TIDMRGL
RNS Number : 3458Y
Regional REIT Limited
04 December 2017
THIS ANNOUNCEMENT IS NOT FOR PUBLICATION, RELEASE OR
DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR
INTO THE UNITED STATES OF AMERICA, AUSTRALIA, NEW ZEALAND, CANADA,
THE REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY OTHER JURISDICTION IN
WHICH IT WOULD BE UNLAWFUL TO DO SO.
This announcement is not an offer of securities for sale, or an
offer to buy or subscribe for, directly or indirectly, securities
to any person in the United States of America or any other
jurisdiction, including in or into Australia, New Zealand, Canada,
the Republic of South Africa and Japan or any other jurisdiction in
which such offer or solicitation is unlawful. This announcement is
an advertisement and not a prospectus (or prospectus equivalent
document). A prospectus in connection with the proposed firm
placing, placing, open offer and offer for subscription (together,
the "Capital Raising") (the "Prospectus") and the admission of the
new ordinary shares of no par value ("New Ordinary Shares") in
Regional REIT Limited ("Regional REIT" or the "Company" and,
together with its subsidiaries, the "Group") to be issued pursuant
to the Capital Raising to listing on the premium listing segment of
the Official List of the Financial Conduct Authority ("FCA") and to
trading on the Main Market for listed securities of London Stock
Exchange plc (together, "Admission") is expected to be published by
the Company on or around 5 December 2017. A copy of the Prospectus
will, following publication, be available on the Company's website
(www.regionalreit.com) and be available for viewing at the National
Storage Mechanism at https://www.morningstar.co.uk/uk/NSM.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
4 December 2017
Regional REIT Limited
("Regional REIT" or the "Company")
Proposed Firm Placing, Placing, Open Offer and Offer For
Subscription to raise up to GBP100 million at an Offer Price of 101
pence per Ordinary Share (the "Capital Raising")
Regional REIT (LSE: RGL) is pleased to announce it has agreed to
acquire a portfolio of three real estate properties from NW UK III
Limited comprising office properties in Woking, Cheshunt and
Edinburgh and a portfolio of 17 office properties from Archimedes
Real Estate LP (a fund managed by M7 Real Estate Limited) (the
"Acquisitions").
To finance the Acquisitions the Company is proposing a Capital
Raising to raise gross proceeds of c.GBP50 million through the
issue of New Ordinary Shares by way of a firm placing ("Firm
Placing") and additional gross proceeds of up to GBP50 million by
way of a placing, open offer and offer for subscription ("Placing,
Open Offer and Offer For Subscription"), all at an Offer Price of
101 pence per New Ordinary Share. The Capital Raising is
conditional, inter alia, on minimum gross proceeds of GBP65 million
being raised pursuant to the Capital RaisingThe Board will have the
ability to increase the size of the Issue by up to 25 per cent.
should there be sufficient demand.
Transaction highlights
-- Proceeds of the Capital Raising intended to be used as follows:
o up to GBP45.8 million to finance the First New Portfolio
Acquisition;
o approximately GBP4 million in respect of the costs of
refinancing certain of the Group's debt facilities;
o up to GBP47.6 million to finance the Second New Portfolio
Acquisition;
o up to GBP4.9 million to finance a pipeline investment (the
"Pipeline Investment") which is in advanced negotiations and which
the Company expects to complete by March 2018; and
o the remaining to capitalise on the pipeline of other
investment and risk-controlled refurbishment opportunities
-- Acquisitions have strong strategic rationale:
o consistent with the Company's strategy to invest in regional
office and industrial assets that offer good income returns and
value enhancement asset management opportunities;
o complementary to existing asset base and align well with the
expertise and experience of the Asset Manager;
o further diversification of geographical location with
reduction in Scottish weighting in favour of the South East and of
risk through the creation of a wider spread of income through the
addition of 183 units let; and
o immediately income and earnings accretive
Details of the Firm Placing and the Placing
The Firm Placing is being conducted by way of an accelerated
bookbuild on the Company's behalf by Peel Hunt LLP ("Peel Hunt") as
Sole Bookrunner in conjunction with Cenkos Securities plc (the
"Joint Placing Agent"). The bookbuild will open with immediate
effect following this Announcement. The timing of the closing of
the bookbuild and the final size of the Firm Placing are at the
discretion of the Company, Peel Hunt and the Joint Placing Agent. A
further announcement will be made following closing of the book
confirming final details for the Firm Placing, expected to be made
by 7.00am on 5 December 2017.
The Placing is being conducted by way of a bookbuild on the
Company's behalf by Peel Hunt LLP as Sole Bookrunner in conjunction
with the Joint Placing Agent. The final size of the Placing, Open
Offer and Offer For Subscription and final allocations of New
Ordinary Shares are at the discretion of the Company, Peel Hunt and
the Joint Placing Agent. A further announcement will be made
following closing of the book, confirming the final details of the
Placing and Capital Raising, expected to be made by 7.00am on 20
December 2017.
The Appendix to this announcement (which forms part of the
announcement) sets out the terms and conditions of the Firm Placing
and the Placing. By choosing to participate in the Firm Placing
and/or the Placing and by making an oral or written offer to
acquire Firm Placing and/or Placing Shares, investors will be
deemed to have read and understood this announcement in its
entirety (including the Appendix) and to be making a legally
binding offer on the terms and subject to the terms and conditions
in it, and to be providing the representations, warranties and
acknowledgements contained in the Appendix.
Details of the Open Offer and Offer for Subscription will be set
out in the Prospectus.
Stephen Inglis, Chief Executive Officer of London & Scottish
Investments, the Asset Manager of Regional REIT, commented: "The
proposed transaction represents a transformational step forward in
Regional REIT's development. In our first two years as a listed
entity we have put in place the foundations for growth, shown we
can deliver on our objectives and built a strong track record in
the market which ensures a healthy pipeline of opportunities.
"This Capital Raising will allow us to significantly increase
our scale, strengthen and simplify our balance sheet, and position
us to capitalise on other opportunities in due course. As we enter
the next stage of Regional REIT's growth, we look forward to
welcoming new shareholders to the Company and would like to thank
our existing shareholders for their ongoing commitment and
support."
For further information:
Regional REIT Limited
Press Enquiries through Headland
Toscafund Asset Management Tel: +44 (0)
Investment Manager to the Group 20 7845 6100
Adam Dickinson, Investor Relations
for Regional REIT Limited
London & Scottish Investments Tel: +44 (0)
Limited 141 248 4155
Asset Manager to the Group
Stephen Inglis, Derek McDonald
Peel Hunt Tel: +44 (0)
Sponsor and Sole Bookrunner 20 7418 8900
Corporate: Capel Irwin, Edward
Fox
ECM Syndicate: Alastair Rae,
Sohail Akbar
Cenkos Tel: +44 (0)
Joint Placing Agent 20 7397 8900
Institutional Sales: Bob Morris,
George Fraser
Corporate: Alex Collins, Sapna
Shah
Headland Tel: +44 (0)
Financial PR 20 3805 4822
Francesca Tuckett, Bryony Sym,
Jack Gault
Expected timetable of principal events
Each of the times and dates in the table below is indicative
only and may be subject to change.
Record Time for entitlements 6.00 p.m. on 1 December
under the Open Offer 2017
Completion of the bookbuild 7.00 a.m. on 5 December
and announcement of results 2017
in respect of the Firm
Placing 8.00 a.m. on 5 December
Ex-Entitlements date 2017
for the Open Offer
Publication and despatch
of Prospectus, Form of
Proxy, Subscription Forms
and, to Qualifying non-CREST
Shareholders, Open Offer
Application Form 5 December 2017
Open Offer Entitlements
and Excess Open Offer
Entitlements credited
to stock accounts of
Qualifying CREST Shareholders As soon as possible
in CREST on 6 December 2017
Recommended latest time
for requesting withdrawal
of Open Offer Entitlements
and Excess Open Offer
Entitlements from CREST
(i.e. if your Open Offer
Entitlements and Excess
Open Offer Entitlements
are in CREST and you
wish to convert them 4.30 p.m. on 13 December
to certificated form) 2017
Latest time and date
for depositing Open Offer 3.00 p.m. on 14 December
Entitlements into CREST 2017
Latest time and date
for receipt of Forms
of Proxy and receipt
of electronic proxy appointments 11.00 a.m. on 15 December
via CREST 2017
Latest time and date
for splitting of Open
Offer Application Forms
(to satisfy bona fide 3.00 p.m. on 15 December
market claims only) 2017
Latest time and date
for receipt of completed
Open Offer Application
Forms and payment in
full under the Open Offer
or settlement of relevant
CREST instruction (as
appropriate). Open Offer
Entitlements and Excess
Open Offer Entitlements 11.00 a.m. on 19 December
disabled in CREST 2017
Latest time and date
for receipt of Placing 11.00 a.m. on 19 December
commitments 2017
Latest time and date
for receipt of completed
Subscription Forms in
respect of the Offer 11.00 a.m. on 19 December
for Subscription 2017
Extraordinary General 11.00 a.m. on 19 December
Meeting 2017
Announcement of results
of Extraordinary General by 7.00 a.m. on 20 December
Meeting 2017
Results of the Placing
and Capital Raising announced
through a Regulatory by 7.00 a.m. on 20 December
Information Service 2017
Admission and commencement
of dealings in New Ordinary 8.00 a.m. on 21 December
Shares 2017
Expected date of despatch
of definitive share certificates
for Open Offer Shares
(to Qualifying non-CREST
Shareholders) and new
Ordinary Shares under
the Offer for Subscription within 5 Business Days
Notes:
(i) CREST Shareholders should inform themselves of CREST's
requirements in relation to electronic proxy appointments.
(ii) Subject to certain restrictions relating to Shareholders
with a registered address outside the United Kingdom
The times and dates set out in the expected timetable of
principal events above and mentioned throughout this document are
indicative only and subject to change. If any of the times and/or
dates change, the revised time and/or date will be notified to the
London Stock Exchange, the UKLA and through a Regulatory
Information Service.
Different deadlines and procedures may apply in certain cases.
For example, Shareholders who hold their Existing Ordinary Shares
through a CREST member or other nominee may be set earlier
deadlines by the CREST member or other nominee than the times and
dates noted above.
Background to, and reasons for, the Capital Raising
The Company is an established UK real estate investor, asset
manager and developer which is listed on the premium listing
segment of the Official List of the UKLA and is admitted to trading
on the main market of the London Stock Exchange. The Company is
managed by the Asset Manager and the Investment Manager and was
formed from the combination of property funds previously created by
the Managers. The Company's commercial property portfolio is
located wholly in the UK and comprises, predominantly, quality
offices and industrial units located in the regional centres of the
UK outside of the M25 motorway. The portfolio is highly
diversified, with 150 properties, 1,093 individual units and 823
tenants as at 30 June 2017, with a valuation of GBP640.4
million.
