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Proposed Firm Placing And Open Offer To Raise Gross Proceeds Of £127.5 Million
REDEFINE PROPERTIES INTERNATIONAL LIMITED
(Incorporated in the Republic of South Africa
(Registration number 2010/009284/06)
JSE share code: RIN ISIN Code: ZAE000149282
(“RIN”)
___________________________________________________________________________________________________________________
Set out below is an announcement which was released by Redefine International P.L.C. (formerly Wichford P.L.C.)
("RI PLC"), the London Stock Exchange listed subsidiary of RIN, on the Regulatory News Service ("RNS") of the
London Stock Exchange today, 13 September 2012.
The announcement relates to the proposed capital raising by RI PLC by way of a firm placing and an open offer,
further details of which were announced on SENS on 10 August 2012 and 31 August 2012 and set out in the circular
to RIN linked unitholders issued on 10 August 2012 ("the RIN circular").
As advised below, RI PLC will shortly be publishing a prospectus in relation to the proposed capital raising, which
will be available on the company’s website www.redefineintenational.com
Attention is drawn to the fact that a total of GBP127.5 million is proposed to be raised from the combination of
the firm placing and the open offer. The total of GBP127.5 million differs from the amount of GBP104.3 million
(before expected transaction expenses) set out in the RIN circular. The additional GBP23.2 million is proposed to be
raised from the firm placing. From a RIN perspective the additional GBP23.2 million will constitute a category 2
transaction in terms of the Listings Requirements of the JSE Limited and an announcement will be released as and
when this occurs.
___________________________________________________________________________________________________________________
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR
DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHO
LE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR
JAPAN OR ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.
THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER OR
INVITATION TO SELL OR ISSUE, OR ANY SOLICITATION OF ANY OFFER TO PURCHASE OR SUBSCRIBE FOR, ANY NEW ORDINARY
SHARES, NOR SHALL IT (OR ANY PART OF IT), OR THE FACT OF ITS DISTRIBUTION, FORM THE BASIS OF, OR BE RELIED ON IN
CONNECTION WITH OR ACT AS ANY INDUCEMENT TO ENTER INTO, ANY CONTRACT OR COMMITMENT WHATSOEVER WITH
RESPECT TO THE PROPOSED FIRM PLACING AND OPEN OFFER OR OTHERWISE, THIS ANNOUNCEMENT IS NOT A PROSPECTUS
AND INVESTORS SHOULD NOT SUBSCRIBE FOR OR PURCHASE ANY NEW ORDINARY SHARES REFERRED TO IN THIS
ANNOUNCEMENT EXCEPT SOLELY ON THE BASIS OF INFORMATION IN THE PROSPECTUS EXPECTED TO BE PUBLISHED LATER
TODAY. COPIES OF THE PROSPECTUS WILL, FOLLOWING PUBLICATION, BE AVAILABLE FROM REDEFINE INTERNATIONAL P.L.C.'s
HEAD OFFICE AT TOP FLOOR, 14 ATHOL STREET, DOUGLAS, ISLE OF MAN IM1 1JA.
THE SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES, UNLESS REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION. NO PUBLIC
OFFERING OF THE SECURITIES DISCUSSED HEREIN IS BEING MADE IN THE UNITED STATES AND THE INFORMATION CONTAINED
HEREIN DOES NOT CONSTITUTE AN OFFERING OF SECURITIES FOR SALE IN THE UNITED STATES AND THE COMPANY DOES NOT
CURRENTLY INTEND TO REGISTER ANY SECURITIES UNDER THE SECURITIES ACT. THIS ANNOUNCEMENT IS NOT FOR
DISTRIBUTION DIRECTLY OR INDIRECTLY IN OR INTO THE UNITED STATES.
13 September 2012
REDEFINE INTERNATIONAL P.L.C.
(“Redefine”/ “Company”/ “Group”)
PROPOSED FIRM PLACING AND OPEN OFFER TO RAISE GROSS PROCEEDS OF £127.5 MILLION
The Board of Redefine announces today the details of a proposed Firm Placing and Open Offer to raise approximately
£127,500,000 (£122,475,000 net of expenses) through the issue of 490,384,616 New Ordinary Shares at an Issue Price of 26
pence per New Ordinary Share.
Redefine will shortly be publishing a Prospectus in relation to the Firm Placing and Open Offer and will convene an Extraordinary
General Meeting to approve matters necessary to implement the proposed fundraising.
Summary:
- Fundraising totalling £127,500,000 (£122,475,000 net of expenses) by way of a Firm Placing and Open Offer.
- 89,223,606 New Ordinary Shares will be issued through the Firm Placing and 401,161,010 New Ordinary Shares will be
issued through the Open Offer at the Issue Price of 26 pence per New Ordinary Share.
- The Issue Price of 26 pence represents a discount of 7.5 pence (approximately 22.4 per cent). to the closing price of 33.5
pence per Ordinary Share on 12 September 2012 (being the last practicable date prior to the announcement of the Firm
Placing and Open Offer) and a discount of 9.08 pence (25.9 per cent.) to the Company’s fully diluted net asset value per
Ordinary Share of 35.08 pence on 29 February 2012 (being the date of the Group’s most recent published accounts).
- The Board remains confident of the Group's long term growth prospects but, in order to achieve this growth, the Group
needs to reduce its financial leverage and create a stable long-term capital structure.
- Accordingly, the Board has decided that it is in the best interests of the Group and its Shareholders as a whole to raise
approximately £122,475,000 (net of expenses) of new equity capital. The net proceeds of the Firm Placing and Open Offer
will be used to reduce the Group's financial leverage through the repayment and restructuring of certain debt facilities as a
priority and further to take advantage of distressed and/or attractive investments. The capital raised is expected to provide
a long-term stable capital structure from which a sustainable dividend can be distributed.
- The Firm Placing and Open Offer has the support of the Company's largest shareholder, Redefine Properties International,
which holds approximately 71.7 per cent. of the Company's Ordinary Shares, and accordingly your Board is confident that
the Firm Placing and Open Offer will be successful.
Terms of the proposed Firm Placing and Open Offer:
- The Company is proposing to issue 89,223,606 New Ordinary shares through the Firm Placing and 401,161,010 New
Ordinary Shares through the Open Offer, in each case at the Issue Price of 26 pence, raising approximately £127,000,000
(£122,475,000 net of expenses).
- Under the Open Offer the Company proposes to raise £104,301,863 (before expenses).
- Under the Firm Placing the Company proposes to raise £23,198,137 (before expenses), in respect of which £10,318,140 has
been conditionally placed by the Joint Sponsors with institutional and other investors pursuant to the Placing Agreement
and £12,879,997 will be subscribed for pursuant to the RIFM Placing Agreement.
- Qualifying Shareholders are, subject to the terms and conditions of the Open Offer, being given the opportunity under the
Open Offer to apply for New Ordinary Shares at the Issue Price on the following pro rata basis:
9 Open Offer Shares for every 13 Existing Ordinary Shares
held by them and registered in their names on the Record Date and so in proportion to any other number of Existing
Ordinary Shares then held, rounded down to the nearest whole number of Open Offer Shares.
- Qualifying Shareholders applying for their full Basic Entitlements may also apply, under the Excess Application Facility, for
Excess Shares in excess of their Basic Entitlement. Qualifying Shareholders eligible to apply under the Excess Application
Facility will be entitled to apply for up to a maximum number of Excess Shares equal to 1 times the Basic Entitlement of such
Qualifying Shareholders at the Record Date, rounded down to the nearest whole number of Excess Shares as at the Record
Date, allocated in such manner as the Directors may, in their absolute discretion determine.
- Those Directors, who in aggregate hold 4,600,040 Existing Ordinary Shares representing approximately 0.79 per cent. of the
Existing Ordinary Shares, have irrevocably undertaken to take up their Open Offer Entitlements in respect of an aggregate of
3,184,642 New Ordinary Shares (£828,007 in aggregate) and have irrevocably undertaken to vote in favour of each of the
Resolutions at the EGM.
- Redefine Properties International, which holds 415,507,157 Existing Ordinary Shares (representing approximately 71.7 per
cent. of the Existing Ordinary Shares) has irrevocably undertaken to take up, in full, its Basic Entitlement in respect of
287,658,801 New Ordinary Shares (£74,791,288 in aggregate) and has irrevocably undertaken not to apply for any Excess
Shares.
- Certain other existing Shareholders, who in aggregate hold 60,645,071 Existing Ordinary Shares representing approximately
10.5 per cent. of the Existing Ordinary Shares, have irrevocably undertaken to take up their Open Offer Entitlements in
respect of an aggregate of 38,523,505 New Ordinary Shares (£10,016,112 in aggregate).
- The balance of Open Offer Shares not otherwise taken up by existing Shareholders under the Open Offer (including the
Excess Application Facility) have been conditionally placed by the Joint Sponsors and RIFM with institutional and certain
other investors pursuant to the Placing agreement and the RIFM Placing Agreement.
- Further, Redefine Properties International has irrevocably undertaken to vote in favour of each of the Resolutions at the
EGM, representing approximately 71.7 per cent. of all votes capable of being cast in respect of each of the Resolutions.
- The Firm Placing and Open Offer are conditional, inter alia, on Admission and the passing of the Resolutions.
- Admission is expected to occur and dealings in the New Ordinary Shares are expected to commence on 9 October 2012.
- Investec Bank plc and Peel Hunt LLP are acting as Joint Sponsor and Joint Brokers to the Company.
