (the Redemption Price) per ordinary share of the Company (Share) from shareholders of the Company (Shareholders) on the register on 24 April 2015 (the Record Date).

This document sets out the formal notification to Shareholders of the Redemption and the action which is required to be taken by Shareholders who hold their Share(s) in certificated form in order to receive the resultant consideration and a balance share certificate where applicable.

   2.       The Redemption process 

The Redemption is being implemented by the Company pursuant to the Articles of Association of the Company as amended on 3 March 2015 (Articles). Under the Articles, the Board may, without further Shareholder approval, determine that Shares shall be redeemed pro rata from each Member (or if the Board so determines as nearly pro rata as practical without giving rise to fractions).

The Company will use approximately GBP16.0 million of available cash balances to mandatorily purchase for cancellation approximately 67 million Shares (representing approximately 64 per cent. of the Company's issued share capital) on a pro rata basis at a price of 23.875p per Share from Shareholders on the register on the Record Date.

Accordingly, the Company is redeeming 16 Shares for every 25 Shares held on the Record Date. No fractions of Shares will be redeemed and the number of Shares to be redeemed for each Shareholder and Depositary Interest Holder will be rounded down to the nearest whole number of Shares or Depositary Interests as the case may be. By way of example, if a Shareholder owns 265 Shares on the Record Date, 160 of their Shares will be redeemed and they will retain a holding of 105 Shares.

All of the Shares redeemed on the Redemption Date will be cancelled.

The existing ISIN number VGG729641024 (Old ISIN) for the Shares will expire at the close of business on the Record Date. The new ISIN number VGG729481058 (New ISIN) in respect of the Shares (following the Redemption) will be enabled from 27 April 2015 when the Shares will be marked "ex" Redemption. Up to the Record Date, Shares will be traded under the Old ISIN. The Redemption will be effected pro rata to holdings of Shares and Depositary Interests on the register(s) at the close of business on the Record Date. Purchases of Shares and Depositary Interests that were not reflected in the share register as at the close of business on the Record Date will not be taken into account in implementing the redemptions.

Payments of redemption monies are expected to be effected:

(i) in the case of Shares held in uncertificated form through Depositary Interests on 27 April 2015 through CREST; or

(ii) in the case of Shares held in certificated form, subject to delivery by the relevant Shareholder to the Company of the Share certificate(s) in respect of the Shares to be redeemed by no later than 5.00pm on 24th April 2015, or as otherwise agreed by the Company, by cheque drawn in favour of the registered Shareholder and sent to the registered address of the registered Shareholder on or around 27 April, 2015. A balance certificate for the remaining Shares held will at the same time be issued in the same name(s) as the Shareholder(s) whose Shares are redeemed and despatched together with the cheque for the redemption proceeds. All documentation sent pursuant to these arrangements is sent at the risk of the Shareholder(s). If share certificates are not received on or before 24 April 2015, the redemptions will still be processed by reference to the share register on that date but despatch of the relevant redemption proceeds and balance certificate(s) will be delayed.

   3.       Taxation treatment 

General treatment for UK tax paying Shareholders

The following summary of the UK tax treatment of Shareholders as result of redemption of part of their holding of Shares is intended as a general guide only and is based on United Kingdom tax law as well as the published practice of HMRC at the date of this document. It applies only to Shareholders who are resident in the UK (except where expressly stated) and who hold their Shares beneficially as an investment. It may not be applicable to certain Shareholders, such as investors who are exempt from UK tax or who hold Shares in an investment wrapper such as an ISA, dealers in securities and Shareholders who are not beneficial owners of the relevant Shares, such as trustees.

Shareholders who are in any doubt as to their tax position or who may be subject to tax in a jurisdiction other than the UK should consult an appropriate professional adviser. These comments are not exhaustive and do not constitute legal or tax advice.

Taxation of Chargeable Gains

A Shareholder whose Shares are redeemed should be treated, for the purposes of UK taxation of chargeable gains, as though he had sold them on-market to a third party at the Redemption Price per Share redeemed. A charge to capital gains tax or, in the case of a corporate Shareholder, corporation tax on chargeable gains could therefore arise depending on that Shareholder's particular circumstances (including the availability of any exemptions, reliefs and allowable losses).