The Company pursues its investment objective by investing in,
actively managing and disposing of regional property assets. The
Group offers investors a highly differentiated play on the recovery
prospects of UK regional property. The Company aims to deliver an
attractive return to its Shareholders, targeting 10-15 per cent.
per annum, with a strong focus on income and good capital growth
prospects.
The Group continues to see opportunities to purchase assets at
attractive yields and with the potential to secure good quality
income streams which can be distributed to Shareholders through the
Company's quarterly dividend programme. The Group's portfolio also
offers continued potential for capital growth, which has the
potential to supplement the income returns generated from the
Group's assets.
The Directors continue to see a wide range of acquisition and
development opportunities which meet the Group's acquisition and
investment criteria, giving rise to a strong pipeline of capital
deployment opportunities. These opportunities include the
Acquisitions described below.
Accordingly, the Group is seeking to raise additional finance
through the Capital Raising which it will seek to deploy, together
with debt finance where relevant and appropriate, in line with its
investment strategy, including, if sufficient proceeds are raised,
in connection with the Acquisitions and put the Group in a position
of strength when seeking to capitalise on this pipeline of
investment and risk controlled refurbishment opportunities.
The Directors believe that the Capital Raising also provides the
Group with the opportunity to capitalise on further economies of
scale that an enhanced capital base may bring, including through
debt refinancing. Moreover, an increase in the asset base of the
business without a commensurate increase in the cost base would
improve operational efficiency.
Key Terms of the Capital Raising
The Company is proposing to raise Gross Capital Raising Proceeds
of up to GBP100 million (Net Capital Raising Proceeds of up to
approximately GBP97m) by way of the Firm Placing, Placing, Open
Offer and Offer for Subscription of up to 99,009,900 New Ordinary
Shares, representing, in aggregate, 24.8 per cent. of the Enlarged
Issued Share Capital, at an Issue Price, in each case, of 101 pence
per New Ordinary Share.
The Capital Raising is not underwritten. Peel Hunt and the Joint
Placing Agent have agreed to use their reasonable endeavours to
place the Firm Placing Shares and the Placing Shares with
institutional and other investors at the Issue Price. The Placing,
but not the Firm Placing, may be scaled back in order to satisfy
valid applications under the Open Offer and/or the Offer for
Subscription, and the Offer for Subscription may be scaled back in
favour of the Placing and the Open Offer. The Directors have the
discretion to scale back the Placing and/or the Offer for
Subscription in favour of the Open Offer.
The Placing and Open Offer Agreement is conditional (inter alia)
upon the following:
-- the Prospectus being formally approved by the UKLA;
-- Open Offer Entitlements and of Qualifying Shareholders and
the Excess Open Offer Entitlements being admitted to CREST and
becoming enabled for settlement within CREST by not later than 8.00
a.m. on 6 December 2017;
-- the Directors approving and authorising the Capital Raising;
-- the Company allotting and issuing, subject only to Admission, the Placing Shares to Placees;
-- there having been no material adverse change in relation to
the Company, the Asset Manager or the Investment Manager.
-- minimum Gross Capital Raising Proceeds of GBP65 million (the
"Minimum Proceeds") being raised pursuant to the Capital
Raising;
-- the Capital Raising Resolution being passed by the
Shareholders at the Extraordinary General Meeting (without material
amendment);
-- the Placing and Open Offer Agreement becoming unconditional
in all respects (save the condition relating to Admission) and not
having been terminated in accordance with its terms before
Admission; and
-- Admission becoming effective by not later than 8.00 a.m. on
21 December 2017 (or such later time and/or date as the parties to
the Placing and Open Offer Agreement may agree, being not later
than 31 December 2017).
Accordingly, unless such conditions are satisified, or, if
applicable, waived, the Capital Raising and the Acquisitions will
not proceed, and any Open Offer Entitlements and Excess Open Offer
Entitlements admitted to CREST will thereafter be disabled and
application monies will be returned (at the applicants' risk)
without interest as soon as possible.
The Placing and Offer for Subscription may be scaled back at the
Company's discretion in consultation with Peel Hunt and Cenkos.
Priority will be given to the Open Offer but there will be no
priority given to applications under the Placing or the Offer for
Subscription.
The Firm Placing
The Firm Placing is proposed to raise gross proceeds of c,GBP50
million. The Firm Placing is subject to the same conditions as the
Placing and Open Offer. The Firm Placing Shares are not subject to
clawback to satisfy the valid applications by Qualifying
Shareholders under the Open Offer and not part of the Placing, Open
Offer or Offer for Subscription.
Regional REIT, Peel Hunt and Cenkos reserve the right to alter
the relative sizes of the Firm Placing and the Placing, Open Offer
and Offer For Subscription.
The Placing and Open Offer
The Placing and Open Offer is proposed to raise gross proceeds
of up to GBP50 million for Regional REIT. Peel Hunt and the Joint
Placing Agent, as placing agents of the Company, have agreed to use
reasonable endeavours to place the Placing Shares with
institutional investors. The number of Placing Shares issued may be
scaled back to satisfy valid applications by Qualifying
Shareholders under the Open Offer. Subject to the satisfaction or,
where applicable, waiver of the conditions and the Placing and Open
Offer Agreement not having been terminated in accordance with its
terms, any Open Offer Shares not subscribed for under the Open
Offer may be allocated to Placees or anyone subscribing for Offer
for Subscription Shares under the Offer for Subscription, with the
net proceeds of the Placing being retained by the Company.
The Board will have the ability to increase the size of the
Issue by up to 25 per cent. should there be sufficient demand.
The Placing may be scaled back at the Directors' discretion (in
consultation with Peel Hunt and Cenkos) to satisfy demand under the
Open Offer by allocating New Ordinary Shares that could otherwise
be available under the Placing to be available to Qualifying
Shareholders through the Excess Application Facility.
Open Offer Entitlements
Qualifying Shareholders will have the opportunity under the Open
Offer to subscribe for New Ordinary Shares at the Issue Price,
payable in full on application and free of expenses, pro rata to
their existing shareholdings, expected to be on the following
basis:
1 New Ordinary Share for every 8 Existing Ordinary Shares
held by them and registered in their names at the Record Time.
Fractions of Ordinary Shares will not be allotted and each
Qualifying Shareholder's entitlement under the Open Offer will be
rounded down to the nearest whole number. Fractional entitlements
to New Ordinary Shares will be aggregated and will ultimately
accrue for the benefit of the Company.
The Directors fully recognise the importance of pre-emption
rights for Shareholders and consequently 37,567,988 New Ordinary
Shares are expected to be offered to existing Shareholders by way
of the Open Offer. The Directors consider this appropriate and in
the best interests of Shareholders having regard to the ease of
execution of the Acquisitions.
Excess Application Facility
Qualifying Shareholders will be able to apply to subscribe for
Excess Shares using the Excess Application Facility, should they
wish. Qualifying Non-CREST Shareholders wishing to apply to
subscribe for Excess Shares will be able to do so by completing the
relevant sections on the Open Offer Application Form. Qualifying
CREST Shareholders who wish to apply to subscribe for more than
their Open Offer Entitlements will have Excess Open Offer
Entitlements credited to their stock account in CREST and should
refer to the Prospectus for further information on how to apply for
Excess Shares pursuant to the Excess Application Facility.
The Excess Application Facility is expected to comprise Open
Offer Shares that are not taken up by Qualifying Shareholders under
the Open Offer pursuant to their Open Offer Entitlements.
Qualifying Shareholders' applications for Excess Shares will,
therefore, be satisfied only to the extent that corresponding
applications by other Qualifying Shareholders are made for less
than their pro rata Open Offer Entitlements. If there is an
over-subscription resulting from excess applications, allocations
in respect of such excess applications will be scaled-back at the
absolute discretion of Peel Hunt in consultation with the Board,
who will have regard to the pro rata number of Excess Shares
applied for by Qualifying Shareholders under the Excess Application
Facility. No assurances can therefore be given that applications by
Qualifying Shareholders under the Excess Application Facility will
be met in full, in part or at all.
Offer for Subscription
New Ordinary Shares will also be available under the Offer for
Subscription at the Issue Price. Further information on the Offer
for Subscription and the terms and conditions of the Offer for
Subscription, including the procedure for application and payment,
will be set out in the Prospectus and, where relevant, in the
Subscription Form. The number of Offer for Subscription Shares
issued may be scaled back to satisfy valid applications by
Qualifying Shareholders under the Open Offer.
The Offer for Subscription may be scaled back at the Directors'
discretion (in consultation with Peel Hunt and the Joint Placing
Agent) to satisfy demand under the Open Offer by allocating New
Ordinary Shares that could otherwise be available under the Offer
for Subscription to be available to Qualifying Shareholders through
the Excess Application Facility.
Dividend Entitlement
At the time of 2015 Admission, the Company stated that it would
assemble a property portfolio supporting a target dividend between
seven to eight pence per annum at 100 pence per Existing Ordinary
Share.
As a REIT, the Company is required to distribute at least 90 per
cent. of the profits from its property rental business as
dividends.
Currently, the Company pays dividends on a quarterly basis with
dividends declared in or around February, May, August and November
in each year and paid as soon as practicable thereafter.
Other than the dividend declared on 14 November 2017, which is
expected to be paid on 22 December 2017, the Board has declared and
paid the following dividends totalling 14.05 pence per Ordinary
Share in respect of the period from 2015 Admission to the date of
publication of this announcement:
Year Declaration Date Amount
2015
Q4 (pursuant to 2015 Admission on
6 November 2015) 7 March 2016 1.00 pence per share
2016
Q1 27 May 2016 1.75 pence per share
Q2 1 September 2016 1.75 pence per share
Q3 17 November 2016 1.75 pence per share
Q4 23 February 2017 2.40 pence per share
2017
Q1 25 May 2017 1.80 pence per share
Q2 31 August 2017 1.80 pence per share
Q3 14 November 2017 1.80 pence per share
The next dividend is expected to be declared in March 2018 and
paid in April 2018 (the "Q4 Top Up Dividend"). The Board's current
intention is to pay an amount of approximately 2.45 pence per share
in relation to the Q4 Top Up Dividend.
The New Ordinary Shares issued in connection with the Capital
Raising will rank, from Admission, pari passu in all respects with
the Existing Ordinary Shares and will have the right to receive all
dividends and distributions declared in respect of issued Ordinary
Share capital of the Company after Admission, including the Q4 Top
Up Dividend.
The Company intends to pursue a progressive dividend policy and
its quarterly dividends provide a source of regular income for
Shareholders, thus improving their cashflow return profile.