Commenting, Greg Clarke, Chairman of Redefine, said:
“The launch of our £127.5 million Firm Placing and Open Offer represents a significant step in the Company’s evolution. We
have achieved considerable success in the restructuring of our finance facilities over the last year which has significantly
strengthened the Company's financial position. The Company is now well placed to initiate this capital raising to further reduce
Redefine’s leverage and provide capital to take advantage of distressed or attractive opportunities.
“We are pleased to have secured underwriting or irrevocable commitments for the full £104.3 million Open Offer and are
delighted to announce additional Firm Placing commitments of £23.2 million from leading institutions. We look forward to
applying the proceeds in order to drive the next stage of our growth and deliver value to our shareholders.”
For further information, please contact:
Redefine International Property Management Ltd
Investment Adviser
Michael Watters, Stephen Oakenfull Tel: +44 (0) 20 7811 0100
Investec Bank plc
Joint Sponsor and Joint Corporate Broker
Jeremy Ellis, Chris Sim, David Anderson Tel: +44 (0) 20 7597 5970
Peel Hunt
Joint Sponsor and Joint Corporate Broker
Capel Irwin, Matthew Armitt, Hugh Preston Tel: +44 (0) 20 7418 8900
FTI Consulting
Public Relations Adviser
Stephanie Highett, Dido Laurimore Tel: +44 (0) 20 7831 3113
A copy of the Prospectus and presentation will both be made available today on the Company’s website
http://www.redefineinternational.com
Notes to editors:
Redefine International P.L.C.
Redefine is an income focused property investment company with exposure to a broad range of properties and geographical
areas. The Company has direct and indirect property investments geographically diversified across the UK, Germany,
Switzerland, the Channel Islands, the Netherlands and Australia, providing exposure to the retail, office, industrial and hotel
sectors. On 23 August 2011 the Company completed a reverse takeover of RIHL (then called Redefine International plc), an AIM
listed company. The Company is admitted to trading on the main market of the London Stock Exchange and is part of the
Redefine Properties group.
The Company is managed by its Investment Advisor, RIFM.
Investec Bank plc
Investec Bank plc ("Investec"), which is authorised and regulated in the United Kingdom by the FSA, is acting solely for the
Company in relation to the Firm Placing and Open Offer and will not be responsible to anyone other than the Company for
providing the protections afforded to clients of Investec nor for providing advice in relation to the Firm Placing and Open Offer
or any other matter referred to in this announcement.
Peel Hunt
Peel Hunt LLP ("Peel Hunt") which is authorised and regulated in the United Kingdom by the FSA, is acting solely for the
Company in relation to the Firm Placing and Open Offer and no one else and will not be responsible to anyone other than the
Company for providing the protections afforded to clients of Peel Hunt nor for providing advice in relation to the Firm Placing
and Open Offer or any other matter referred to in this announcement.
This announcement and the information contained herein is restricted and is not for release, publication or distribution, in
whole or in part, directly or indirectly, in or into the United States, Australia, Canada or Japan or any jurisdiction into which the
publication or distribution would be unlawful.
This announcement is for information purposes only and does not constitute or form part of any offer or invitation to sell or
issue, or any solicitation of any offer to purchase or subscribe for, any New Ordinary Shares in the United States, Australia,
Canada or Japan or any jurisdiction in which such offer or solicitation would be unlawful. Any failure to comply with these
restrictions may constitute a violation of the securities laws of such jurisdictions. The securities have not been and will not be
registered under the Securities Act and may not be offered, sold or transferred, directly or indirectly, within the United States
unless registered under the Securities Act except pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and the securities laws of any state or other jurisdiction of the United States. The
securities are being offered and sold outside the United States in accordance with Regulation S under the Securities Act. No
public offering of the shares referred to in this announcement is being made in the United States, Australia, Canada or Japan or
any jurisdiction in which such public offering would be unlawful.
The information in this press release may not be forwarded or distributed to any other person and may not be reproduced in
any manner whatsoever. Any forwarding, distribution, reproduction, or disclosure of this information in whole or in part is
unauthorised. Failure to comply with this directive may result in a violation of the Securities Act or the applicable laws of other
jurisdictions.
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
This announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward-
looking statements may be identified by the use of forward-looking terminology, including the terms "believes", "estimates",
"plans", "projects", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other
variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These
forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this
announcement and include, but are not limited to, statements regarding the Company's and/or the Group's intentions, beliefs
or current expectations concerning, among other things, the Company's and/or the Group's business, results of operations,
financial position, prospects, growth and strategies.
By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and
circumstances. Forward-looking statements are not guarantees of future performance and the actual results of the Company
and/or the Group's operations, financial position and the development of the markets and the industries in which the Group
operates may differ materially from those described in, or suggested by, the forward-looking statements contained in this
announcement. In addition, even if the Group's results of operations and financial position and the development of the markets
and the industries in which the Company and the Group currently operate, 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. A number of risks, uncertainties and other factors could cause results and developments to differ
materially from those expressed or implied by the forward-looking statements.
Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements in this
announcement reflect the Group's current view with respect to future events and are subject to risks relating to future events
and other risks, uncertainties and assumptions relating to the Group's business, results of operations, financial condition,
prospects, growth and strategies. Investors should specifically consider the factors identified in this announcement, which
could cause actual results to differ, before making an investment decision. Subject to the requirements of the Listing Rules, the
Prospectus Rules and the Disclosure and Transparency Rules, the Company undertakes no obligation publicly to release the
result of any revisions to any forward-looking statements in this announcement that may occur due to any change in the
Company's expectations or to reflect events or circumstances after the date of this announcement.
FIRM PLACING AND OPEN OFFER
EXTRACT FROM THE CHAIRMAN’S LETTER
INTRODUCTION
The Board of Redefine announces today that it proposes to undertake a Firm Placing and Open Offer to raise approximately
£127,500,000 (£122,475,000 net of expenses) through the issue of 490,384,616 New Ordinary Shares at an Issue Price of 26
pence per New Ordinary Share. The Issue Price represents a discount of approximately 22.4 per cent. to the Closing Price of 33.5
pence per Existing Ordinary Share on 12 September 2012 (being the last Business Day prior to the announcement of the Firm
Placing and Open Offer). 89,223,606 New Ordinary Shares will be issued through the Firm Placing and 401,161,010 New
Ordinary Shares will be issued through the Open Offer.
The Firm Placing and Open Offer is conditional upon, amongst other things, the approval of Shareholders at the Extraordinary
General Meeting and upon the Placing Agreement becoming unconditional in all respects. The purpose of this announcement
and the Prospectus and circular containing a notice of the Extraordinary General Meeting issued today, is to explain the
background to and rationale for the Firm Placing and Open Offer and why your Board believes that proceeding with the Firm
Placing and Open Offer is in the best interests of Shareholders as a whole and, accordingly, unanimously recommends that you
vote in favour of the Resolutions at the Extraordinary General Meeting, details of which are set out in the Notice of
Extraordinary General Meeting in Part XVIII of the Prospectus.
In addition, the Board also proposes to effect a share consolidation subsequent to completion of the Firm Placing and Open
Offer, under which the Existing Ordinary Shares and the New Ordinary Shares issued pursuant to the Firm Placing and Open
Offer will be consolidated into consolidated Ordinary Shares on a 0.9 for 1 basis.
INFORMATION ON THE COMPANY
The Company, which is not regulated or authorised in any jurisdiction, is an Isle of Man registered property investment company
with an existing portfolio of investments geographically diversified across the UK, Germany, Switzerland, the Channel Islands,
the Netherlands and Australia, providing exposure to the retail, office, industrial and hotel sectors. The Company completed the
Reverse Takeover of RIHL (then called Redefine International plc), an AIM listed company, on 23 August 2011 and the enlarged
group was admitted to trading on the main market for listed securities of the London Stock Exchange on that date. The Company
is part of the Redefine Properties group. The majority shareholder of the Company is Redefine Properties International, which is
listed on the JSE. The ultimate holding company, Redefine Properties, which has a 54 per cent. shareholding in Redefine
Properties International, is listed on the JSE and has a market capitalisation of approximately £1.9 billion.
The Company is a diversified, income focused property investment company owning 182 properties in the UK and Continental
Europe totalling 7,072,000 square feet, valued by external valuers at £942.7 million as at 31 August 2012 (assuming 100 percent
ownership of each of the properties). The Company also owns a 23.08 per cent. interest in ASX listed Cromwell, with a market
value of approximately £132.1 million as at 31 August 2012 (based on an exchange rate of £1.536 AUD).
For the financial year to 31 August 2011, the Group reported an annual rental income of £26.8 million, profit from operations of
£23.3 million and profit before tax of £5.1 million. As of 29 February 2012, the Company had total assets of £1,196.6 million, net
debt of £821 million and total equity of £217 million. The Company's market capitalisation was approximately £194.1 million as
at 12 September 2012, being the last practicable date prior to the date of this announcement.
The Company is advised on an exclusive basis by the Investment Adviser. Redefine Properties indirectly owns a 76.05 per cent.
shareholding in the Investment Adviser. The Investment Adviser's management team has considerable expertise in property and
structured finance.
