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REI - Reinet Investments S.C.A. Depositary Receipts - Reinet proposes revision
to the terms of its prospectus
Reinet Investments S.C.A. Depositary Receipts
issued by Reinet Securities SA
(Incorporated in Switzerland)
ISIN: CH0045793657
Depositary Receipt Code: REI
REINET PROPOSES REVISION TO THE TERMS OF ITS PROSPECTUS
The Board of Reinet Investment Manager SA, acting on behalf of Reinet
Investments S.C.A. (`the Company`) proposes to convene an extraordinary meeting
of shareholders to consider an amendment to the prospectus issued at the time of
its formation in 2008.
The amendment would vary the risk diversification policy of the Company and its
wholly-owned subsidiary, Reinet Fund S.C.A. F.I.S. (`Reinet Fund`), to permit
equity participations in any one investment to exceed the 30 per cent guideline
until such time Reinet Fund may gradually diversify its portfolio, taking into
account prevailing market conditions.
Specifically, Reinet Fund holds some 84 million shares in British American
Tobacco p.l.c. (`BAT`), representing 4.3 per cent of that company`s capital. At
31 December 2011, the BAT interest represented 86.6 per cent of the Company`s
net asset value.
The significant stake in BAT has been held by Reinet Fund since 2008, having
been contributed in the first instance by Compagnie Financiere Richemont SA and
Remgro Limited and subsequently increased through a rights issue, which involved
the exchange of shares in BAT for shares in the Company.
The listing prospectus indicated that it was intended to reduce the significant
shareholding in BAT to less than 30 per cent of the total assets of Reinet over
a four year time period, which will expire in October 2012. This was in line
with guidance provided by the Luxembourg regulator in terms of risk
diversification.
Commenting on the rationale for the proposed amendment, Johann Rupert, Chairman
of the Company, said:
Quote
The last three years have seen unprecedented turmoil in global financial
markets. The credit crunch was followed by the banking crisis in the United
States and Europe and we now face the government debt problem in the Eurozone,
which may yet have serious consequences for the euro. Economies are shrinking as
governments struggle to bring their borrowings under control.
To date, Reinet has made several interesting investments, using the cash
resources that it had at the time of its formation and the significant dividend
income from BAT. However, Reinet Fund has not yet needed to dispose of any BAT
shares to finance these investments. As such, BAT remains by far the largest
investment in the portfolio. We have taken a conscious decision not to reduce
it; in these difficult times, we believe that it would be wrong to dispose of
what has been, by any standards, an excellent investment.
In the period since 2008, the BAT shares have appreciated by around 70 per cent
in sterling terms and provided Reinet with an aggregate return of over 21 per
cent per annum in euro terms. BAT has a strong cash flow from its global
business and has provided Reinet with dividends of over GBP 264 million over the
past three years.
In seeking shareholder approval for the amendment to the prospectus, Reinet will
have more flexibility to determine when it may wish to dispose of all or part of
its interest in BAT, rather than facing an arbitrary deadline. We will await
more stable market conditions before contemplating any disposal but in the
meantime may use Reinet`s substantial holding of BAT shares as security for a
prudent level of borrowing to finance other investment opportunities.
Unquote
It is anticipated that the shareholders` meeting to approve the revision to the
prospectus will be convened in March 2012. Formal notice of the meeting will be
distributed to shareholders in due course and holders of South African
depository receipts will be asked to provide voting instructions to the
Depository in the usual manner.
25 January 2012
Reinet Investments Manager S.A.
for and on behalf of Reinet Investments S.C.A.
Reinet Investments S.C.A. 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., a specialised investment fund also incorporated in
Luxembourg. Reinet Investments shares are listed on the Luxembourg Stock
Exchange, Reinet Investments` primary listing, and Reinet Investments South
African Depository Receipts are listed in Johannesburg, Reinet Investments`
secondary listing. Reinet Investments shares are included in the `LuxX` index
of the principal shares traded on the Luxembourg exchange and the Reinet
Investments South African Depositary Receipts are included in the JSE `Top 40`
Share Index.
Sponsor
RAND MERCHANT BANK (a division of FirstRand Bank Limited)
Date: 25/01/2012 07:30:00 Supplied by www.sharenet.co.za
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