The level of future dividends will be determined by the Board
having regard to, among other things, the financial position and
performance of the Group at the relevant time, UK REIT requirements
and the interests of Shareholders, as a whole.
Use of Proceeds and acquisition-related debt financing
The Company is seeking to raise Gross Capital Raising Proceeds
of up to GBP100 million from the Capital Raising and Peel Hunt and
the Joint Placing Agent have agreed to use their reasonable
endeavours to place the Firm Placing Shares and the Placing Shares
with institutional and other investors.
The Directors intend to use the proceeds of the Capital Raising
in the following order of priority:
-- up to GBP45.8 million of the Net Capital Raising Proceeds to
finance the First New Portfolio Acquisition (described below);
-- approximately GBP4 million of the Net Capital Raising Proceeds in respect of the costs of
refinancing certain of the Group's debt facilities (the
"Refinancing");
-- up to GBP47.6 million of the net proceeds of the Net Capital
Raising Proceeds to finance the Second New Portfolio Acquisition
(described below);
-- approximately up to GBP4.9 million of the Net Capital Raising
Proceeds to finance a pipeline investment (the "Pipeline
Investment") which is in advanced negotiations and which the
Company expects to complete by March 2018; and
-- the remaining net proceeds to capitalise on the pipeline of
other investment and risk-controlled refurbishment
opportunities
Debt financing
First New Portfolio Facility
The Company intends to put in place a new debt facility of
GBP19.4 million as soon as possible following completion of the
First New Portfolio Acquisition in order to refinance the First New
Portfolio Acquisition (the "First New Portfolio Facility"). The
First New Portfolio Facility is fully committed.
The Directors intend to use approximately GBP17.4 million of the
First New Portfolio Facility to refinance the First New Portfolio
Acquisition and approximately GBP2 million to part finance the
Pipeline Investment.
The First New Portfolio Facility will be provided by Royal Bank
of Scotland Plc to the First Portfolio Target Companies, and will
be provided at an interest rate equal to the aggregate of (i) two
per cent. per annum and (ii) LIBOR for sterling for the relevant
interest period.
Second New Portfolio Facility
As part of the Company's proposed refinancing of the Second New
Portfolio Acquisition, the Company and Santander UK have agreed
indicative terms and conditions in relation to a new debt facility
(the "Second New Portfolio Facility").
The Directors intend for the agreement in relation to the Second
New Portfolio Facility (the "Second New Portfolio Facility
Agreement") to be signed on or shortly following completion of the
Second New Portfolio Acquisition.
The Second New Portfolio Facility will be provided at an
interest rate of 2.15 per cent. per annum. The availability of the
Second New Portfolio Facility is conditional upon completion of the
Refinancing.
The Acquisitions
The First New Portfolio
The Company (through its wholly owned subsidiary Midco) has
conditionally agreed to acquire a portfolio of three real estate
properties from NW UK III Limited for aggregate cash consideration
expected to be approximately GBP43.44 million after any relevant
completion account adjustments (the "First New Portfolio
Acquisition").
The First New Portfolio comprises office properties in Woking,
Cheshunt and Edinburgh with 25 lettable units with a total of 18
individual tenants and a high level of occupancy (88 per cent. by
lettable area). The First New Portfolio was valued at GBP43.5
million as at 8 November 2017, with a combined contracted rent roll
of GBP3.6 million per annum reflecting a yield of 8 per cent. on a
weighted average unexpired lease term of 6.4 years (3.3 years to
first break).
The aggregate cash consideration payable for the First New
Portfolio is expected to be equal to the aggregate market value of
the First New Portfolio, which takes into account costs of the
acquisition, and therefore the Directors expect there to be little
or no diminution in the Company's Net Asset Value as a result of
the First New Portfolio Acquisition.
The Company estimates that the First New Portfolio Acquisition
will be immediately earnings enhancing.
The Pipeline Investment comprises an office property in
Portsmouth and, combined with the First New Portfolio, would result
in a portfolio of 26 lettable units with a total of 19 individual
tenants and occupancy of 90 per cent. by lettable area. The
combined portfolio is estimated to have a total contracted rent
roll of GBP4 million per annum reflecting a yield of 8.1 per cent.
on a weighted average unexpired lease term of 6.6 years (3.4 years
to first break).
The Second New Portfolio
The Company (through its wholly owned subsidiary Midco) has
conditionally agreed to acquire a portfolio of 17 office properties
from Archimedes Real Estate LP (a fund managed by M7 Real Estate
Limited) for aggregate cash consideration equal to the estimated
net asset value of the assets of the corporate owner of the Second
New Portfolio, less its aggregate liabilities, immediately prior to
completion of the acquisition (the "Second New Portfolio
Acquisition").
The Second New Portfolio comprises office properties with 210
lettable units with a total of 136 individual tenants and 75 per
cent. occupancy by lettable area. The portfolio was valued at
GBP44.8 million as at 8 November 2017, with a combined contracted
rent roll of GBP4.2 million per annum reflecting a yield of 9.2 per
cent. on a weighted average unexpired lease term of 3.1 years (2.1
years to first break).
The Second New Portfolio Acquisition is conditional upon the
Company raising and being in receipt of net proceeds of at least
GBP75 million pursuant to the Capital Raising (the "Second New
Portfolio Capital Raising Condition"). After the refinancing of the
First New Portfolio Acquisition, and assuming minimum net proceeds
pursuant to the Capital Raising of at least GBP75 million, the
consideration for the Second New Portfolio Acquisition is expected
to be funded using the proceeds of the Capital Raising.
The Company expects to be able to waive the Second New Portfolio
Capital Raising Condition if the Minimum Proceeds are raised and
the Second New Portfolio Facility is available.
The Company estimates the Second New Portfolio Acquisition will
be immediately earnings-enhancing.
The Refinancing
The Asset Manager is in the process of arranging a new 10 year
long term debt facility (the "Long- term Facility"), in relation to
which terms have been agreed and credit approval has been obtained
with two lenders (the "New Lenders"). The Long-term Facility will
replace the following five of the Group's existing bank facilities
with Santander UK, The Royal Bank of Scotland Plc and Lloyds
Banking Group, which in aggregate amounts to approximately GBP164
million:
Borrower Provider Amount outstanding
as at 4 December
2017,
GBP'000
TCP Channel Ltd Santander UK 20,840
TCP Arbos Ltd Royal Bank of Scotland 24,450
RR Wing Portfolio
Limited Santander UK 30,990
RR Rainbow Portfolio Royal Bank of Scotland 39,848
Lamont and Tapp
Portfolio Lloyds Banking Group 48,100
The total interest cost of the refinancing is anticipated to be
3.3 per cent. to 3.4 per cent. fixed for the duration of the
Long-term Facilities. It is anticipated that the Long-term
Facilities will contain customary undertakings and events of
default, along with financial covenants, including in relation to
historic interest, projected interest cover and loan to value
ratio. Completion of the Long-term Facilities is expected to take
place in December 2017.
The Group's remaining borrowings consist of the Zero Dividend
Preference Shares (comprising a total amount of approximately GBP37
million due to mature in January 2019) and the ICG Longbow Ltd
facility of GBP65 million (due to mature in August 2019). The Group
intends, in due course, to refinance the Zero Dividend Preference
Shares or alternatively to repay them using existing resources
raised at the time in the ordinary course of the Group's business
and to refinance the ICG Longbow Ltd facility.
Current trading and prospects
On 14 September 2017, the Company released its interim financial
results to 30 June 2017. A summary of the key financial and
operational highlights from those results is set out below:
Financial highlights
In the period to 30 June 2017, the gross investment property
portfolio was GBP640.4 million. This represents a like-for-like
valuation increase of GBP7.5 million.
In a 'NAV-for-NAV' transaction, the Group acquired a mixed
portfolio of office, industrial, retail and leisure properties for
approximately GBP129 million from The Conygar Investment Company
plc (the "Conygar Acquisition").
Gross bank borrowings rose from GBP220.1 million for the year
ended 31 December 2016, to GBP298.7 million for the six months
ended 30 June 2017, with the increase part funding the Conygar
Acquisition. The overall cost of bank debt declined in the period
to 3.3 per cent. per annum. As part of the Conygar Acquisition, the
Group also acquired zero dividend preference shares, and as 4
December 2017 approximately GBP37 million is outstanding on these
shares.
Following the Conygar Acquisition, net LTV reduced from 49 per
cent. to 47.3 per cent. Operating profit increased to GBP21.8
million, up from GBP12.1 million for the year ending 31 December
2016.
The fully diluted EPRA NAV was 107.3 pence per share, up from
106.9 pence per share for the year ending 31 December 2016.
Dividends declared for the period ending 30 June 2017 amounted to
3.60 pence per share, which represented an increase of 2.9 per
cent. from the period ending 30 June 2016.
Operational highlights
In the period to 30 June 2017, occupancy (by value) was 83.3 per
cent., up from 82.7 per cent. for the year ended 31 December 2016.
Occupancy by area was at 83.1 per cent., down from 83.8 per cent.
for the year ended 31 December 2016.
Office real estate amounted to 62.8 per cent. (by value) of the
Existing Property Portfolio for the period ending 30 June 2017,
while industrial real estate amounted to 26 per cent. of the
Existing Property Portfolio. Retail and other real estate sectors
remain non-core to the Group, amounting to 11.2 per cent. of the
Existing Property Portfolio.
As at 30 June 2017, the largest single tenant represented 3 per
cent. of gross rental income, while the largest property
represented 5 per cent. of the Existing Property Portfolio.
Since 2015 Admission, the Company has achieved total shareholder
return of 17.8 per cent., at an annualised rate of 10.7 per
cent.
Activities since 30 June 2017
Since 30 June 2017, the following significant events have
occurred:
-- The Group completed the acquisition of Woodlands Court,
Bristol, for GBP6.55 million, a development of four single-storey
offices buildings totalling 37,952 sq. ft., providing a rental
income of GBP595,000 pa. The property is located proximate to the
Group's existing properties in the north Bristol area.
-- The Group disposed of St James House, Bath, a fully-let
modern office development over the ground and three upper floors,
totalling 14,507 sq. ft. with 30 parking spaces, situated to the
south of Bath city centre, producing a rental income of GBP297,662
pa. The property was sold for GBP4.6 million, a net initial yield
of 6.1 per cent. including costs, well ahead of its 31 December
2016 valuation.
-- The Group has secured a number of additional lettings and
re-gears. Most notably, the Group agreed a letting with SCS of Unit
1A, a 65,503 sq. ft. industrial warehouse, the largest void at
Juniper Park, Basildon, effective September 2017. The lease will be
for 10 years, with a break at year five, at an initial average rent
of some GBP328,000 pa. In addition, industrial occupancy will also
be improved following a lease agreement and the imminent completion
of landlord works at Unit 131B Heathhall Industrial Estate,
Dumfries (50,661 sq.ft.).