BACKGROUND TO AND REASONS FOR THE FIRM PLACING AND OPEN OFFER
On 13 July 2011 the Company announced the Reverse Takeover of Redefine by Wichford. As part of the terms of the merger, a
Capital Raising Implementation Agreement was entered into between the Company, Redefine Properties International (its
largest shareholder following completion of the Reverse Takeover) and its ultimate parent, Redefine Properties. The Capital
Raising Implementation Agreement was entered into with the objective of reducing the Group's debt to equity ratio and to assist
with, inter alia, the refinancing of the Company's Delta and Gamma debt Facilities, which mature in October 2012.
The Group's current loan to value ratio of 82.5 per cent. needs to be reduced in order to achieve a long term stable capital
structure from which a sustainable dividend can be distributed to Shareholders. As a result of a significant decline in property
values, the Directors believe the current loan to value ratio is excessive, and should be reduced to provide a stronger capital
base and lower financial leverage. The target in the medium term is for an overall loan to value ratio (net of cash) of not more
than 60 per cent.
Following on-going negotiations with the servicer of the Delta Facility, the Company has reached agreement to restructure the
Delta Facility and, at this point in time, envisages a sales and marketing process for the properties which are the subject of the
Gamma Facility which will result in a smaller portfolio of core assets let to the UK Government. The reduction in exposure to
regional government-let offices will enhance the overall quality of the Group's portfolio and significantly reduce the risk
associated with on-going Government austerity programmes.
The Company has agreed to the sale of the VBG assets with the sales proceeds being utilised to repay the associated loan
facilities in full and final settlement of the outstanding balances. The balance of the loan, €37.3 million, not repaid from the €80
million sales proceeds will be fully sub-ordinated with the Company acquiring the remaining debt balance for a nominal amount.
In addition, the servicer has acknowledged in the workout agreement that there shall be no further claims against the remaining
debt balance. As part of the sales process, the Company has agreed to acquire a 50 per cent. share of the assets in joint venture
with a major pension fund.
The Board has also identified new acquisition opportunities in German discount retail units and London-based limited service
hotels.
As part of the Company's strategy to increase its operational focus and reduce its leverage, the sale of certain legacy and non-
core assets will continue. The Company has successfully completed the sale of shares in the companies which held a 96 per cent.
shareholding in the Justice Centre in Halle, Germany. The sale removed €37.1 million of debt from the Company's balance sheet.
The sale of certain smaller non-core assets will also be targeted to reduce the overall number of assets within the Group's
portfolio.
The Company remains committed to simplifying its corporate structure and continues to explore ways in which it could
eliminate the separate listings and corporate structures of Redefine and Redefine Properties International on the London Stock
Exchange and JSE respectively. It is the Company's ultimate intention to create a single vehicle with a primary listing on the
London Stock Exchange. Approval for this is dependent on SARB consent, which to date has not been forthcoming but which the
Company continues to pursue as part of its longer term strategy. The Company continues to monitor the situation and any
changes to policy which would allow the Company to be dual-listed on the London Stock Exchange and JSE respectively.
The proposed capital raising as envisaged in the Reverse Takeover prospectus will proceed as set out in the letter from the
Chairman of the Company contained in the Prospectus and the Directors can confirm that Redefine Properties International has
agreed to subscribe for its full Basic Entitlement under the Open Offer (amounting to £74,791,288) and has undertaken to
support the Company by voting in favour of the Resolutions at the EGM.
The equity funding has been structured as a Firm Placing and Open Offer to minimise the time and cost of a traditional rights
offer, whilst still giving Shareholders a pre-emptive entitlement to participate in the capital raise. The Firm Placing element has
been included to broaden the institutional shareholder base, which is considered important in light of the single largest majority
shareholder Redefine Properties International currently holding over 70 per cent. of the Company's issued share capital.
The Directors believe that the Issue Price represents an attractive opportunity for the Company to secure additional equity
funding without significant dilution if Shareholders participate in the Open Offer. Furthermore, given the discount to net asset
value that the issued Ordinary Shares currently trade at (congruous with the sector), the Board believe that it would be
imprudent to issue shares at a large discount to the prevailing share price.
USE OF PROCEEDS
The Directors intend to use the net proceeds of the Firm Placing and Open Offer amounting to approximately £122,475,000
million to reduce the Group's financial leverage through the repayment and restructuring of certain debt facilities as a priority
and further to take advantage of distressed and/or attractive investments. The capital raised is expected to provide a long-term
stable capital structure from which a sustainable dividend can be distributed.
Restructuring of the Delta Facility
Following ongoing negotiations with the servicer, the Company has reached an in principle agreement on restructuring and
extending the Delta Facility for a period of approximately two and a half years. Key commercial terms include:
- The repayment of debt associated with seven selected assets for a total consideration of £33.5 million. Six of the selected
assets (excluding the Lyon House development site) are occupied primarily by UK central government departments,
providing a WAULT of 17 years and a net initial yield on the repayment amount of 7.6 per cent.
- Lyon House, Harrow is included in the seven assets which are to be released from security. The Company received full
planning consent in May 2012 for a new residential-led, mixed use, development scheme on the currently vacant Lyon
House and Equitable House sites in the heart of Harrow town centre. The development, between St. John's Road and Lyon
Road, will provide a total of 287 residential units, of which 49 will be affordable housing. The scheme will offer a range of
accommodation including maisonettes and apartments across seven separate blocks of varying heights. The Company has
already concluded a development agreement with Metropolitan Housing Trust for the affordable element of the scheme.
- The existing facility balance of £114.6 million will be reduced to £81.1 million following repayment and release of the seven
assets identified above. The facility will be extended to 15 April 2015 during which period the Company has agreed to
undertake a sales and marketing process to realise assets and repay, to the extent possible, the remaining debt balance. The
Company will continue to receive a proportion of net cashflows after debt service costs (subject to certain limited sales
targets) on those assets still secured by the facility. The facility margin will remain unchanged at 0.75 per cent. p.a. during
the period of the extension with interest being charged at 3 months Libor plus the 0.75 per cent. margin. The Company aims
to enter into an interest rate cap with a strike price of 4.95 per cent. p.a. (equating to the previous and now matured swap
rate) for the period of the extension.
VBG sale and restructuring
As announced on 3 August 2012, the Company has agreed in principle the sale and restructuring of all four VBG assets. The
proceeds from the sale will be used to repay the VBG financing facilities in final settlement of the €117.3 million (£98.7 million)
outstanding loan balance. The carrying value of debt as at 29 February 2012 was £93.4 million reflecting the loan value (£98.7
million) less the remaining fair value adjustment (£5.3 million). The balance of the loan, €37.3 million, not repaid from the €80
million sales proceeds will be fully sub-ordinated with the Company acquiring the remaining debt balance for a nominal amount.
In addition, the servicer has acknowledged in the workout agreement that there shall be no further claims against the remaining
debt balance.
The VBG1 facility matured on 15 January 2010 and was subsequently extended to 15 January 2012. The VBG2 facility matured
on 21 April 2011. Both facilities were not repaid on the original or extended maturity dates. Following the expiry of the VBG1
and VBG2 facilities on 15 January 2012 and 21 April 2011 respectively, the borrowers entered into separate standstill
agreements in respect of both facilities pursuant to which the lenders agreed to refrain from exercising any rights they have in
respect of the repayment breaches. As part of the agreed VBG restructure a workout agreement was entered into in July 2012,
as set out in Part XV of the Prospectus, and contains further standstill provisions in respect of both facilities which supersede the
previous standstill agreements.
As part of the VBG restructure, the Company will dispose of 50 per cent. of its interest in Wichford VBG Holding S.a.r.l (the VBG
holding company) for a nominal value establishing a new joint venture with a major pension fund. Wichford VBG Holding S.a.r.l,
and certain of its subsidiary companies falling under the joint venture, have reached agreement with the servicer to dispose of
the VBG assets for €80.0 million to new subsidiary companies within the joint venture vehicle. The proceeds from the disposal
will be used to settle the original VBG facilities in full with the assets being released from security.
The new joint venture will part fund the gross acquisition cost (inclusive of transaction costs) of €84.9 million with a new five
year €57.0 million debt facility at an indicative all in interest rate of 2.8 per cent. The Company will inject €14.0 million (£11.7
million) for its 50 per cent. stake which shows an initial yield on equity of 19.0 per cent. per annum. The Company will take on
full management responsibility for the VBG assets.
The VBG assets comprise four individual office properties let to a German government-backed social insurance body in Berlin,
Dresden, Cologne and Stuttgart. The leases have unexpired terms of between 7.8 and 12.6 years and are indexed to 100 per
cent. of German CPI.
Refinancing and deleveraging of existing facilities
The Company has agreed and completed the restructuring of the Delamere Place, Crewe Facility with Aviva in May 2012. The
outstanding balance of £17.15 million was settled in return for an £11.0 million cash payment. The £11.0 million repayment was
funded from the Coronation Facility although it is intended that the Coronation Facility will be repaid using £11.0 million of the
proceeds of the Firm Placing and Open Offer.
In addition to the Coronation Facility repayment and in line with the Group's strategy to reduce its overall debt to equity ratio,
various near term facilities detailed below totalling £71.3 million are anticipated to be refinanced at loan to value ratios of
approximately 60 per cent., resulting in equity requirements of approximately £8.9 million In the absence of suitable refinancing
options, the Company has a number of alternative options at its disposal including the repayment of the loans through the sale
of the secured assets, the use of cash funds or a combination of these alternatives. All of these loans are non-recourse to the
Group meaning the Group is not obliged to inject new capital into these facilities on maturity.