A Shareholder who is not resident for tax purposes in the UK whose Shares are redeemed pursuant to the Redemption will not normally be liable for UK taxation on chargeable gains on any gain which is realised. However, a liability to tax may arise in respect of a gain if such Shares are held for the purposes of a trade, profession or vocation in the UK through a branch or agency (or, in the case of a corporate Shareholder, a permanent establishment) or realised by an individual Shareholder who is temporarily non-resident who may be liable to capital gains tax under certain anti-avoidance rules, which can impose taxation when the non-resident returns to the United Kingdom.

The attention of investors is drawn to section 684 of the Income Tax Act 2007 (ITA) (for individuals) and section 731 of the Corporation Taxes Act 2010 (CTA) (for companies) under which HM Revenue & Customs may seek to cancel tax advantages from certain transactions in securities. No application for clearance under section 701 of the ITA or section 748 of the CTA has been made. In the event that HM Revenue & Customs did successfully apply section 684 of the ITA (and associated provisions) or section 731 of the CTA (and associated provisions) to payments in respect of the Redemption, HM Revenue & Customs might make such tax assessment on any of the Shareholders as they consider necessary in the circumstances, including the Shareholders as having received any payment as an income receipt.

Individual Shareholders - taxation of income

The redemption of Shares pursuant to the Redemption will not constitute a distribution for any Shareholder who is an individual provided the Company is, as is intended, not UK tax resident.

Corporate Shareholders - taxation of income

The Company has been advised that payments to Shareholders (to the extent that the payments represent repayment of capital and any premium payable on issue of the Shares constituting new consideration) in respect of the Redemption should not constitute income distributions for UK tax purposes.

To the extent that the Redemption Price exceeds the original subscription capital provided for the Shares, such amount may be treated as an income distribution (and excluded from the chargeable gains computation). However, generally any such distributions should be exempt from a charge to corporation tax on income and the tax treatment of this distribution will be as set out below. However, the tax treatment of the distribution element paid by the Company in respect of the Shares will depend upon the size of the recipient company - any corporate Shareholder which is not "small" will generally be exempt from corporation tax on income on the distribution element.

Certain small companies will be taxed at their marginal rate of corporation tax on all dividends and distributions, including the distribution element of the Redemption Price, received from the Company. In appropriate circumstances, a tax credit should also be given for any underlying tax that is paid on the profits out of which the dividend was paid, provided the relevant corporate Shareholder controls at least 10 per cent. of the voting rights in the Company and certain detailed conditions are satisfied. Corporate Shareholders should seek their own separate advice as to whether they are a small company for these purposes.

Corporate Shareholders - taxation of chargeable gains

Shareholders within the charge to UK corporation tax may be subject to corporation tax on chargeable gains in respect of any gain arising on a disposal of Shares. Indexation allowance may apply to reduce any chargeable gain arising on a disposal of the Shares pursuant to the Redemption but will not create or increase an allowable loss.

Corporate Shareholders should take their own advice regarding the chargeable gains implications of the Redemption but, broadly, (a) where an amount treated as a distribution is taxable as income, this amount should be excluded from the computation of the chargeable gain and (b) where it is exempt, the distribution should be included in the disposal proceeds for the purposes of the computation of the chargeable gain.

Offshore funds

The Company has been advised that it should not be regarded as a mutual fund for the purposes of section 356 Taxation (International and Other Provisions) Act 2010. On this basis a shareholding in the Company should not be regarded as a relevant interest in an offshore fund for tax purposes.

Stamp duty and stamp duty reserve tax

Shareholders will have no liability to UK stamp duty or stamp duty reserve tax in respect of the redemption of their Shares.

This information is provided for general guidance only. The tax treatment of the Redemption for particular Shareholders may depend on their particular circumstances. Any Shareholder who is uncertain as to the taxation treatment of redemption of their Shares should obtain appropriate specialist advice.

   4.       Action to be taken 

Depositary Interest Holders

No action is required by Depositary Interest holders. On the Record Date, the Old ISIN will be disabled and on 27 April 2015, holders will receive the new Depositary Interest under New ISIN, VGG729481058. Redemption proceeds due will be settled through CREST by means of a CREST payment in favour of the holder's payment bank in respect of the cash proceeds due, in accordance with CREST payment arrangements. The Company reserves the right to settle all or any part of the proceeds referred to in this paragraph, in the manner referred to in paragraph 2(ii) above, if, for any reason, it wishes to do so.