-- On 10 November 2017, the Group exchanged contracts to sell a
development site in Leeds for GBP10.5 million on a
subject-to-planning basis to Unite Students, the UK's leading
manager and developer of student accommodation. The 21,000 sq ft
site currently provides leisure accommodation over two levels. It
was acquired by the Group in March 2016 as part of the Wing
Portfolio together with the adjacent 19 storey Arena Point office
tower. The sale sees the Group retaining the 77,000 sq ft 19 storey
landmark Arena Point office tower. The Group continues to invest in
the refurbishment of the remaining floors, having recently let the
6th and 7th floors to Interserve.
-- On 23 November 2017, the Group agreed a new GBP52.4 million
secured facility with Santander UK with a 5-year term maturing in
November 2022, replacing, at a competitive rate, the current
three-year debt facility with Santander UK of GBP47.8 million,
which was due to mature in December 2018.
Future prospects
In the third quarter of 2017 the Group maintained a strong pace
of lettings and continued to see a good level of interest in both
its office and industrial properties, which is expected to improve
occupancy rates across the portfolio in the near term.
While the Board is aware of general economic caution in light of
uncertainty over the recent UK general election result and
negotiations in respect of the UK's decision to exit the European
Union and the potential for rises in inflation and interest rates,
it believes that the Group is well placed to meet the challenges
that could arise in this environment. The Group owns a sizeable
portfolio with critical mass. It is cash generative with an
occupier base representing some of the strongest covenants in the
UK office and light industrial sectors. The Board therefore remains
optimistic in its outlook for the Company.
Prospectus
The Prospectus containing full details of how Regional REIT
Shareholders can participate in the Open Offer, and containing the
notice of the General Meeting expected to be held at 11.00 a.m. on
19 December 2017, is expected to be published on, or around 5
December 2017. Completion of the Capital Raising is conditional
upon, inter alia, the Company raising the Minimum Proceeds and the
passing of the Capital Raising Resolution to be proposed at the
General Meeting.
The persons responsible for arranging for the release of this
announcement on behalf of the Company are the Directors.
Definitions
The following terms apply throughout this document unless the
context otherwise requires:
"2015 Admission" the admission of the Existing Ordinary Shares
to the Official List and trading on the London Stock Exchange's
main market for listed securities which occurred on 6 November
2015;
"Acquisitions" the First New Portfolio Acquisition and the
Second New Portfolio Acquisition;
"Admission" admission of New Ordinary Shares to be issued
pursuant to the Capital Raising to (i) the Official List and
(ii)trading on the London Stock Exchange's main market for listed
securities becoming effective in accordance with, respectively, the
Listing Rules and the Admission and Disclosure Standards;
"Admission and Disclosure Standards" the requirements contained
in the publication "Admission and Disclosure Standards" issued by
the
London Stock Exchange (as amended from time to time) containing,
inter alia, the admission requirements to be observed by companies
seeking admission to trading on the London Stock Exchange's market
for listed securities;
"Asset Manager" London & Scottish Investments Limited, a
private limited company incorporated in Scotland with registered
number SC407794 and whose registered office is at 8 Elmbank
Gardens, Glasgow, G2 4NQ;
"Board" the board of Directors of the Company;
"Business Day" any day (other than a Saturday or Sunday or any
public holiday in England and Wales) on which banks generally are
open for the transaction of normal banking business in the City of
London;
"certificated" or "in certificated form"
in relation to a share or other security, a share or other
security, title to which is recorded in the relevant register of
the share or other security concerned as being held in certificated
form (that is, not in CREST);
"Capital Raising" the Firm Placing, the Placing, the Open Offer
and the Offer for
Subscription;
"Capital Raising Resolution" the resolution to be proposed at
the Extraordinary General
Meeting to approve the allotment of New Ordinary Shares pursuant
to the Capital Raising;
"Chairman" the chairman of the Company;
"Companies Law" The Companies (Guernsey) Law 2008, as
amended;
"Company" Regional REIT Limited, a limited company incorporated
in Guernsey, Channel Islands with registered number 60527 and whose
registered office is at Mont Crevelt House, Bulwer Avenue, St
Sampson, Guernsey GY2 4LH;
"CREST" the paperless settlement procedure operated by Euroclear
enabling system securities to be evidenced otherwise than by
certificates and transferred otherwise than by written
instrument;
"CREST Deposit Form" the form used to deposit securities into
the CREST system in the
United Kingdom;
"CREST member" a person who has been admitted by Euroclear as a
system-member
(as defined in the CREST Regulations;
"CREST Regulations" the Uncertificated Securities Regulations
2001 (SI 2001/3755);
"Directors" the directors of the Company (each a
"Director");
"Disapplication Resolution" the resolution to disapply
pre-emption rights to be proposedat the Extraordinary General
Meeting ;
"Disclosure Guidance and Transparency Rules"
the disclosure guidance and transparency rules made by the FCA
pursuant to Part 6 FSMA, as amended from time to time;
"Enlarged Issued Share Capital" the Existing Ordinary Shares
together with the New Ordinary
Shares to be issued pursuant to the Capital Raising;
"EEA" the European Economic Area;
"EPRA" the European Public Real Estate Association;
"EPRA NAV" a measure of net asset value designed by EPRA to
present net asset value excluding the value of instruments that are
held for long term benefit, net of tax;
"Euroclear" Euroclear UK & Ireland Limited, a company
registered in England and Wales under registered number
02878738;
"Excess Application Facility" the facility for Qualifying
Shareholders to apply for Excess Shares
in excess of their Open Offer Entitlements;
"Excess Open Offer Entitlements" in respect of each Qualifying
CREST Shareholder who has taken up
his Open Offer Entitlement in full, the entitlement (in addition
to the Open Offer Entitlement) to apply for Excess Shares, up to
the number of Open Offer Shares, credited to his stock account in
CREST pursuant to the Excess Application Facility, which may be
subject to scaling-back in accordance with the terms of this
document;
"Excess Shares" Open Offer Shares which may be applied for in
addition to Open Offer Entitlements;
"Existing Ordinary Shares" the existing Ordinary Shares in issue
at the date of this document;
"Extraordinary General Meeting" the extraordinary general
meeting of the Company to be
held to consider the Capital Raising Resolution, the
Disapplication Resolution,
"
"FCA" the UK Financial Conduct Authority (or any successor
regulatory organisation);
"Firm Placee" any person who conditionally agrees to subscribe
for Firm Placing Shares;
"Firm Placing" the placing by Peel Hunt, as agent of and on
behalf of the Company, of the Firm Placing Shares on the terms and
subject to the conditions contained in the Placing and Open Offer
Agreement;
"Firm Placing Shares" c.50,000,000 New Ordinary Shares proposed
to be allotted and issued by
the Company pursuant to the Firm Placing;
"First New Portfolio" the property portfolio which the Company
(through Midco) has
agreed to indirectly acquire;
"First New Portfolio Acquisition" the acquisition by Midco of
the First New Portfolio;
"FSMA" the Financial Services and Markets Act 2000, as
amended;
"Gross Capital Raising Proceeds" up to GBP100 million;
"Group" the Company and its subsidiary undertakings from time to
time and "Group Company" shall mean any one of them;
"Investment Manager" Toscafund Asset Management LLP, registered
in England and
Wales with registered number OC320318;
"Issue Price" 101 pence per New Ordinary Share;
"Joint Placing Agent" Cenkos Securities plc;
"Link Asset Services" a trading name of Link Market Services
Limited;
"Listing Rules" the rules and regulations made by the FCA under
section 73A of FSMA;
"London Stock Exchange" London Stock Exchange plc;
"LTV" loan-to-value;
"Midco" Regional Commercial Midco Limited, a private limited
company incorporated in Jersey, Channel Islands with registered
number 118888 and whose registered office is at First Floor, Le
Masurier House, La Rue Le Masurier, St Helier, Jersey JE2 4YE;
"Net Asset Value" or "NAV" the aggregate value of the assets of
the Company after deduction of
all liabilities, determined in accordance with the accounting
policies adopted by the Company from time to time;
"Net Capital Raising Proceeds" the Gross Capital Raising
Proceeds less applicable fees and
expenses of the Capital Raising;
"New Ordinary Shares" the Firm Placing Shares, the Placing
Shares, the Open Offer Shares and the Offer for Subscription
Shares;
"Offer for Subscription" the offer for subscription of New
Ordinary Shares at the Issue Price
on the terms set out in this document;
"Offer for Subscription Shares" New Ordinary Shares proposed to
be allotted and issued by
the Company pursuant to the Offer for Subscription;
"Official List" the Official List of the UKLA;
"Open Offer" the invitation by the Company to Qualifying
Shareholder(s) to apply for Open Offer Shares, on the term and
conditions set out in this document and, in the case of Qualifying
non-CREST shareholders, in the Open Offer Application Form;
"Open Offer Application Form" the personalised application form
through which Qualifying
Non-CREST Shareholders may apply for New Ordinary Shares under
the Open Offer;
"Open Offer Entitlements" the entitlement of a Qualifying
Shareholder to apply for 1 Open
Offer Shares for every 8 Existing Ordinary Share held by him on
the Record Date;
"Open Offer Shares" New Ordinary Shares being offered to
Qualifying Shareholders pursuant to the Open Offer;
"Peel Hunt" Peel Hunt LLP;
"Placing" the proposed placing, by Peel Hunt and Joint Placing
Agent, as agent of and on behalf of the Company, of the Placing
Shares on the terms and subject to the conditions contained in the
Placing and Open Offer Agreement;
"Placing Placee" any person who will conditionally agree to
subscribe for the Placing Shares;
"Placing and Open Offer Agreement"
the Placing and Open Offer Agreement dated 4 December 2017
between the Company and Peel Hunt,
"Placing Shares" New Ordinary Shares proposed to be allotted and
issued by the Company pursuant to the Placing;
"Prospectus Directive" EU Prospectus Directive (2003/71/EU), and
amendments thereto,
including the 2010 PD Directive to the extent implemented in the
Relevant Member State) and includes any relevant implementing
measure;
"Prospectus Directive Regulation" Commission Regulation (EC) No 809/2004;
"Prospectus Rules" the prospectus rules made by the FCA pursuant
to Part 6 FSMA, as amended from time to time;
"Qualified Investor" persons in member states of the EEA who are
"qualified investors"
within the meaning of Article 2(1)(e) of the Prospectus
Directive;
"Qualifying CREST Shareholders" Qualifying Shareholders holding
Ordinary Shares in uncertificated
form;
"Qualifying Non-CREST Shareholders"
Qualifying Shareholders holding Ordinary Shares in certificated
form;
"Qualifying Shareholder" holders of Ordinary Shares on the
register of members of the
Company at the Record Time other than Restricted
Shareholders;
"Record Time" 6.00 p.m. on 1 December 2017;
"Receiving Agent" Link Asset Services;
"Regulatory Information Service" or "RIS"
any channel recognised as a channel for the dissemination of
regulatory information by listed companies as defined in the
Listing Rules;
"Regulation D" Regulation D under the US Securities Act;
"Regulation S" Regulation S under the US Securities Act;
"Regulations" the Uncertificated Securities (Guernsey)
Regulations 2001 (SI 2001/3755);
"REIT" a company or group to which Part 12 CTA 2010 applies;
"
"Relevant Member State" each member state of the EEA which has
implemented the
Prospectus Directive;
"Restricted Jurisdiction" any jurisdiction, including but not
limited to Australia, New
Zealand, Canada, the Republic of South Africa, Japan and the
United States, where the extension or availability of the Capital
Raising (and any other transaction contemplated thereby) would
(i) result in a requirement to comply with any governmental or
other consent or any registration filing or other formality which
the Company regards as unduly onerous; or (ii) otherwise breach any
applicable law or regulation;
"Restricted Shareholder" subject to certain exceptions,
Shareholders who have registered
addresses in, who are incorporated in, registered in or
otherwise resident or located in, the United States or any other
Restricted Jurisdiction;
"Second New Portfolio" the property portfolio which the Company
(through Midco) has
agreed to indirectly acquire;
"Second New Portfolio Acquistion" the acquisition by Midco of the Second New Portfolio;
"Shareholder" a holder of an Ordinary Share (together
"Shareholders");
"Sterling" pounds sterling, the lawful currency of the United
Kingdom;
"Subscription Form" the application form in the Prospectus for
use in
connection with the Offer for Subscription;
"UKLA" the UK Listing Authority, being a division of the FCA and
the competent authority in the United Kingdom for the purposes of
Part VI of FSMA;
"uncertificated" or "in uncertificated form"
in relation to a share or other security, a share or other
security, title to which is recorded in the relevant register of
the share or other security concerned as being held in
uncertificated form (that is, in CREST) and title to which may be
transferred by using CREST;
"United Kingdom" or "UK" the United Kingdom of Great Britain and
Northern Ireland;
"United States" or "US" the United States of America, its
territories and possessions, any
state of the United States of America, the District of Columbia,
and all other areas subject to its jurisdiction, including its
territories;
"US Investment Company Act" the United States Investment Company
Act of 1940, as amended;
"US Person" has the meaning given to it in Rule 902 under the US
Securities Act, except where such term is used in connection with
taxation; and
"US Securities Act" the United States Securities Act of 1933, as
amended.