The following facilities have been taken into account in arriving at the anticipated capital requirements above:
- Zeta Portfolio, Lloyds TSB — the £46.0 million facility matures in May 2013. The last reported loan to value ratio was 63.3
per cent.
- Newington House, Allied Irish Bank — the £6.4 million facility matures in September 2013. The last reported loan to value
ratio is 65.1 per cent.
- Swansea, Lloyds TSB — the £1.4 million facility matures in June 2014. The last reported loan to value ratio was 88.7 per
cent.
- Ciref Berlin/German Portfolio, ABN Amro — the €22.0 million (£17.5 million) facility matures in September 2014. The last
reported loan to value ratio was 92.8 per cent.
Funds for new opportunities
Current economic conditions, a lack of bank finance and a general deleveraging process in the broader real estate sector are
creating opportunities for well capitalised investors. Approximately £57.4 million (assuming net proceeds from the Firm Placing
and Open Offer of £122,475,000 million) has been earmarked to take advantage of distressed and/or attractive investment
opportunities where the Company aims to achieve a 10 per cent. yield on equity on a blended basis.
The Company is in discussions on a number of potential investment opportunities, particularly within the London based limited
service hotel sector and the German discount retail market. Investments currently under negotiation but not yet committed
total approximately £14.0 million
CURRENT TRADING AND PROSPECTS FOR THE GROUP
Current Trading
UK Stable Income
The investment market for UK regional offices remains subdued as concerns over excess supply, government austerity measures
and the lack of availability of bank funding continue to impact demand for these types of assets. Transactional activity and
values have been negatively impacted but the Company remains focused on maintaining occupancy levels and income across
the portfolio. The Company's exposure to UK regional offices is anticipated to reduce materially as a result of the negotiations
on the Delta and Gamma financing facilities.
Overall occupancy has reduced slightly to 93.3 per cent. (February 2012: 95.0 per cent.). A number of smaller asset management
initiatives are in progress and shorter term leases totalling 195,000 sq ft are under negotiation for extension or renewal.
Following the refurbishment of Coburg House in South London, the Company has let the top floor (5,550 sq ft) to InterHealth
Medical at a rent of £69,313 p.a. This recent letting successfully completes a complex asset management plan to retain the
existing tenant in occupation while refurbishing the property, extending the existing tenants lease to 2023 with a break in 2018
and re-letting the vacant top floor. The property is now fully occupied.
Harrow redevelopment
Following receipt of full planning consent for a new residential led, mixed use development scheme on the currently vacant Lyon
House and Equitable House sites in the heart of Harrow town centre, the Company has received Greater London Authority
approval. It has also made significant progress on the Section 106 agreement with Harrow Borough Council.
The development, between St. John's and Lyon Roads, will provide a total of 287 residential units, of which 49 will be affordable
housing. The scheme will offer a range of accommodation including maisonettes and apartments across seven separate blocks
of varying heights. The Company has already concluded a development agreement with Metropolitan Housing Trust for the
affordable housing element of the scheme.
The Company intends to secure a joint venture partner to carry out the development of the scheme. The development is
anticipated to commence in early 2013, subject to agreement on terms and the completion of the Section 106 agreement.
UK Retail
Whilst overall conditions remain difficult, there have been signs of improved consumer confidence in the second quarter of the
calendar year, possibly driven by the Queen's Diamond Jubilee celebrations and the Olympics. There is a risk however, that this
could be overshadowed by the impact of the continuing European sovereign debt crisis.
Although the number of retailer insolvencies appears to have stabilised recently, certain retailers remain under pressure. Some
comfort can be taken from the fact that, with certain exceptions including, Game, Clinton Cards and Blacks Leisure, the profile of
retailers entering administration has mainly been the smaller local and regional operators.
The portfolio maintained a healthy occupancy rate of 95.2 per cent. (94.8 per cent. as at 29 February 2012). Overall footfall for
the period to 31 May 2012 was down 0.1 per cent. year on year.
Europe
The European portfolio has maintained near full occupancy and is providing consistent inflation-linked rental income returns.
The majority of the Group's exposure is to German discount retail assets let to predominantly multi-national discount retailers
and office assets let to government-backed organisations.
Hotels
The Hotel portfolio tenant continues to trade well and, with a strong peak season and Olympic period, underlying performance
is expected to exceed revenue budgets for the current quarter. London's Organising Committee of the Olympic and Paralympic
Games (LOCOG) took occupancy of 222 rooms across the Company's hotel portfolio throughout the period of the Olympic and
Paralympic Games.
Occupancy throughout the two-week Olympic period was an exceptional 98 per cent.
Cromwell Property Group ("Cromwell")
The Company's strategic 23.08 per cent. shareholding in Cromwell continues to produce consistent distributions supported by
the high quality investment portfolio. The June 2012 distribution, announced as AUD 1.75 cents per security, was received on 17
August 2012. The receipt of this distribution was fixed at an exchange rate of AUD1.5032:GBP1.00. Distribution guidance for the
2012 financial year has been confirmed by Cromwell at AUD 7.0 cents per security. Cromwell continues to refine its portfolio to
focus on those assets considered to have the highest risk-weighted return.
Debt Restructuring
As at the date of the Prospectus, the Company has agreed the restructuring of approximately £254.5 million of debt secured
against the Group's assets, including the sale of the VBG assets and the restructuring of the Delta Facility, both legacy
investments.
The Gamma Facility is due to mature during October 2012, at which time the £199.7 million principal balance will become due
and payable. The Gamma Facility is secured against 38 properties in the Company's UK stable income portfolio that are valued at
approximately £155.7 million and generated rental income of approximately £17.1 million in the year ended 30 August 2011.
The Company is in on-going negotiations with the facility servicer to amend or restructure the terms of the facility, however, the
parties have not reached any agreement to date.
Given the existing loan to value ratios within the Gamma Facility, the Directors cannot recommend to Shareholders that a
significant amount of capital be utilised to refinance the facility and, therefore, the Directors envisage a sales and marketing
process for the Gamma assets. The Company will continue to explore all available options to refinance all or part of the Gamma
Facility on terms that are attractive to Shareholders and justify new capital being invested, however, there is no certainty that
any agreement will be reached. If no agreement is reached the servicer may appoint an administrator to realise the assets and
utilise the proceeds to repay the Gamma Facility. The servicer may enforce its security rights which would include debentures in
respect of all secured Gamma assets and the shares in each Gamma subsidiary granted as security. Were the servicer to enforce
its security over all the Gamma assets and such subsidiaries' shares there would be a positive impact on the Group's net asset
position but the Group's rental income would be reduced by the amount otherwise receivable in connection with the Gamma
assets. The Directors are currently of the opinion that whilst it is unlikely that an agreement will be reached to restructure the
Gamma Facility prior to the maturity date of the loan they expect that the servicer will grant a standstill period whilst a workout
agreement can be agreed with respect to the Gamma Facility and the associated assets.
Prospects
There has been substantial progress in meeting the Group's strategic objectives, particularly in respect of exiting non-core
assets, restructuring debt facilities and investing into sectors which continue to perform and deliver strong income returns.
These actions, together with the proposed capital raise, will result in a significantly strengthened balance sheet and reduction in
exposure to near term debt maturities.
Lower valuations are anticipated in the near term as rental and capital growth remains susceptible to fragile economic
conditions and the availability of capital remains limited. These conditions are, however, providing attractive opportunities for
well capitalised investors.
The progress achieved in this last period has placed the Company in a significantly stronger position from which to raise the
proposed new capital. Over £254.5 million of legacy facilities have been, or are in the process of being, restructured or repaid,
significantly reducing both leverage and near term refinancing requirements.
The Reverse Takeover Prospectus dated 13 July 2011 included a profit forecast which is still outstanding in relation to the year
ended 31 August 2012. In accordance with the Prospectus Rules Appendix 3 Annex 1 13.4 the Directors confirm that, at the date
of the Prospectus, the profit forecast and the principal assumptions on which it was based are still valid and correct in all
material respects, save for significant variances to the assumptions relating to fair value adjustments both in respect of
investment property and finance expenses, which are factors outside of the control or influence of the Directors, and the impact
of the Halle sale in July 2012 described in Part V of the Prospectus. In particular, the forecast for distributable earnings included
in the profit forecast remains valid and correct.
KEY TERMS OF THE FIRM PLACING AND OPEN OFFER
Redefine is proposing to raise approximately £122,475,000 (net of expenses) by way of the Firm Placing and Open Offer.
89,223,606 New Ordinary Shares will be issued through the Firm Placing and 401,161,010 New Ordinary Shares will be issued
through the Open Offer.
Under the Open Offer the Company proposes to raise £127,500,000 (before expenses). Redefine Properties International has
irrevocably undertaken to accept its Basic Entitlement under the Open Offer in respect of £74,791,288 of Open Offer Shares.
The Company has received irrevocable undertakings from certain other existing Shareholders to accept Basic Entitlements under
the Open Offer in respect of £10,016,112 of Open Offer Shares. Further details of such irrevocable undertakings are set out in
the Prospectus. In addition, £3,796,185 of Open Offer Shares have been conditionally placed by the Joint Sponsors with
institutional and other investors pursuant to the Placing Agreement, and £15,698,278 of Open Offer Shares have been
conditionally placed with certain other investors pursuant to the RIFM Placing Agreement, in each case subject to clawback to
satisfy valid applications under the Open Offer. Further details of the Placing Agreement, and the RIFM Placing Agreement are
set out in the Prospectus.