Shares held in certificated form

In order to receive payment for the redeemed Shares and the balance share certificate(s) for Shares remaining in issue, Shareholders should return to the Company's registrars the share certificate(s) for the Shares to be redeemed by no later than 5.00pm on 24 April 2015, or where any relevant share certificate has been lost, a form of indemnity (and other applicable documentation if required) duly completed and signed and returned in accordance with the instructions printed thereon to Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol, BS99 6ZY.

If your completed documentation is not received by 5.00pm on 24 April 2015 this will delay receipt of the relevant holders' redemption consideration and issue of the share certificate(s) for the remaining Shares.

If you have any questions about this process or cannot locate your share certificate(s) and need to execute a form of indemnity, you should contact Computershare, the Company's Registrar, on 0870 707 1438 if calling from the UK or +44 870 707 1438 if calling from outside the UK. The helpline is available between the hours of 9.00am and 5.00pm excluding weekends and public holidays. Calls to the Registrar's 0870 707 1438 number are charged at 10 pence per minute (including VAT) plus any of your service provider's network extras. Calls to the Registrar on their +44 870 707 1438 number from outside the UK are charged at applicable international rates. Different charges may apply to calls made from mobile phones and calls may be recorded and monitored randomly for security and training purposes. The Registrar cannot provide any financial, legal or tax advice. If you are a CREST sponsored member, you should contact your CREST sponsor before taking any action.

Where a holding of a registered Shareholder or the same multiple Shareholders is represented by one or more share certificates, (i) this will be treated as a single holding for the purposes of determining the number of Shares to be redeemed, and (ii) it will only be necessary to surrender (a) share certificate(s) representing the number of Shares to be redeemed. The number of Shares represented by any balance certificate will take into account the number of Shares represented by retained certificates.

A balance share certificate representing the retained Shares and a cheque for payment of the redemption proceeds (on the basis described above) will be issued on or around 27 April 2015 for Shareholders whose documentation is received by 5.00pm on 24 April 2015.

   5.       Further payments to Shareholders 

The Board will continue to keep under review the return of additional funds to Shareholders in the light of the timing of further transactions in Germany, whether additional consideration is payable under the transaction with Embrace Group and the Group's contingent and actual liabilities.

Yours sincerely

Patrick Hall

Chairman

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

All times shown in this announcement and the document are London times unless otherwise stated.

 
 Publication of the document                                                                             13 April 2015 
 Record date for Redemption                                                                    5.00pm on 24 April 2015 
 Latest time and date for receipt of share certificates*                                       5.00pm on 24 April 2015 
 Shares marked "ex" Redemption, new ISIN (ordinary shares of $0.01 each) VGG729641024                    27 April 2015 
 effective, 
 and CREST accounts credited with 'balance' Shares and redemption proceeds 
 Expected date for despatch of balance share certificates and redemption proceeds in        On or around 27 April 2015 
 respect 
 of shares held in certificated form* 
 

*NOTE: If share certificates are not received on or before 24 April 2015, the redemptions will still be processed by reference to the share register on that date but despatch of the relevant redemption proceeds and balance certificate(s) will be delayed.

Overseas Shareholders

The distribution of this announcement in or into jurisdictions other than the United Kingdom may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about, and observe, such restrictions. Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction. Subject to certain exceptions, this announcement is not for release, publication or distribution, directly or indirectly, in or into the United States, Australia, Canada, the Republic of South Africa, Japan or any jurisdiction where to do so might constitute a violation of local securities laws or regulations.

Forward-looking statements

This announcement may include 'forward-looking statements'. All statements other than statements of historical fact included in this announcement, including without limitation, those regarding the Company's financial position, business strategy, plans and management objectives for future operations are forward-looking statements. Forward-looking statements are subject to risks and uncertainties and accordingly the Company's actual future financial results and operational performance may differ materially from the results and performance expressed in, or implied by, the statements. These factors include but are not limited to those described in the Circular.

This information is provided by RNS

The company news service from the London Stock Exchange

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