Important Notices
This announcement has been issued by Regional REIT and is the
sole responsibility of Regional REIT. The information in this
announcement is for background purposes only and does not purport
to be full or complete. The material set out herein is for
information purposes only and should not be construed as an offer
of securities for sale in the United States or any other
jurisdiction. The information contained in this announcement is
given at the date of its publication (unless otherwise stated) and
is subject to updating, revision and amendment. In particular, the
proposals referred to herein are tentative and are subject to
verification, material updating, revision and amendment.
This announcement is not an offer of securities for sale, or an
offer to buy or subscribe for, directly or indirectly, securities
to any person in the United States of America or any other
jurisdiction, including in or into Australia, New Zealand, Canada,
the Republic of South Africa and Japan or any other jurisdiction in
which such offer or solicitation is unlawful. This announcement is
an advertisement and not a prospectus (or prospectus equivalent
document). A prospectus in connection with the proposed firm
placing, placing, open offer and offer for subscription (together,
the "Capital Raising") and the admission of the new ordinary shares
of no par value in the Company ("New Ordinary Shares") to be issued
pursuant to the Capital Raising to listing on the premium listing
segment of the Official List of the Financial Conduct Authority
("FCA") and to trading on the Main Market for listed securities of
London Stock Exchange plc (together, "Admission") is expected to be
published by the Company on or around 5 December 2017. A copy of
the Prospectus will, following publication, be available on the
Company's website (www. regionalreit.co.uk) and be available for
viewing at the National Storage Mechanism at
https://www.morningstar.co.uk/uk/NSM.
The distribution or publication of this announcement, any
related documents, and the offer, sale and/or issue of the New
Ordinary Shares in certain jurisdictions may be restricted by law.
Persons into whose possession any document or other information
referred to herein comes are required to inform themselves about
and to observe any such restrictions. Any failure to comply with
these restrictions may constitute a violation of the securities
laws of such jurisdiction.
This announcement does not constitute or form part of an offer
to sell, or the solicitation of an offer to buy or subscribe for,
New Ordinary Shares to any person in the United States, Australia,
New Zealand, Canada, the Republic of South Africa and Japan, or in
any jurisdiction to whom or in which such offer or solicitation is
unlawful and, in particular, is not for release, publication or
distribution in or into the United States, Australia, New Zealand,
Canada, the Republic of South Africa and Japan.
No action has been, or will be, taken by Regional REIT or any
other person to permit a public offer or distribution of this
announcement, or any related documents, in any jurisdiction where
action for that purpose may be required, other than in the United
Kingdom.
This announcement is not an offer of securities for sale in the
United States, and is not for publication or distribution, directly
or indirectly, in or into the United States. This announcement is
not an offer of securities for sale into the United States. The New
Ordinary Shares and the Open Offer Entitlements referred to herein
have not been, and will not be, registered under the US Securities
Act or any relevant securities laws of any state or other
jurisdiction of the United States and, subject to limited certain
exceptions, may not be offered, sold, taken up, exercised, resold,
renounced, transferred or delivered, directly or indirectly, within
the United States. No public offering of securities is being made
in the United States and the New Ordinary Shares are being offered
or sold outside the United States in reliance on Regulation S. The
Company has not been, and will not be, registered under the US
Investment Company Act of 1940, as amended (the "US Investment
Company Act"), and investors will not be entitled to the benefits
of that Act. The New Ordinary Shares made available under the Firm
Placing and Placing are being offered and sold (i) in the United
States only to persons reasonably believed to be (a) qualified
institutional buyers (each a "QIB") as defined in Rule 144A under
the US Securities Act who are also qualified purchasers ("QPs") as
defined in section 2(a)(51) of the US Investment Company Act and
(b) accredited investors (each an "Accredited Investor") as defined
in Rule 501 of Regulation D under the US Securities Act who are
also QPs and, in each such case, in reliance on Section 4(a)(2) of,
and Rule 506(b) under, the US Securities Act or pursuant to another
exemption from, or in a transaction not subject to, the
registration requirements of the US Securities Act; and (ii)
outside of the United States to persons who are not US Persons (as
defined in Regulation S) in offshore transactions in reliance on
Regulation S. For a description of these and certain further
restrictions on offers, sales and transfers of the New Ordinary
Shares, see Terms and Conditions of the Firm Placing and the
Placing.
The New Ordinary Shares and the Open Offer Entitlements have not
been and will not be registered under the applicable securities
laws of Australia, New Zealand, Canada, the Republic of South
Africa and Japan. Subject to certain exceptions, the New Ordinary
Shares and the Open Offer Entitlements referred to herein may not
be offered or sold in Australia, New Zealand, Canada, the Republic
of South Africa or Japan or to, or for the account or benefit of,
any national, resident or citizen of Australia, New Zealand,
Canada, the Republic of South Africa or Japan. There will be no
public offer of securities in Australia, New Zealand, Canada, the
Republic of South Africa and Japan.
The New Ordinary Shares are only suitable for investors who
understand the potential risk of capital loss, for whom an
investment in the New Ordinary Shares is part of a diversified
investment programme and who fully understand and are willing to
assume the risks involved in such an investment programme. There is
no guarantee that the Capital Raising will proceed and that
Admission will occur and you should not base your financial
decisions on Regional REIT's intention in relation to the Capital
Raising and Admission at this stage. Acquiring New Ordinary Shares
to which this announcement relates may expose an investor to a
significant risk of losing all of the amount invested. When
considering what further action you should take you are recommended
to seek your own financial advice immediately from your
stockbroker, bank manager, solicitor, accountant, fund manager or
other appropriate independent financial adviser duly authorised
under the Financial Services and Markets Act 2000 (as amended)
("FSMA"), if you are resident in the United Kingdom, or, if not,
from another appropriately authorised independent financial
adviser. This announcement does not constitute a recommendation
concerning the Capital Raising. The price and value of the New
Ordinary Shares may decrease as well as increase. Information in
this announcement, past performance and any documents relating to
the Capital Raising or Admission cannot be relied upon as a guide
to future performance. Potential investors should consult a
professional adviser as to the suitability of the Capital Raising
for the person concerned.
This announcement contains statements which are based on the
Directors' current expectations and assumptions and involve known
and unknown risks and uncertainties that could cause actual
results, performance or events to differ materially from those
expressed or implied in such statements. These statements include
forward-looking statements both with respect to the Group and the
markets in which the Group operates. Statements which include the
words "expects", "intends", "plans", "believes", "projects",
"anticipates", "will", "targets", "aims", "may", "would", "could",
"continue" or, in each case, their negative or other variations,
and similar statements of a future or forward-looking nature,
identify forward-looking statements. It is believed that the
expectations reflected in these statements are reasonable, but they
may be affected by a number of variables which could cause actual
results or trends to differ materially, including (but not limited
to) any limitations of Regional REIT's internal financial reporting
controls; an increase in competition; an unexpected decline in
turnover, rental income or the value of all or part of the Group's
property portfolio; legislative, fiscal and regulatory
developments; and currency and interest rate fluctuations. Each
forward-looking statement speaks only as of the date of this
announcement. Except as required by the rules of the FCA (and, in
particular, the Disclosure Guidance and Transparency Rules and the
Market Abuse Regulation), the London Stock Exchange, the Listing
Rules or by law (in particular, FSMA), Regional REIT expressly
disclaims any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statements contained in
this announcement to reflect any change in Regional REIT's
expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is based.
All subsequent written and oral forward-looking statements
attributable to any person involved in the preparation of this
announcement or to persons acting on Regional REIT's behalf are
expressly qualified in their entirety by the cautionary statements
referred to above and contained elsewhere in this announcement.
By their nature, forward-looking statements involve known and
unknown risks and uncertainties because they relate to events and
depend on circumstances that may or may not occur in the future.