Under the Firm Placing the Company proposes to raise £23,198,137 (before expenses), in respect of which £10,318,140 has been
conditionally placed by the Joint Sponsors with institutional and other investors pursuant to the Placing Agreement, and
£12,879,997 will be subscribed for pursuant to the RIFM Placing Agreement.
The Issue Price of 26 pence per Open Offer Share and Firm Placed Share represents a discount of 7.5 pence (22.4 per cent.) to
the closing price of 33.5 pence per Ordinary Share on 12 September 2012 (being the last practicable date prior to announcement
of the Firm Placing and Open Offer) and a discount of approximately 25.9 per cent. to the net asset value per Existing Ordinary
Share of 35.08 pence at 29 February 2012. However, your attention is drawn to paragraph 5 of Part VIII of the Prospectus which
explains the valuation movements since 29 February 2012.
Open Offer
Redefine Properties has underwritten Redefine Properties International's participation of up to £65.6 million, and Redefine
Properties International has irrevocably undertaken to subscribe for its pro rata share of 71.7 per cent. under the Open Offer.
The balance of Open Offer Shares not otherwise taken up by existing Shareholders under the Open Offer (including the Excess
Application Facility) have been conditionally placed by the Joint Sponsors and RIFM with institutional and certain other investors
pursuant to the Placing Agreement and the RIFM Placing Agreement.
Qualifying Shareholders are being given the opportunity to subscribe under the Open Offer for Open Offer Shares at the Issue
Price payable in full on application and free of expenses, pro rata to their existing holdings of Existing Ordinary Shares, on the
following basis:
9 Open Offer Shares for every 13 Existing Ordinary Shares held by them
and registered in their names on the Record Date, and so in proportion to any other number of Existing Ordinary Shares then
held, rounded down to the nearest whole number of Open Offer Shares.
Qualifying Shareholders applying for their full Basic Entitlement may also apply, under the Excess Application Facility, for Excess
Shares in excess of their Basic Entitlement at the Issue Price, payable in full on application and free of expenses. Qualifying
Shareholders eligible to apply under the Excess Application Facility will be entitled to apply for up to a maximum number of
Excess Shares equal to 1 times the Basic Entitlement of such Qualifying Shareholders validly applying for Excess Shares as at the
Record Date, rounded down to the nearest whole number of Excess Shares, allocated in such manner as the Directors may, in
their absolute discretion determine.
Fractions representing Open Offer Shares which would otherwise have arisen under the Open Offer (including under the Excess
Application Facility) following the Consolidation will be aggregated and sold in the market place for the benefit of the Company.
The Open Offer is not a "rights issue". Invitations to apply under the Open Offer are not transferrable. Application Forms are
not documents of title and cannot be traded. Qualifying Shareholders should be aware that, in the Open Offer, unlike in the
case of a rights issue, any New Ordinary Shares not applied for under the Open Offer will not be sold in the market or placed
for the benefit of Qualifying Shareholders. Qualifying Shareholders applying for their full Basic Entitlement may, however,
apply for Open Offer Shares in excess of that Basic Entitlement through the Excess Application Facility.
The Firm Placing and Open Offer is conditional, inter alia, upon:
- the passing, without amendment, of the Resolutions;
- Admission taking place by no later than 8.00 a.m. on 9 October 2012 (or such later time and date as the Company,
Investec and Peel Hunt may agree being not later than 31 October 2012); and
- the Placing Agreement and RIFM Placing Agreement having become unconditional in all respects (save for the condition
relating to Admission) and not having been terminated in accordance with its terms.
Details of the Open Offer and the terms and conditions on which it is being made, including procedure for application and
payment, are contained in Part VII of the Prospectus and for Qualifying Non-CREST Shareholders in the accompanying
Application Form.
To be valid, Application Forms (duly completed by Qualifying Non-CREST Shareholders) in respect of Basic Entitlements and
payment in full for the Open Offer Shares applied for in respect of Basic Entitlements and in respect of Open Offer Shares
pursuant to the Excess Application Facility and payment in full for such Excess Shares applied for, should be delivered to the
Company's Receiving Agent Capita Registrars, Corporate Actions, 34 Beckenham Road, Beckenham, Kent BR3 4TU by post or
(during normal business hours only) by hand as soon as possible but in any event so as to arrive no later than 11.00 a.m. on 3
October 2012.
Application has been made for the Basic Entitlements and the Excess CREST Open Offer Entitlements to be admitted to CREST. It
is expected that the Basic Entitlements and Excess CREST Open Offer Entitlements will be admitted to CREST at 11.00 a.m. on 14
September 2012. The Basic Entitlements and Excess CREST Open Offer Entitlements will also be enabled for settlement in CREST
at 11.00 a.m. on 14 September 2012.
Qualifying CREST Shareholders should note that, although the Basic Entitlements and Excess CREST Open Offer Entitlements will
be admitted to CREST and be enabled for settlement, applications in respect of entitlements under the Open Offer may only be
made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim raised by
Euroclear's Claims Processing Unit.
Application will be made to the UKLA for the Open Offer Shares to be admitted to the premium segment of the Official List and
to the London Stock Exchange for the Open Offer Shares to be admitted to trading on the London Stock Exchange's main market
for listed securities. It is expected that Admission will become effective on 9 October 2012 and that dealings in the Open Offer
shares will commence at 8.00 a.m. on the same day.
The Open Offer Shares, when issued and fully paid, will be identical to and rank in full with the Ordinary Shares for dividends and
other distributions declared, save that the New Ordinary Shares will not rank for the second interim dividend expected to be
paid on 22 November 2012 to those Shareholders on the register as at 28 September 2012, and will rank pari passu in all
respects with the existing Ordinary Shares as at the date of issue. No temporary documents of title will be issued.
Any Qualifying Shareholder who has sold or transferred all or part of his/her registered holding(s) of Ordinary Shares prior to the
close of business on 11 September 2012 is advised to consult his or her stockbroker, bank or other agent through or to whom
the sale transfer was effected as soon as possible, since the invitation to apply for Open Offer Shares under the Open Offer may
be a benefit which may be claimed from him/her by the purchaser under the Rules of the London Stock Exchange.
Redefine Properties International has irrevocably undertaken not to apply for any further New Ordinary Shares under the Excess
Application Facility.
Further information on the Firm Placing and Open Offer and terms and conditions on which it is made, including procedure
for application and payment, are set out in Part VII of the Prospectus and, where relevant, on the applicable Application
Form.
Firm Placing
The Company is proposing to issue 89,223,606 Firm Placed Shares pursuant to the Firm Placing, pursuant to the Placing
Agreement, the principal terms and conditions of which are summarised in paragraph 20.1 of Part XV of the Prospectus.
The Firm Placed Shares are not subject to clawback and do not form part of the Open Offer. The Firm Placing is expected to raise
approximately £22,649,164 (net of expenses).
The Firm Placing is subject to the same conditions and termination rights which apply to the Open Offer.
Application will be made to the UKLA for the Firm Placed Shares to be admitted to the premium segment of the Official List and
to the London Stock Exchange for the Firm Placed Shares to be admitted to trading on the London Stock Exchange's main market
for listed securities.
The Firm Placed Shares, when issued and fully paid, will be identical to and rank in full with the Ordinary Shares for all dividends
and other distributions declared, made or paid after Admission, and will rank pari passu in all respects with the existing Ordinary
Shares as at the date of issue save that the New Ordinary Shares will not rank for the second interim dividend expected to be
paid on 22 November 2012 to those Shareholders on the register as at 28 September 2012. A further announcement will be
made in respect of this dividend in due course.
Redefine Properties International is not participating in the Firm Placing.
EFFECT OF THE FIRM PLACING AND OPEN OFFER
In structuring the Firm Placing and Open Offer, the Directors have given a great deal of thought as to how to structure the
proposed equity fundraising, having regard to current market conditions, the level of the Company's share price and the
importance of pre-emption rights to Shareholders. After considering all of these factors, the Directors have concluded that the
Firm Placing and Open Offer is the most suitable option available to the Company and its Shareholders. The Open Offer provides
an opportunity for all Qualifying Shareholders to participate in the fundraising by subscribing for Open Offer Shares pro rata to
their current holding of Existing Ordinary Shares.
Upon completion of the Firm Placing and Open Offer, the New Ordinary Shares will represent approximately 45.8 per cent. of
the Company's Enlarged Issued Share Capital and the Existing Ordinary Shares will represent approximately 54.2 per cent. of the
Company's Enlarged Issued Share Capital. New Ordinary Shares issued through the Firm Placing and New Ordinary Shares issued
through the Open Offer will account for approximately 18.2 per cent. and 81.8 per cent. respectively of the total New Ordinary
Shares issued through the Firm Placing and Open Offer. The Resolutions set out in the Notice attached to the Prospectus must
be passed at the Extraordinary General Meeting in order for the Firm Placing and Open Offer to proceed.
The Firm Placing and Open Offer will result in an increase in cash and other short term funds of £122,475,000 with a
corresponding £122,475,000 increase in net assets. A pro forma statement of net assets illustrating the effect of the Firm Placing
and Open Offer on the Company's net assets as at 29 February 2012, as if they had been undertaken at that date, is set out in
Part XII of the Prospectus. This information is unaudited and has been prepared for illustrative purposes only.
