To view the PDF file, sign up for a MySharenet subscription.

REI - Reinet Investments S.C.A. Depositary Receipts - Management statement for

Release Date: 19/07/2011 07:30
Code(s): REI
Wrap Text

REI - Reinet Investments S.C.A. Depositary Receipts - Management statement for the first quarter ended 30 June 2011 Reinet Investments S.C.A. Depositary Receipts issued by Reinet Securities SA (Incorporated in Switzerland) ISIN: CH0045793657 Depositary Receipt Code: REI PRESS RELEASE FOR IMMEDIATE RELEASE 19 JULY 2011 The Board of Reinet Investments Manager S.A. announces the results of Reinet Investments S.C.A. for the first quarter ended 30 June 2011. Key financial data Net asset value at 30 June 2011: EUR 2 995 million, an increase of 8 per cent from 31 March 2011 Net asset value per ordinary share at 30 June 2011: EUR 15.28 (31 March 2011: EUR 14.21) Consolidated Net Asset Value Unaudited Audited (`NAV`) 30 June 2011 31 March 2011 EUR m % EUR m %
Listed investments 2 547 85.0 2 387 85.7 - British American Tobacco p.l.c. - Other 5 0.2 7 0.2 2 552 85.2 2 394 85.9 Cash and liquid funds 153 5.1 236 8.5 Unlisted investments - Trilantic Capital Partners 81 2.7 72 2.6 funds - US land development and 57 1.9 53 1.9 mortgages - Vanterra Flex Investments 14 0.5 13 0.5 fund - Vanterra C Change TEM fund 20 0.6 10 0.4 - Jagersfontein 57 1.9 49 1.8 - 36 South Investment fund 83 2.8 88 3.2 - Other 65 2.2 42 1.5 377 12.6 327 11.9 Funding by minority partners (24) (0.8) (21) (0.8) Borrowings (46) (1.5) (46) (1.7) Fees payable and other (13) (0.5) (102) (3.7) liabilities, net of other assets 2 999 100.1 2 788 100.1 Minority interest (4) (0.1) (4) (0.1) 2 995 100.0 2 784 100.0 All of the underlying assets are held by Reinet Fund S.C.A., F.I.S. (`Reinet Fund`). Listed investment in British American Tobacco p.l.c. (`BAT`) Reinet remains one of the largest shareholders in BAT, holding some 84 million shares representing 4.2 per cent of BAT`s capital. At 30 June 2011, the value of the investment in BAT in the balance sheet of Reinet was EUR 2 547 million, being 85 per cent of Reinet`s net asset value. Reinet Fund`s NAV has been positively impacted by the increase in value in euro terms of the BAT shares of EUR 160 million during the quarter. BAT shares are listed principally on the London Stock Exchange and are denominated in pounds sterling. Reinet received a dividend from BAT during the quarter amounting to EUR 77 million. Cash and liquid funds Reinet Fund`s cash is held on deposit with banks in Luxembourg. In addition, Reinet Fund has invested EUR 86 million in a euro-denominated government bond fund. This holds exclusively short-dated bonds issued by western European governments and short-term loans backed by government bonds. Unlisted investments: Trilantic Capital Partners Reinet has invested both in the Trilantic management companies and as a partner in the underlying funds. As at 30 June 2011, Reinet and its 20 per cent minority partners in Trilantic had invested the equivalent of EUR 7.6 million in the initial Trilantic management company investment, EUR 2.1 million to acquire an interest in Trilantic Fund IV Europe and a further EUR 59 million, net of capital repayments, in the funds under Trilantic management. The investment in Trilantic is carried at the estimated fair value of EUR 81 million at 30 June 2011, based on recent valuations prepared by Trilantic. Of the 30 June 2011 valuation of EUR 81 million, some EUR 16 million is attributable to Reinet`s minority co-investors in Trilantic, being shown as EUR 4 million in respect of minority interest and EUR 12 million as liabilities in respect of funding provided by the minority partners. At 30 June 2011 Reinet Fund had remaining commitments of EUR 91 million to invest in these funds, after taking into account the amounts payable by the minority partners. United States land development and mortgages Recognising the depressed state of the property market in the United States, Reinet has co-invested with partners in acquiring real estate development projects - usually properties where infrastructure services have been laid but where construction of properties has not yet commenced - and mortgage debt on such developments and undeveloped sites. The investments are principally in Florida and the North and South Carolinas with one investment in Colorado. The mortgage debts were acquired from local lenders at substantial discounts to nominal value, reflecting the economic situation and the risk that the development companies may not be able to meet their obligations. Reinet is working closely with its partners and co-investors in the United States, who have considerable experience in managing such projects, recognising that this is an area where industry knowledge is critical to making the right investment decisions. At 30 June 2011, Reinet had invested a total of USD 70 million (EUR 48 million) in these projects. At that date, these were valued at EUR 57 million of which EUR 46 million is attributable to Reinet and EUR 11 million to its partners. Reinet is committed to invest a further USD 30 million (EUR 21 million) to acquire further mortgage debt and to fund development projects. Vanterra Flex Investments L.P. Reinet is an investor in Vanterra and in its general partner. Vanterra was established in March 2010 to invest in listed and unlisted funds and to make direct investments in the United States and