Forward-looking statements are not guarantees of future
performance. The Group's actual results of operations, financial
condition, prospects, growth, strategies and dividend policy, and
the development of the industry in which it operates, may differ
materially from the impression created by the forward-looking
statements contained in this announcement. In addition, even if the
results of operations, financial condition, prospects, growth,
strategies and the dividend policy of Regional REIT, and the
development of the industry in which it operates, are consistent
with the forward-looking statements contained in this announcement,
those results or developments may not be indicative of results or
developments in subsequent periods.
Any forward-looking statement contained in this announcement
based on past or current trends and/or activities of the Group
should not be taken as a representation that such trends or
activities will continue in the future. No statement in this
announcement is intended to be a profit forecast or to imply that
the earnings of the Group for the current year or future years will
necessarily match or exceed the historical or published earnings of
the Group.
Each of Peel Hunt and Cenkos and their respective affiliates,
expressly disclaims any obligation or undertaking to update, review
or revise any forward-looking statement contained in this
announcement whether as a result of new information, future
developments or otherwise.
Peel Hunt is authorised and regulated by the FCA in the United
Kingdom. Peel Hunt is acting exclusively for Regional REIT and
no-one else in connection with the Capital Raising, and will not
regard any other person as its client in relation to the Capital
Raising, and will not be responsible for providing the protections
afforded to Peel Hunt clients, nor for giving advice in relation to
the Capital Raising, or any arrangement referred to in, or
information contained in, this announcement.
Cenkos, which is authorised and regulated by the FCA in the
United Kingdom, is acting exclusively for Regional REIT in
connection with the Capital Raising and will not be responsible to
anyone other than Regional REIT for providing the protections
afforded to clients of Cenkos or for providing advice in relation
to the matters described in this announcement.
In connection with the Capital Raising, each of Peel Hunt and
Cenkos, or any of their respective affiliates, may take up a
portion of the New Ordinary Shares and/or related instruments in
connection with the Capital Raising as a principal position and in
that capacity may retain, purchase, sell, offer to sell for their
own account(s) such New Ordinary Shares and/or related instruments
in connection with the Capital Raising or otherwise. Accordingly,
references in the Prospectus, once published, to the New Ordinary
Shares being issued, offered, subscribed, acquired, placed or
otherwise dealt in should be read as including any issue or offer
to, or subscription, acquisition, placing or dealing by Peel Hunt
and Cenkos, or any of their respective affiliates, acting as
investors for their own accounts. Except as required for legal or
regulatory obligations to do so, Peel Hunt and Cenkos do not
propose to make any disclosure in relation to the extent of any
such investments or transactions.
None of Peel Hunt and Cenkos, any of their respective
affiliates, or any of their or their affiliates' respective
directors, officers or employees, advisers or agents accepts any
responsibility or liability whatsoever for the contents of this
announcement, or no representation or warranty, express or implied,
is made as to the accuracy, completeness, correctness or fairness
of the information or opinions contained in, this announcement or
any document referred to in this announcement (or whether any
information has been omitted from this announcement or any document
referred to in this announcement) or any other information relating
to Regional REIT or their respective subsidiaries or affiliates,
whether written, oral or in a visual or electronic form, and
howsoever transmitted or made available or for any loss howsoever
arising from any use of the announcement or its contents or
otherwise arising in connection therewith. Accordingly, each of
Peel Hunt and Cenkos, their respective affiliates, and each of
their and their affiliates' respective directors, officers,
employees and agents, and any other person acting on their behalf,
expressly disclaims any and all liability whatsoever for any loss
howsoever arising from, or in reliance upon, the whole or any part
of the contents of this announcement, whether in tort, contract or
otherwise which they might otherwise have in respect of this
announcement or its contents or otherwise arising in connection
therewith.
The contents of this announcement are not to be construed as
legal, financial or tax advice. Each prospective investor should
consult his own legal adviser, financial adviser or tax adviser for
legal, financial or tax advice, respectively.
APPIX: TERMS AND CONDITIONS OF THE FIRM PLACING AND THE
PLACING
1. ELIGIBLE PARTICIPANTS
Members of the public are not eligible to take part in the Firm
Placing or the Placing. This appendix and the terms and conditions
set out herein are for information purposes only and are directed
only at:
(a) persons in member states of the European Economic Area who
are "qualified investors" within the meaning of article 2(1)(e) of
the Prospectus Directive (Directive 2003/71/EC, as amended by the
2010 PD Amending Directive (Directive 2010/73/EU)) ("Qualified
Investors"),
(b) where addressed to and directed to persons in the United
Kingdom, to persons who are also those:
(i) who have professional experience in matters relating to
investments falling within article 19(5) of the Financial Services
and Markets Act 2000 (Financial Promotion) Order 2005 (as amended)
(the "FPO"); or
(ii) who are high net worth entities as described in article 49(2) of the FPO; or
(iii) to whom it may otherwise be lawfully communicated and in
all cases who are capable of being categorised as a professional
client or an eligible counterparty for the purposes of the FCA
Conduct of Business Rules (all such persons being together referred
to as "Relevant Persons"). This appendix and these terms and
conditions must not be acted on or relied on by persons who are not
Relevant Persons. Any investment or investment activity to which
these terms and conditions relates is available only to Relevant
Persons and will be engaged in only with Relevant Persons.
Furthermore, the New Ordinary Shares may not be offered or sold
in the United States, except to persons reasonably believed to be
(a) QIBs who are also QPs and (b) Accredited Investors who are also
QPs and, in each such case, in reliance on Section 4(a)(2) of, and
Rule 506(b) under, the US Securities Act or pursuant to another
exemption from, or in a transaction not subject to, the
registration requirements of the US Securities Act.
2. INTRODUCTION
Participation in the Firm Placing and/or the Placing is only
available to persons who are invited to participate by Peel Hunt
and/or Cenkos. This appendix and the terms and conditions set out
herein apply to persons making an offer to subscribe for Firm
Placing Shares under the Firm Placing and/or Placing Shares under
the Placing. Each of the Firm Placees and the Placing Placees
(together, for the purposes of this appendix, the "Placees" and
each a "Placee") agrees with Peel Hunt, Cenkos and the Company to
be bound by these terms and conditions as being the terms and
conditions upon which Firm Placing Shares will be sold under the
Firm Placing and Placing Shares will be sold under the Placing (as
applicable). A Placee shall, without limitation, become so bound if
Peel Hunt or Cenkos (as the case may be) confirms its allocation of
Firm Placing Shares under the Firm Placing and/or Placing Shares
under the Placing (as applicable) to such Placee at the Issue
Price.
Upon being notified of its allocation of Firm Placing Shares
under the Firm Placing and/or Placing Shares under the Placing
(whether orally or in writing, which includes e-mail) by Peel Hunt
or Cenkos (as the case may be), a Placee shall, subject to the
provisions of paragraph 7 of this appendix with respect to the
Placing Shares, be contractually committed to acquire the number of
Firm Placing Shares and/or Placing Shares allocated to them at the
Issue Price and to the fullest extent permitted by law, will be
deemed to have agreed not to exercise any rights to rescind or
terminate or otherwise withdraw from such commitment (the "Placing
Commitment"). Each of Peel Hunt and Cenkos may require any Placee
to agree to such further terms and/or conditions and/or give such
additional warranties and/or representations as it may, in its
absolute discretion, see fit and/or may require such Placee to
execute a separate placing letter. Dealing may not begin before any
notification is made.
None of the New Ordinary Shares have been or will be registered
under the US Securities Act, or under any securities laws of any
state or other jurisdiction of the United States and, subject to
the limited exceptions described herein, may not be offered, sold,
taken up, exercised, resold, renounced, transferred or delivered,
directly or indirectly, within the United States.
This announcement (including this appendix) will not constitute
an offer or an invitation to apply for or an offer or an invitation
to acquire any New Ordinary Shares in the United States. Subject to
certain exceptions, all persons applying for New Ordinary Shares
and wishing to hold such New Ordinary Shares in registered form
must provide an address for registration of the New Ordinary Shares
outside the United States.
Subject to certain exceptions, any person who applies for New
Ordinary Shares will be deemed to have declared, warranted and
agreed that they are not, and that at the time of application they
will not be, in the United States, or acting on a non-discretionary
basis for a person located within the United States.
Subject to certain limited exceptions described herein, the
Company reserves the right to treat as invalid any application for
New Ordinary Shares which does not contain a warranty to the effect
that the person applying for New Ordinary Shares does not have a
registered address and is not otherwise located in the United
States and is not applying for New Ordinary Shares with a view to
the offer, sale, resale, transfer, delivery or distribution,
directly or indirectly, of the New Ordinary Shares in the United
States or where the Company believes application for such New
Ordinary Shares may infringe applicable legal or regulatory
requirements.
3. AGREEMENT TO ACQUIRE FIRM PLACING SHARES AND/OR PLACING SHARES
a) Each of the Firm Placing and the Placing is conditional upon
the following conditions, amongst others:
b) the Capital Raising Resolution being passed at the Extraordinary General Meeting;
c) the Placing and Open Offer Agreement having become
unconditional in all respects (save for the condition relating to
Admission) and not having been terminated in accordance with its
terms before Admission;
d) minimum Gross Capital Raising Proceeds of GBP65 million (the
"Minimum Proceeds") being raised pursuant to the Capital Raising;
and Admission becoming effective by not later than 8.00 a.m.
(London time) on 21 December 2017 (or such later time and/or date
as the Company, Peel Hunt and Cenkos may agree (being no later than
31 December 2017)).
Subject to the above conditions, a Placee agrees to become a
shareholder in the Company and agrees to acquire Firm Placing
Shares and/or Placing Shares (as applicable) at the Issue Price.
The number of Firm Placing Shares issued to a Firm Placee under the
Firm Placing and/or Placing Shares issued to a Placing Placee under
the Placing (as applicable) shall be in accordance with the
arrangements described above, subject to the provisions of
paragraph 7 of this appendix with respect to the Placing
Shares.
The Company has undertaken that the Firm Placing Shares and the
Placing Shares will, when issued and fully paid, rank pari passu in
all respects with the Existing Ordinary Shares and will have the
same rights and restrictions as each Existing Ordinary Share,
including in respect of any dividends or distributions declared in
respect of the New Ordinary Shares following Admission.