Dilution
Following the issue of the New Ordinary Shares to be allotted pursuant to the Firm Placing and Open Offer, Qualifying
Shareholders who take up their full entitlements in respect of the Open Offer will suffer a dilution of up to 8.3 per cent. to their
interests in the Company. Qualifying Shareholders who do not take up any of their entitlements in respect of the Open Offer and
Shareholders not eligible to participate in the Open Offer will suffer a dilution of approximately 45.8 per cent. to their interests
in the Company.
RELATIONSHIP AGREEMENT
In connection with the Reverse Takeover which completed in August 2011, Redefine Properties International (as the majority
Shareholder) and the Company, in respect of itself and the Group entered into the Relationship Agreement setting out the
governance arrangements for the Group. Following the Firm Placing and Open Offer, Redefine Properties International will be
interested in at least 65.7 per cent. of the Company and, therefore, the Relationship Agreement will continue to apply.
Subject to ongoing compliance with all regulatory requirements (including the rules of the JSE), the Relationship Agreement
contains certain corporate governance arrangements to facilitate the independent operation of the Group. The Relationship
Agreement limits the ability of Redefine Properties International from appointing Associates as directors to form a majority of
the board of the Group and would prevent Redefine Properties International from taking actions that could result in the de-
listing of the Group.
The Relationship Agreement also:
- limits the ability of Redefine Properties International and its Associates from voting on matters not permitted under Chapter
11 of the Listing Rules or otherwise not complying with the Listing Rules;
- ensures that all transactions between the Group and Redefine Properties International and/or its Associates will be on a
normal commercial basis as would be agreed between parties acting in their own interests; and
- prevents Redefine Properties International from modifying the Articles in any manner that is inconsistent with the
Relationship Agreement.
Redefine Properties International has undertaken not to dispose of any shares held by it in the capital of the Company prior to
completion of the Placing and Open Offer.
The Relationship Agreement applies to Redefine Properties International and, to the extent that any shares in the Group which
are beneficially owned by Redefine Properties International are transferred to one or more of its Associates, Redefine Properties
International would be required to procure that such Associates enter into parallel obligations prior to the transfer of shares.
The obligations of Redefine Properties International and its Associates under the Relationship Agreement will only terminate if
the beneficial ownership of Redefine Properties International and its Associates in the Group either falls below 30 per cent., or
the Company is no longer admitted to listing on the Official List and to trading on the London Stock Exchange
PROPOSED SHARE CONSOLIDATION
Following the completion of the Firm Placing and Open Offer and Admission it is proposed that the Existing Ordinary Shares and
New Ordinary Shares issued pursuant to the Firm Placing and Open Offer, will be consolidated into consolidated Ordinary Shares
on a 0.9 for 1 basis.
Following the Firm Placing and Open Offer and the Share Consolidation, the Company's issued ordinary share capital will
comprise 962,855,467 ordinary shares of 8.0 pence each in the capital of the Company.
The Share Consolidation will give rise to fractional entitlements to Consolidated Ordinary Shares where Shareholders hold a
number of Existing Ordinary Shares and/or New Ordinary Shares which is not exactly divisible by 0.9. Subject to Resolution 5
being approved by Shareholders at the General Meeting, Shareholders with a holding of Existing Ordinary Shares and/or New
Ordinary Shares which is not exactly divisible by 0.9 will, pursuant to the Share Consolidation, have their holding rounded down
to the nearest number of Consolidated Ordinary Shares. Fractional entitlements to Consolidated Ordinary Shares will not be
issued and will, so far as possible, be aggregated and be sold at the best price reasonably obtainable in the market for the
benefit of the Company.
In the view of the Board, aggregating such fractional entitlements, selling them and sending cheques to Shareholders in respect
of their pro rata proportion of the proceeds is neither practical nor cost-efficient given the relatively small sums of money
attributable to each individual Shareholder concerned. In accordance with Resolution 5, any fractional entitlements to
Consolidated Ordinary Shares arising on the Share Consolidation will therefore be sold for the benefit of the Company.
The proportion of the issued ordinary share capital of the Company held by each Shareholder following the Share Consolidation
(save for any fractional entitlements) will remain unchanged. Apart from having a different nominal value, each Consolidated
Ordinary Share will carry the same rights as set out in the Articles that currently attach to the Existing Ordinary Shares and will
attach to the New Ordinary Shares issued pursuant to the Firm Placing and Open Offer. The Share Consolidation will not affect
the Company's net assets nor the assets of the Group, as a whole.
Any New Ordinary Shares to be issued in certificated form in connection with the Firm Placing and Open Offer will be
represented by definitive share certificates, which are expected to be despatched by 16 October 2012 to the persons entitled
thereto at the relevant person's registered address. The share certificates will reflect the effects of both the Firm Placing and
Open Offer and the Share Consolidation which is expected to occur on 11 October 2012 if approved at the General Meeting.
Pending the issue of definitive certificates, transfers will be certified against the register. No temporary documents of title in
respect of the New Ordinary Shares will be issued.
The Share Consolidation is conditional upon the approval of Shareholders at the General Meeting as required by the IOM Acts
and the Articles. Due to the inter-conditionality of the Resolutions proposed at the General Meeting, all such Resolutions will
need to be passed in order for the Share Consolidation to take effect.
Requests will be made to the UK Listing Authority and to the London Stock Exchange to reflect, on the Official List and the
London Stock Exchange's main market for listed securities, respectively, the effect of the Share Consolidation.
IRREVOCABLE UNDERTAKINGS
Those Directors who are also Shareholders, who in aggregate hold 4,600,040 Existing Ordinary Shares representing
approximately 0.79 per cent. of the Existing Ordinary Shares, have also irrevocably undertaken to take up their Open Offer
Entitlements in respect of an aggregate of 3,184,642 New Ordinary Shares (£828,007 in aggregate).
Redefine Properties International, which holds 415,507,157 Existing Ordinary Shares (representing approximately 71.7 per cent.
of the Existing Ordinary Shares) has irrevocably undertaken to take up, in full, its Basic Entitlement in respect of 287,658,801
New Ordinary Shares and has irrevocably undertaken not to apply for any Excess Shares. Admission will be the final condition in
relation to the irrevocable undertaking given by Redefine Properties International.
Certain other existing Shareholders who in aggregate hold 60,645,071 Existing Ordinary Shares representing approximately 10.5
per cent. of the Existing Ordinary Shares, have also irrevocably undertaken to take up their Open Offer Entitlements in respect of
an aggregate of 38,523,505 New Ordinary Shares (£10,016,112 in aggregate).
Further, Redefine Properties International has irrevocably undertaken to vote in favour of each of the Resolutions at the EGM,
representing approximately 71.7 per cent. of all votes capable of being cast in respect of each of the Resolutions.
Those Directors who own Existing Ordinary Shares have irrevocably undertaken to vote in favour of each of the Resolutions at
the EGM, representing approximately 0.79 per cent. of all votes capable of being cast in respect of each of the Resolutions.
CONTINUED INTENTION TO CONVERT TO A UK REIT
The Company has previously highlighted its intention to convert to a UK REIT and continues to closely monitor changes to the UK
REIT regime. A decision as to whether to convert to a UK REIT will be confirmed once the proposed new legislation is enacted,
and a final assessment of the benefits to Shareholders can be confirmed. Under current proposals it is expected that the 2.0 per
cent. gross asset conversion charge will be removed, providing an efficient method of converting to a transparent and tax
efficient regime.
The Board recognises the trend towards and advantages of internalising management and intends to conduct a detailed
assessment of this alternative and whether it would be in the best interests of Shareholders.
INVESTMENT POLICY OF THE GROUP
The Group's strategy is focused on delivering sustainable and growing income returns through investment into income yielding
assets, let to high quality occupiers on long leases. Development exposure is generally limited to asset management and
ancillary development of existing assets in order to enhance and protect capital values. The Group is focused on real estate
investment in large, well developed economies with established and transparent real estate markets. The investment portfolio is
geographically diversified across the UK, Europe and Australia providing exposure to the retail, office, industrial and hotel
sectors.
The Group's current investment policy is set out below.
Investment Policy
The Group's investment policy is to provide investors with strong investment returns and a balanced exposure to lower risk
income generating assets and opportunities that will provide a higher capital return.
In implementing its investment policy, the Group will contemplate available opportunities and future undertakings that will
yield satisfactory returns at acceptable risk levels. In making investments the Group will seek to achieve a reasonable level of
diversification across a spread of assets and geographies. The Group currently has investments in the United Kingdom,
Switzerland, Germany, the Netherlands, the Channel Islands and Australia concentrating on the retail, government, commercial
(office and industrial) and hotel sectors.
Investment Criteria
- The Group will focus on property investments which provide a stable, predictable and low risk income stream, with
opportunities to enhance value through active management.
- The Group will also selectively pursue development or redevelopment opportunities where they can be substantially pre-
let to businesses with strong rental covenants or in order to protect, enhance or extract additional value from existing
investments. This will include residential, hotel, retail or mixed use developments if appropriate.
- The Group may also look at distressed property investments where opportunities arise as markets recover. Investments
outside the above criteria will only be made where risk adjusted returns to Shareholders are satisfactory and the Group has
the reserves necessary to extract an above-market return from the investments.
The Group will make investments in property via a number of methods which include:
- acquisition of the real estate assets or portfolio of assets;
- direct investment in or acquisition of the holding company of the real estate asset or portfolio of assets;
- direct investment in or acquisition of a joint venture vehicle which has a direct investment in or holds the real estate assets
or the holding company of the real estate asset or portfolio of assets; and
- investments in property securities (debt and/or equity securities) which are acquired when their value is considered
superior to physical property. These investments are often of a strategic nature where the shareholding can be used to
unlock value in underlying property assets or significant influence can be exerted through board representation or through
management.