emerging markets. Vanterra has invested alongside Reinet in Trilantic and in the United States land development and mortgages. It is also an investor in Vanterra C Change Transformative Energy & Materials I, L.P. Vanterra will seek to construct a globally diversified private equity portfolio providing investors with long-term capital appreciation. As at 30 June 2011, USD 21 million (EUR 14 million) of committed funds plus an additional USD 1 million (EUR 1 million) in respect of expenses had been invested in the fund. Reinet is committed to invest a further USD 79 million (EUR 55 million) in Vanterra. Vanterra C Change Transformative Energy & Materials I, L.P. (`TEM`) Reinet is an investor in TEM and in its general partner. In July 2010, Reinet entered into an agreement to invest in TEM. TEM is a newly created fund, established to invest in companies and projects providing products or services that supply cleaner energy; create a more cost effective building environment through the use of energy efficient technologies; and develop renewable resources as a substitute for fossil and other traditional fuels. As at 30 June 2011, capital contributions of USD 31 million (EUR 21 million) had been made to the fund. Reinet is committed to invest a further USD 34 million (EUR 23 million) in TEM. Jagersfontein Reinet is a co-investor along with specialist operators and the local community in a project which will seek to process and extract diamonds from the waste tailings from mining operations carried out over a century ago. The tailings are located at Jagersfontein in South Africa. Significant developments in terms of gemstone extraction since the mines were first excavated mean that there is now the potential to recover stones which were previously treated as waste. As at 30 June 2011, Reinet had provided loans of some ZAR 528 million to finance the acquisition of the tailings and plant to process the tailings. Once the final investment holding structure has been determined, it is anticipated that Reinet will have an equity interest of 44 per cent in the venture. This rand exposure has been hedged by local currency borrowings. Extraction operations are expected to begin in the third quarter of 2011. 36 South global macro/volatility funds Reinet has co-invested with the 36 South management team in the fund management and distribution companies. It is also an investor in the funds under management. These funds are established through an Irish-registered investment fund - 36 South Funds PLC. 36 South is an absolute return fund manager which specialises in managing global macro/volatility funds. The fund management philosophy is to invest when market estimates of volatility are mis-priced. The volatility may apply to a wide range of underlying asset classes ranging from currencies and interest rates to equities. In March 2011, Reinet invested its full commitment of EUR 88 million in 36 South. Of this, EUR 15 million represented the initial investment in and loans to the jointly-held fund management activities; the balance of EUR 73 million being Reinet`s investment in the funds under management. The investment in 36 South Funds PLC is carried at its fair value of EUR 68 million at 30 June 2011. Other unlisted investments This portfolio includes small businesses with growth potential as well as investments in specialised investment funds focused on developing markets and niche sectors. The portfolio is valued at its fair value taking into account the detailed evaluation performed at 31 March 2011 and movements in the quarter to 30 June 2011. Fees payable and other liabilities, net of other assets Fees payable and other liabilities comprise principally a provision of EUR 4 million in respect of the proportionate potential performance fee payable after 31 March 2012, together with the management fee payable of EUR 5 million, tax provision of EUR 3 million and other operating expenses currently payable. The management fee for the period under review amounted to EUR 6 million, of which EUR 5 million remained payable at 30 June 2011. Shares in issue The number of shares in issue remained unchanged during the quarter at 195 942 286. This figure includes 1 000 management shares held by the General Partner. Reinet Investments Manager S.A. for and on behalf of Reinet Investments S.C.A. 19 July 2011 Website: www.reinet.com The information contained in this statement has not been audited Reinet Investments S.C.A. (the `Company`) is a partnership limited by shares incorporated in the Grand Duchy of Luxembourg and having its registered office at 35, boulevard Prince Henri, L-1724 Luxembourg. It is governed by the Luxembourg law on securitisation and in this capacity allows its shareholders to participate indirectly in the portfolio of assets held by its wholly-owned subsidiary Reinet Fund S.C.A., F.I.S. (the `Fund`), a specialised investment fund also incorporated in Luxembourg. Reinet shares are listed on the Luxembourg Stock Exchange and Reinet South African Depository Receipts are listed in Johannesburg. Reinet shares are included in the `LuxX` index of the principal shares traded on the Luxembourg exchange and the South African Depository Receipts are included in the JSE `Top 40` Share Index. 19 July 2011 Sponsor RAND MERCHANT BANK (a division of FirstRand Bank Limited) Date: 19/07/2011 07:30:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

Share This Story