4. PAYMENT FOR FIRM PLACING SHARES AND/OR PLACING SHARES
Each Placee undertakes to pay the Issue Price for the Firm
Placing Shares and/or Placing Shares (as applicable) issued to such
Placee (the "Total Amount") in such manner as shall be directed by
Peel Hunt or Cenkos (as the case may be). In the event of any
failure by a Placee to pay as so directed by Peel Hunt or Cenkos
(as the case may be), the relevant Placee shall be deemed hereby to
have appointed Peel Hunt, and/or Cenkos or any of its or their
nominees to sell (in one or more transactions) any or all of the
Firm Placing Shares and/or Placing Shares (as applicable) in
respect of which payment shall not have been made as so directed
and to have agreed to indemnify on demand Peel Hunt or Cenkos (as
the case may be) in respect of any liability for UK stamp duty
and/or stamp duty reserve tax arising in respect of any such sale
or sales. A sale of all or any of such Firm Placing Shares and/or
Placing Shares shall not release the relevant Placee from the
obligation to make such payment for Firm Placing Shares and/or
Placing Shares to the extent that Peel Hunt, Cenkos or its or their
nominee has failed to sell such Firm Placing Shares and/or Placing
Shares at a consideration which after deduction of expenses of such
sale and payment of stamp duty and/or stamp duty reserve tax as
aforementioned, is equal to or exceeds the Issue Price per Firm
Placing Share and/or Placing Share.
5. REPRESENTATIONS AND WARRANTIES
By receiving this announcement, each Placee and/or any person
confirming his agreement to subscribe for Firm Placing Shares
and/or Placing Shares on behalf of a Placee or authorising Peel
Hunt and/or Cenkos to notify a Placee's name to the Receiving
Agent, is deemed to acknowledge, agree, undertake, represent and
warrant to each of Peel Hunt, Cenkos, the Receiving Agent and the
Company that:
(A) it has read and understood this announcement (including this
appendix) in its entirety and that its acquisition of the New
Ordinary Shares is made solely on the terms and subject to the
conditions, representations, warranties, acknowledgements,
agreements and undertakings contained herein;
(B) it has made its own assessment of the New Ordinary Shares
and has relied on its own investigation of the business, financial
or other position of the Company in accepting a participation in
the Firm Placing and/or the Placing;
(C) neither Peel Hunt, Cenkos, nor any of its or their
affiliates or any person acting on behalf of any of them has
provided, or will provide the Placee, with any material or
information regarding the New Ordinary Shares, the Firm Placing or
the Placing other than this announcement; nor has the Placee
requested Peel Hunt, Cenkos, the Company or any of its or their
respective affiliates or any person acting on behalf of any of them
to provide it with any such information;
(D) the content of this announcement is exclusively the
responsibility of the Company and that none of Peel Hunt, Cenkos,
their respective affiliates or any person acting on their behalf
has or shall have any responsibility or liability for any
information, representation or statement contained in this
announcement or any information previously or subsequently
published by or on behalf of the Company;
(E) it has made its own assessment of the Company and the terms
of the Firm Placing and Placing based on this announcement
(including this appendix) and the Company's publicly available
information, such information being all that it deems necessary to
make an investment decision in respect of the New Ordinary Shares
and that it has neither received nor relied on any information
given or representations, warranties or statements made by Peel
Hunt, Cenkos or the Company or any of their affiliates or any
person acting on behalf of any of them and neither Peel Hunt,
Cenkos, nor the Company nor any of its or their affiliates nor any
person acting on behalf of any of them will be liable for any
Placee's decision to accept an invitation to participate in the
Firm Placing and/or Placing based on any information,
representation, warranty or statement other than that contained in
this announcement;
(F) it will not hold Peel Hunt, Cenkos or any of their
respective affiliates or any person acting on their behalf
responsible or liable for any misstatements in or omission from any
publicly available information relating to the Company and that
none of Peel Hunt and Cenkos nor any person acting on their behalf
makes any representation or warranty, express or implied, as to the
truth, accuracy or completeness of such information or accepts any
responsibility for any such information;
(G) it acknowledges that the New Ordinary Shares will be
admitted to the Official List of the FCA and the Company is
therefore required to publish certain business and financial
information in accordance with the rules and practices of the FCA
and the Placee is able to obtain or access such information without
undue difficulty and is able to obtain access to such information
or comparable information concerning any other publicly traded
company without undue difficulty;
(H) it has the funds available to pay the Total Amount payable
pursuant to its Placing Commitment and acknowledges, agrees and
undertakes that it will pay the Total Amount in accordance with the
terms of this appendix on the due time and dates notified by Peel
Hunt and/or Cenkos (as the case may be), failing which the relevant
New Ordinary Shares may be placed with other placees or sold at
such price as Peel Hunt and/or Cenkos determines;
(I) it:
(i) is duly incorporated and validly existing under the laws of
its jurisdiction of incorporation;
(ii) is entitled to subscribe for the New Ordinary Shares under
the laws of all relevant jurisdictions which apply to it;
(iii) has fully observed such laws;
(iv) has the requisite capacity and authority and is entitled to
enter into and to perform its obligations as a subscriber for New
Ordinary Shares and to execute and deliver all documents necessary
for such subscription and will honour such obligations; and
(v) has obtained all necessary consents and authorities
(including, without limitation, in the case of any person on whose
behalf it is acting, all necessary consents and authorities to
agree to the terms set out or referred to in this appendix) to
enable it to enter into the transactions contemplated hereby and to
perform its obligations in relation thereto and, in particular, if
it is a pension fund or investment company it is aware of and
acknowledge it is required to comply with all applicable laws and
regulations with respect to its subscription for the New Ordinary
Shares;
(J) after giving effect to its subscription of the New Ordinary
Shares comprised in its Placing Commitment, it will inform Peel
Hunt and/or Cenkos (as the case may be) if such acquisition will
cause it to be required to make a notification to the Company in
accordance with Rule 5.1.2R of the Disclosure Guidance and
Transparency Rules;
(K) after giving effect to its subscription of the New Ordinary
Shares comprised in its Placing Commitment, its total aggregate
holding of issued Ordinary Shares, together with any such Ordinary
Shares held by any person acting in concert with its (as that term
is used for the purposes of the City Code), will not exceed 29.9
per cent. of the voting rights of the Company;
(L) it is not, and any person who it is acting on behalf of is
not, and at the time the New Ordinary Shares are subscribed will
not be, a resident of, or with an address in, Australia, New
Zealand, The Republic of South Africa, Canada or Japan, and it
acknowledges and agrees that the New Ordinary Shares have not been
and will not be registered or otherwise qualified under the
securities legislation of Australia, New Zealand, The Republic of
South Africa, Canada or Japan and, subject to certain exceptions,
may not be offered, sold, or acquired, directly or indirectly,
within those jurisdictions;
(M) it is outside the United States and, subject to certain
exceptions, the New Ordinary Shares have not been and are not being
offered or sold to any Placee except outside the United States in
an "offshore transaction" (within the meaning of Regulation S under
the US Securities Act) and it will not offer, sell or deliver,
directly or indirectly, any New Ordinary Shares in or into the
United States. It acknowledges and agrees that there is no present
intention to register any of the New Ordinary Shares for sale or
re-sale under the US Securities Act and that there can be no
representation as to the availability of any exemption under the US
Securities Act;
(N) it is not acting on a non-discretionary basis for the
account or benefit of a person located within the United States at
the time the undertaking to subscribe for New Ordinary Shares is
given and it is not acquiring the New Ordinary Shares with a view
to the offer, sale, resale, transfer, delivery or distribution,
directly or indirectly, of any New Ordinary Shares into the United
States;
(O) it is:
(i) a person described in Article 19(5) (Investment
Professionals) and/or 49(2) (high net worth companies etc.) of the
Financial Services and Markets Act 2000 (Financial Promotion) Order
2005, as amended (the "FPO"), and/or an authorised person as
defined in section 31 of the FSMA; or
(ii) a high net worth entity as described in article 49(2) of the FPO; or
(iii) a "qualified investor" falling within Articles 2.1(e)(i),
(ii) or (iii) of the Prospectus Directive; or
(iv) a person to whom this Announcement may otherwise lawfully
be communicated and in all cases who is capable of being
categorised as a professional client or an eligible counterparty
for the purposes of the FCA Conduct of Business Rules.