Gearing
The level of gearing of the Group will be governed by careful consideration of the cost of borrowing and the ability to mitigate
the risk of interest rate increases and the effect of leverage on the returns generated from assets acquired. The Directors
intend that the Group's level of borrowing will be between 50 per cent. and 65 per cent. of the gross value of its total assets
through the cycle. The Group's maximum level of gearing will not exceed 85 per cent. of the gross value of the Group's total
assets at any point in time. Details of the Group's borrowing limits under its Articles of Association are set out below:
"The Group's board may exercise all the powers of the Group to borrow money, to give guarantees, to mortgage, hypothecate,
pledge or charge all or any part of the undertaking, property and assets (present and future) and uncalled capital of the Group
and, subject to the provisions of the IOM Act and the Articles, to create and issue debenture and other loan stock and
debentures and other securities, whether outright or as collateral security for any debt, liability or obligation of the Group or of
any third party. Provided that the Board shall restrict the borrowings of the Group so as to secure that the aggregate principal
amount for the time being of all borrowings by the Group and for the time being owing to persons outside the Group shall not
at any time, without the previous sanction of an ordinary resolution of the Group exceed ten times the aggregate of:
- the amount paid up on the issued share capital for the time being of the Company; and
- the total of capital and revenue reserves (including any share premium account, capital redemption reserve, all as shown in
the latest balance sheet of the Company)."
Investment Restrictions
- The Group will not invest in forward funding a development on land in which the Group does not have an interest without
a pre-let agreement to lease.
- The Group will not invest in properties where the purchase price is not supported by an external valuation.
- The Group will not invest in properties where there are known to be material environmental issues.
- The Group will typically invest in properties in the UK with fully repairing and insuring leases.
- No more than 15 per cent. in aggregate, of the value of the total assets of the Group may be invested in other listed closed-
ended investment funds and/or debt instruments (provided that if such listed closed-ended investment funds themselves
do not have a published investment policy limiting exposure to other listed closed-ended investment funds to 15 per cent.
of total assets, the maximum exposure of the Group shall be 10 per cent. of its total assets).
- In addition, pursuant to the Listing Rules, the Group is subject to the following investment restrictions:
~ The Group must at all times manage its assets in a way which is consistent with its object of spreading investment risk
and is in accordance with the Company's published investment policy.
~ The Group and other members of the Group must not conduct any trading activity which is significant in the context of
the Group as a whole.
Investment Process
The Directors set the investment policy (subject to Shareholder approval), parameters and objectives and review and approve
each sale or purchase of investment assets.
The Group's Investment Advisor is responsible for identifying and reporting to the Company's Directors, the availability of new
investment opportunities that fall within the investment policy and objectives. Following the identification of a potential new
investment opportunity and approval by the Company's Directors, the Investment Advisor is responsible for negotiating the
terms of investment.
It is anticipated that all associated costs and expenses incurred by the Group when acquiring or disposing of properties,
property portfolios or special purpose property vehicles will be paid for and capitalised by the Group in order to determine the
total cost.
Changes to the Investment Policy
The Group will apply its investment policy to all investments made and held by it. Any material changes to the investment
policy of the Group will only be made with the approval of Shareholders by ordinary resolution at a general meeting, which will
also be notified via a regulatory information service provider to the London Stock Exchange.
If the Group breaches its investment policy (including any investment restrictions), the Group will make a notification via a
regulatory information service provider to the London Stock Exchange of details of the breach and of actions it may or may
have taken.
Investor Profile
The Directors expect typical investors in the Group to be primarily UK based fund managers or sophisticated private investors or
those acting on the advice of their stockbroker or financial adviser, who are looking to allocate part of their investment portfolio
to the UK, Continental European and Australian commercial property market.
DIVIDEND POLICY
Shareholders on the shareholder register of the Company on the Redefine Record Date have received an interim dividend of
2.10 pence per Existing Ordinary Share for the six month period ended 29 February 2012, as declared on 30 April 2012. The
rights attaching to the Ordinary Shares are uniform in all respects and they form a single class for all purposes. Holders of
Ordinary Shares have uniform voting rights and rights to dividends or distributions in proportion to the number of Ordinary
Shares they hold at any time, save that the New Ordinary Shares will not rank for the second interim dividend expected to be
paid on 22 November 2012 to those Shareholders on the register as at 28 September 2012.
Following completion of the Firm Placing and Open Offer, with effect from 1 September 2012 (and taking into consideration the
Company's desire to convert to a UK REIT) it is expected that the Company will seek to distribute at least 90 per cent. of property
rental profits, to fall in line with the current UK REIT regime. However, there is no assurance that the Company will pay a
dividend or if a dividend is paid, the amount of such dividend.
WORKING CAPITAL
The Company is of the opinion that, after taking into account the existing bank and other facilities and the guaranteed proceeds
of the Firm Placing and Open Offer, the Group does not have sufficient working capital for its present requirements, that is, for
at least the next 12 months from the date of this announcement.
The Gamma Facility is due to mature on 15 October 2012, at which time the £199.7 million principal balance of the loan will
become due and payable. The Gamma Facility is non-recourse in nature and given the existing loan to value ratio in this portfolio
the Company does not intend that a significant amount of capital be utilised to refinance the facility. The Company will continue
to work with the loan servicer to manage the portfolio of assets, however, should the Company fail to reach an agreement with
the servicer the servicer will be entitled enforce its security rights over the assets secured against the Gamma Facility. Should
the servicer enforce its security rights over the assets secured against the Gamma Facility the £199.7 million liability to the
servicer will be settled in full by such enforcement of its security rights and the Group will no longer own those assets secured by
the facility and will not benefit from the rental income receivable from them (being approximately £17.1 million in the year
ended 31 August 2012). The Directors are currently of the opinion that whilst it is unlikely that an agreement will be reached to
restructure the Gamma Facility prior to the maturity date of the loan they expect that the servicer will grant a standstill period
whilst a workout agreement can be agreed with respect to the Gamma Facility and the associated assets.
Notwithstanding the Directors' intention to restructure the Gamma Facility, the Company is of the opinion that, should the
servicer enforce its security and after taking into account the subsequent forfeiture of the assets secured against the Gamma
Facility, the existing bank and other facilities and the guaranteed proceeds of the Firm Placing and Open Offer, the Group has
sufficient working capital for its present requirements, that is, for at least the next 12 months from the date of this
announcement.
SIGNIFICANT CHANGE
With the exception of the impact of valuations prepared as at 31 August 2012 as outlined in paragraph 4 of Part VIII of the
Prospectus there has been no significant change in the financial position of the Group from 29 February 2012 (being the date of
the unaudited condensed consolidated interim financial statements of the Group) to the date of this announcement. The value
of investment properties (excluding property assets held in joint ventures and associates) decreased from £870.5 million as at 29
February 2012 (excluding properties sold since that date) to £793.6 million as at the date of this announcement (excluding
acquisitions). This represents a decrease of 8.8 per cent.
There has been no significant change in the trading position of the Group from 29 February 2012 to the date of this
announcement excluding:
- the impact of fair value adjustments on investment properties outside the control of the Directors. Adverse fair value
adjustments on investment properties (excluding joint ventures and associates) in the period were £76.9 million;
- the impact of the restructuring of the Delamere Place, Crewe Facility with Aviva in May 2012. As outlined in paragraph 4 of
the Prospectus, the outstanding balance of this facility (£17.15 million) was settled in return for an £11.0 million cash
payment resulting in a gain of £6.15 million being recognised in the period.
TAXATION
Information regarding certain aspects of UK and Isle of Man taxation is set out in Part XIV of the Prospectus. These details are,
however, intended only as a general guide to certain aspects of the current tax position under UK and Isle of Man taxation law.
Shareholders who are in any doubt as to their tax position or who are subject to tax in jurisdictions other than the UK and Isle of
Man are strongly advised to consult their own independent financial adviser without delay.
EXTRAORDINARY GENERAL MEETING
A notice convening the Extraordinary General Meeting, to be held at 09.30 a.m. on 8 October 2012 at Top Floor, 14 Athol Street,
Douglas, Isle of Man, IM1 1JA is set out at the end of the Prospectus. The Extraordinary General Meeting is being convened for
the purpose of considering and, if thought fit, passing the Resolutions. The full text of the Resolutions is set out in the notice at
the back of the Prospectus.
RECOMMENDATION
Your Board considers that the terms of the Firm Placing and Open Offer and each of the Resolutions to be proposed at the
Extraordinary General Meeting are in the best interests of the Company and the Shareholders as a whole.