For such purposes, it undertakes that it will acquire, hold,
manage and (if applicable) dispose of any New Ordinary Shares that
are allocated to it for the purposes of its business only;
(P) it has such knowledge, sophistication and experience in
financial and business matters that it is capable of evaluating the
merits and risks of its purchase of the New Ordinary Shares
comprised in its Placing Commitment, and it is able to bear the
economic risk and financial risk (including sustaining a complete
loss) of the purchase of such New Ordinary Shares and it has had
sufficient time to consider and conduct its own investigation with
respect to its purchase of the New Ordinary Shares including the
legal, regulatory, tax, business, currency and other economic and
financial considerations relevant to such investment and it will
not look to the Company, Peel Hunt, Cenkos or any of their
respective affiliates or any person acting on their behalf for all
or part of any loss it may suffer in connection with its purchase
of such New Ordinary Shares;
(Q) it has only communicated or caused to be communicated and
will only communicate or cause to be communicated any invitation or
inducement to engage in investment activity (within the meaning of
section 21 of the FSMA) relating to the New Ordinary Shares in
circumstances in which section 21(1) of the FSMA does not require
approval of the communication by an authorised person and it
acknowledges and agrees that this announcement is not being issued
by either Peel Hunt or Cenkos in its capacity as an authorised
person under section 21 of the FSMA and it may not therefore be
subject to the controls which would apply if it were made or
approved as a financial promotion by an authorised person;
(R) it is aware of and will comply with all applicable
provisions of the FSMA with respect to anything done by it in
relation to the New Ordinary Shares in, from or otherwise
involving, the United Kingdom;
(S) it will not make any offer to the public of the New Ordinary
Shares and has not offered or sold and will not offer or sell any
New Ordinary Shares to persons in the United Kingdom or elsewhere
in the European Economic Area prior to Admission except to persons
whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for
the purposes of their business or otherwise in circumstances which
have not resulted in and which will not result in an offer to the
public in the United Kingdom within the meaning of section 85(1) of
the FSMA or an offer to the public in any EEA State within the
meaning of the Prospectus Directive (which includes any relevant
implementing measure in any EEA State);
(T) it has not been engaged to subscribe for the New Ordinary
Shares on behalf of any other person who is not a Qualified
Investor unless the terms on which it is engaged to enable it to
make decisions concerning the acceptance of offers of transferable
securities on the client's behalf without reference to the client
as described in section 86(2) of the FSMA;
(U) it is aware of and acknowledges that it is required to
comply with its obligations in connection with money laundering
under the Proceeds of Crime Act 2002, the Terrorism Act 2000, the
Terrorism Act 2006 and the Money Laundering Regulations and, if
making payment on behalf of a third party, that satisfactory
evidence has been obtained and recorded by it to verify the
identity of the third party as required by such laws and
regulations;
(V) it is aware of and has complied with its obligations under
the Criminal Justice Act 1993, the Market Abuse Regulation and
confirms that it will continue to comply with those
obligations;
(W) the allocation, allotment, issue and delivery to the Placee,
or the person specified by it for registration as a holder of New
Ordinary Shares, will not give rise to a stamp duty or stamp duty
reserve tax liability under any of sections 67, 70, 93 or 96 of the
Finance Act 1986 (depositary receipts and clearance services) and
that no instrument under which it subscribes for New Ordinary
Shares (whether as principal, agent or nominee) would be subject to
stamp duty or the increased rates referred to in those sections and
that it, or the person specified by it for registration as a holder
of New Ordinary Shares, is not participating in the Firm Placing
and/or the Placing as nominee or agent for any person or persons to
whom the allocation, allotment, issue or delivery of New Ordinary
Shares would give rise to such a liability;
(X) it, or the person specified by it for registration as a
holder of the New Ordinary Shares, will be liable for any stamp
duty and all other stamp, issue, securities, transfer,
registration, documentary or other duties or taxes (including any
interest, fines or penalties relating thereto), if any, payable on
acquisition of any of the New Ordinary Shares or the agreement to
subscribe for the New Ordinary Shares and acknowledges and agrees
that neither Peel Hunt, Cenkos nor the Company nor any of its or
their respective affiliates nor any person acting on behalf of any
of them will be responsible for any liability to stamp duty or
stamp duty reserve tax resulting from a failure to observe this
requirement;
(Y) neither Peel Hunt, Cenkos nor any of its or their affiliates
nor any person acting on behalf of any of them, is making any
recommendations to it, advising it regarding the suitability of any
transactions it may enter into in connection with the Firm Placing
and/or the Placing and that its participation in the Firm Placing
and/or the Placing is on the basis that it is not and will not be a
client of Peel Hunt and/or Cenkos (as the case me be) and that
neither Peel Hunt nor Cenkos has any duties or responsibilities to
it for providing the protections afforded to their clients or
customers under the rules of the FCA or for providing advice in
relation to the Firm Placing and/or the Placing nor in respect of
any representations, warranties, undertakings or indemnities
contained in the Placing and Open Offer Agreement nor for the
exercise or performance of any of their respective rights and
obligations thereunder, including any rights to waive or vary any
conditions or exercise any termination right. In addition, any
payment by them will not be treated as client money governed by the
rules of the FCA;
(Z) in order to ensure compliance with the Money Laundering
Regulations, Peel Hunt and Cenkos (for themselves and as agents on
behalf of the Company) or the Company's registrars may, in its or
their absolute discretion, require verification of any Placee's
identity. Pending the provision to Peel Hunt, Cenkos or the
Receiving Agent, as applicable, of evidence of identity, definitive
certificates in respect of the New Ordinary Shares may be retained
at its or their absolute discretion or, where appropriate, delivery
of the New Ordinary Shares to it in uncertificated form, may be
retained at Peel Hunt's, Cenkos's or the Receiving Agent's, as the
case may be, absolute discretion. If within a reasonable time after
a request for verification of identity Peel Hunt, Cenkos (for
themselves and as agents on behalf of the Company) or the Receiving
Agent have not received evidence satisfactory to them, Peel Hunt,
Cenkos and/or the Company may, at the absolute discretion of each,
terminate its commitment in respect of the Firm Placing and/or the
Placing, in which event the monies payable on acceptance of
allotment will, if already paid, be returned without interest to
the account of the drawee's bank from which they were originally
debited;
(AA) save in the event of fraud (and to the extent permitted by
the rules of the FCA), none of Peel Hunt and Cenkos nor any of
their respective affiliates shall be liable to a Placee for any
matter arising out of the role of Peel Hunt and Cenkos as the
Company's brokers under the Firm Placing and/or Placing and each
Placee waives any claim against Peel Hunt and/or Cenkos or any of
their respective affiliates with it may have in respect
thereof;
(BB) the Placee irrevocably appoints any duly authorised officer
of Peel Hunt, Cenkos and/or as its agent for the purpose of
executing and delivering to the Company and/or the Receiving Agent
any documents on its behalf necessary to enable it to be registered
as the holder of any of the Firm Placing Shares and/or Placing
Shares (as applicable) for which it agrees to subscribe or purchase
upon the terms of this appendix;
(CC) it agrees to indemnify and hold the Company, Peel Hunt and
Cenkos and their respective affiliates harmless from any and all
costs, claims, liabilities and expenses (including legal fees and
expenses) arising out of any breach of the representations,
warranties, undertakings, agreements and acknowledgements set out
in this appendix.
Notwithstanding anything to the contrary set forth immediately
above, the New Ordinary Shares made available under the Firm
Placing and Placing may be offered and sold in the United States
only to persons reasonably believed to be (a) QIBs who are also QPs
and (b) Accredited Investors who are also QPs and, in each such
case, in reliance on Section 4(a)(2) of, and Rule 506(b) under, the
US Securities Act or pursuant to another exemption from, or in a
transaction not subject to, the registration requirements of the US
Securities Act. In addition to the applicable acknowledgements,
agreements, undertakings, representations and warranties set forth
above, each Placee in the United States will be deemed to have made
the following additional acknowledgements, agreements,
undertakings, representations and warranties to each of Peel Hunt,
Cenkos, the Receiving Agent and the Company:
(A) None of the New Ordinary Shares or the Open Offer
Entitlements have been, or will be, registered under the US
Securities Act or under the securities laws of any state or other
jurisdiction of the United States and may not be offered or sold,
directly or indirectly, within the United States or to, or for the
account or benefit of, US Persons except in reliance on an
exemption from the registration requirements of the US Securities
Act and in compliance with any applicable securities laws of any
state or other jurisdiction of the United States and under
circumstances that will not require the Company to register under
the US Investment Company Act. There will be no public offer of the
New Ordinary Shares or the Open Offer Entitlements in the United
States. The Company has not been, and will not be, registered under
the US Investment Company Act and investors will not be entitled to
the benefits of that Act. The New Ordinary Shares made available
under the Firm Placing and Placing are being offered and sold in
the United States only to persons reasonably believed to be (a)
QIBs who are also QPs and (b) Accredited Investors who are also QPs
and, in each such case, in reliance on Section 4(a)(2) of, and Rule
506(b) under, the US Securities Act or pursuant to another
exemption from, or in a transaction not subject to, the
registration requirements of the US Securities Act. Accordingly,
the Company is not extending the Open Offer into the United States
or to, or for the account or benefit of, US Persons unless an
exemption from the registration requirements of the US Securities
Act is available and, subject to certain exceptions set out below.
The Company reserves the right to treat as invalid any Open Offer
subscription that appears to the Company or its agents to have been
executed in, or despatched from, the United States, or that
provides an address in the United States for the receipt of New
Ordinary Shares, or where the Company believes acceptance of such
subscription may infringe applicable legal or regulatory
requirements. Notwithstanding the foregoing, New Ordinary Shares
may be made available under the Open Offer to a limited number of
qualifying shareholders in the United States or who are US Persons
who are both (i) QIBs and QPs or (ii) Accredited Investors and QPs,
in the sole discretion of or as otherwise agreed by the Company, in
consultation with Peel Hunt and Cenkos, and in a manner designed
not to require registration of the New Ordinary Shares under the US
Securities Act or registration of the Company under the US
Investment Company Act. Any person in the United States or any US
Person into whose possession this document comes should inform
himself or herself about and observe any applicable legal
restrictions; any such person in the United States or US Person who
is not a QIB and a QP o an Accredited Investor and a QP is required
to disregard this announcement. No representation has been, or will
be, made by the Company or any of Peel Hunt and Cenkos as to the
availability of Rule 144 under the US Securities Act or any other
exemption under the US Securities Act or any state securities laws
for the reoffer, pledge or transfer of the New Ordinary Shares.
The Placee acknowledges and understands that the Company, Peel
Hunt and Cenkos will rely upon the truth and accuracy of the
foregoing representations, warranties, agreements, acknowledgements
and undertakings.
The Placee indemnifies on an after-tax basis and holds harmless
each of Peel Hunt and Cenkos and each person affiliated with Peel
Hunt and/or Cenkos and any person acting on its or their behalf
from any and all costs, claims, liabilities and expenses (including
legal fees and expenses) arising out of or in connection with any
breach of the representations, warranties, acknowledgements,
agreements and undertakings set out in this appendix and further
agrees that the provisions of this appendix shall survive after
completion of the Firm Placing and the Placing.
6. CLAWBACK OF THE PLACING SHARES
The commitments of a Placee to subscribe for the number of
Placing Shares allotted to them is subject to the right of the
Company (in consultation with Peel Hunt and Cenkos) to clawback any
or all of such Placing Shares in order to satisfy valid
applications by Qualifying Shareholders under the Open Offer and,
at the discretion of the Company (in consultation with Peel Hunt
and Cenkos) under the Excess Application Facility. The number of
Placing Shares to be clawed back from Placing Placees will be
calculated pro rata to each Placee's commitment to subscribe for
Placing Shares.
7. MISCELLANEOUS
The rights and remedies of Peel Hunt, Cenkos, the Receiving
Agent and the Company under this appendix and the terms and
conditions contained herein are in addition to any rights and
remedies which would otherwise be available to each of them and the
exercise or partial exercise of one will not prevent the exercise
of others.
On application, each Placee may be asked to disclose, in writing
or orally to Peel Hunt and/or Cenkos (as the case may be):
(A) if he is an individual, his nationality; or
(B) if he is a discretionary fund manager, the jurisdiction in
which the funds are managed or owned.
All documents will be sent at the Placee's risk. They may be
sent by post to such Placee at an address notified to Peel Hunt
and/or Cenkos (as the case may be).
The provisions of these terms and conditions of the Firm Placing
and/or the Placing may be waived, varied or modified as regards
specific Placees or on a general basis by Peel Hunt and/or Cenkos
(as the case may be) without reference to any Placee and with no
liability to any Placee whatsoever.
The contract to subscribe for New Ordinary Shares and the
appointments and authorities mentioned herein will be governed by,
and construed in accordance with, the laws of England and Wales.
For the exclusive benefit of Peel Hunt, Cenkos, the Company and the
Receiving Agent, each Placee irrevocably submits to the exclusive
jurisdiction of the English courts in respect of these matters.
This does not prevent an action being taken against a Placee in any
other jurisdiction.
In the case of a joint agreement to subscribe for New Ordinary
Shares, references to a "Placee" in these terms and conditions are
to each of such Placees and such joint Placees' liability is joint
and several.
In addition to the provisions of paragraph 7 of this appendix,
Peel Hunt, Cenkos and the Company each expressly reserve the right
to modify the Firm Placing and/or the Placing (including, without
limitation, its timetable and settlement) at any time before
allocations of Firm Placing Shares under the Firm Placing and/or of
Placing Shares under the Placing are determined.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCUSVNRBKAURAA
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