Accordingly, your Board unanimously recommends that all Shareholders vote in favour of the Resolutions to be proposed at the
Extraordinary General Meeting, as those Directors who own Existing Ordinary Shares intend to do in respect of their own
beneficial holdings comprising 4,600,040 Existing Ordinary Shares in aggregate, representing approximately 0.79 per cent. of the
existing issued share capital of the Company as at 12 October 2012, the latest practicable date prior to the publication of the
Prospectus.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Event Time/Date
Record Date for entitlements under the Open Offer 5.00 p.m. on 11 September 2012
Announcement of the Firm Placing and Open Offer 7.00 a.m. on 13 September 2012
Despatch of the Prospectus, Forms of Proxy and Application Forms
13 September 2012
Ex-entitlement date for the Open Offer 8.00 a.m. on 13 September 2012
Open Offer Entitlements and Excess Open Offer Entitlements credited to CREST
stock account of Qualifying CREST Shareholders in CREST by 14 September 2012
Event Time/Date
Latest recommended time and date for requesting withdrawal of Open Offer
Entitlements and Excess Open Offer Entitlements from CREST (i.e. if Open Offer
Entitlements and Excess Open Offer Entitlements are in CREST and you wish to
convert them into certificated form) 4.30 p.m. on 26 September 2012
Latest time and date for depositing Open Offer Entitlements and Excess Open Offer
Entitlements into CREST (i.e. where a Qualifying Shareholder wishes to hold Open
Offer Entitlements and Excess Open Offer Entitlements set out in an Application
Form as Open Offer Entitlements in CREST and Excess Open Offer Entitlements in
CREST) 3.00 p.m. on 28 September 2012
Latest time and date for splitting Application Forms (to satisfy bona fide market
claims only) 3.00 p.m. on 1 October 2012
Latest time and date for receipt of completed Application Forms and payment in
full under the Open Offer and settlement of CREST instructions (as appropriate) 11.00 a.m. on 3 October 2012
Announcement of the results of the Open Offer 7.00 a.m. on 4 October 2012
Latest time and date for receipt of Forms of Proxy and electronic proxy
appointments (CREST Proxy Instructions) by Shareholders for the Extraordinary
General Meeting 9.30 a.m. on 6 October 2012
Extraordinary General Meeting 9.30 a.m. on 8 October 2012
Announcement of the results of the Extraordinary General Meeting 8 October 2012
Admission and commencement of dealings in the New Ordinary Shares fully paid
on the premium segment of the main market of the London Stock Exchange 8.00 a.m. on 9 October 2012
New Ordinary Shares in uncertificated form expected to be credited to CREST Stock As soon as is practicable after 8.00 a.m.
accounts on 9 October 2012
Share Consolidation Record Date 5.00 p.m. on 10 October 2012
CREST stock accounts to be credited with the Consolidated Ordinary Shares in
uncertificated form 8.00 a.m. on 11 October 2012
Despatch of definitive certificates for the Consolidated Ordinary Shares (reflecting
New Ordinary Shares issued pursuant to the Firm Placing and Open Offer) On or around 16 October 2012
General notes:
1. Reference to times in the Prospectus are to London time unless otherwise stated.
2. The ability to participate in the Open Offer is subject to certain restrictions relating to Overseas Shareholders, details of
which are set out in Part VII of the Prospectus.
3. The times and dates set out in the expected timetable of principal events above and mentioned throughout the
Prospectus may be adjusted by Redefine, in which event details of the new times and dates will be notified to the UK
Listing Authority, the London Stock Exchange and, where appropriate, Qualifying Shareholders. In particular, in the event
that withdrawal rights arise under Section 87Q of FSMA prior to Admission, Redefine, Peel Hunt and Investec may agree to
defer Admission until such time as such withdrawal rights no longer apply.
4. Different deadlines and procedures for return of forms may apply in certain cases. For example where Shareholders hold
their Existing Ordinary Shares through a CREST member or other nominee, that Shareholder may set an earlier date for
application and payment than the dates noted above.
DEFINITIONS AND GLOSSARY OF TECHNICAL TERMS
The following definitions apply throughout this announcement, unless the context otherwise requires:
“Admission and Disclosure Standards” the admission and disclosure standards of the London Stock Exchange
containing among other things, the admission requirements to be observed
by companies seeking admission to trading on the London Stock Exchange’s
main market for listed securities
“Admission” the admission of the New Ordinary Shares to the Premium segment of the
Official List becoming effective in accordance with the Listing Rules and
admission of the New Ordinary Shares to trading on the London Stock
Exchange’s Main Market for listed securities becoming effective in
accordance with the Admission and Disclosure Standards in each case as
Ordinary Shares if the Consolidation is approved at the EGM
“AIM” AIM, a market operated by the London Stock Exchange
“Application Form” the personalised application form on which Qualifying Non-CREST
Shareholders may apply for Open Offer Shares under the Open Offer
(including Excess Shares under the Excess Application Facility)
“Articles” the articles of association of the Company, as amended from time to time
“Associate” has the meaning given in the Listing Rules
“ASX” Australian Stock Exchange
“AUD” Australian dollars, the lawful currency of Australia
“Backstop Capital Raising” a fully pre-emptive backstop equity capital raising of the Company (if
relevant) in an amount not exceeding £100 million (net of expenses) should
the Capital Raising not succeed
“Basic Entitlement” or “Open Offer the entitlement of Qualifying Shareholders to subscribe for 9 Open Offer
Entitlement” Shares for every 13 Existing Ordinary Shares registered in their name as at
the Record Date on and subject to the terms of the Open Offer
“the Board” or “the Directors” the Company’s directors from time to time
“Business Days” means any day (other than a Saturday, Sunday or public holiday in England)
on which clearing banks in the City of London are open for the transaction of
normal sterling banking business
“Capita Registrars” a trading name of Capita Registrars Limited
“Capital Raising” the Firm Placing and Open Offer
“Capital Raising Implementation the agreement dated 13 July 2011 entered into between the
Agreement” Company, Redefine Properties International and Redefine Properties relating
to the Capital Raising and (if relevant) the Backstop Capital Raising
“certificated” or “in certificated form” recorded on the relevant register of the relevant company as being held in
certificated form (that is not in CREST) and title to which may be transferred
by means of a stock transfer form
“Closing Price” the closing, middle market quotation of an Ordinary Share, as published in
the Daily Official List on a particular day
“Company” or “Redefine” Redefine International P.L.C., a company registered in the Isle of Man with
registered number 111198C and having its registered office at Top Floor, 14
Athol Street, Douglas, Isle of Man IM1 1JA
“Consolidated Ordinary Shares” the ordinary shares of 8.0 pence each in the capital of the Company
following the Share Consolidation
“Coronation Facility” the facility dated 15 January 2012 between (1) Coronation Group
Investments Limited and (2) the Company
“CREST” the system for paperless settlement of trades and holdings of uncertificated
shares administered and operated by Euroclear UK
“CREST Regulations” the Uncertificated Securities Regulations 2005 (of the Isle of Man) (Statutory
Document No. 754/05) as amended
“Cromwell” Cromwell Property Group, Australia, an Australian property trust which has
stapled securities consisting of units in an Australian real estate investment
fund (Cromwell Diversified Property Trust)
“Delta Facility” a facility agreement dated 21 July 2006, as amended on 1 December 2006, 5
December 2006 and 26 July 2007 and extended pursuant to a letter dated 3
September 2010, between (1) Wichford Delta Limited (as borrower), (2)
certain wholly owned subsidiaries within the Group (as original guarantors),
(3) L.C.P.I. (United Kingdom Branch) (as original lender) and (4) Lehman
Brothers (as arranger, agent and security trustee)
“Delta and Gamma Facilities” together the Delta Facility and the Gamma Facility
“Enlarged Issued Share Capital” the Ordinary Share capital of the Company following completion of the Firm
Placing and Open Offer
“Euro” the single currency of any member State of the European Community
adopted in accordance with legislation of the European Union for European
Monetary Union
“Euroclear UK” Euroclear UK & Ireland Limited, the operator of CREST
“European Economic Area” the member states of the European Union, Iceland, Norway and
Liechtenstein
“European Union” the European Union post established by the treaty made at Maastricht on 7
February 1992
“Excess Application Facility” the arrangement whereby Qualifying Shareholders who apply for their Basic
Entitlement in full may apply for Excess Shares in excess of their Basic
Entitlements which may be subject to scaling back
“Excess Open Offer Entitlement” in respect of each Qualifying Shareholder, the entitlement (in addition to
their Basic Entitlement) to apply for Excess Shares in excess of their Basic
Entitlement, pursuant to the Excess Application Facility
“Excess Shares” Open Offer Shares for which Qualifying Shareholders may apply under the
Excess Application Facility
“Excluded Territories” Australia, Canada, Japan, New Zealand and any other territory where the
availability of the Firm Placing and Open Offer would breach local law
“Existing Ordinary Shares” the Ordinary Shares in issue at the Record Date
“Extraordinary General Meeting” the extraordinary general meeting of the Company to be held at Top Floor,
14 Athol Street, Douglas, Isle of Man IM1 1JA at 9.30 on 8 2012 notice of
which is set out in the Prospectus
“Firm Placees” any persons who have agreed or shall agree to subscribe for Firm Placed
Shares pursuant to the Firm Placing
“Firm Placed Shares” the 89,223,606 New Ordinary Shares which the Company is proposing to
allot and issue pursuant to the Firm Placing
“Firm Placing” the placing of Firm Placed Shares
“Form of Proxy” the form of proxy for use by Shareholders in relation to the EGM
“FSA” the United Kingdom Financial Services Authority
“FSMA” the United Kingdom Financial Services and Markets Act 2000 (as amended)
“Gamma Facility” a facility agreement dated 29 March 2005, as amended on 29 June 2005, 15
July 2005, 30 September 2005, 10 November 2005, 18 November 2005, 31
January 2006, 21 July 2006, 28 July 2006 and 5 December 2006 and extended
pursuant to a letter dated 18 August 2010, between (1) Wichford Gamma
Limited (as borrower), (2) Wichford Acton Limited (as original guarantor), (3)
L.C.P.I. (United Kingdom Branch) (as original lender), (4) Lehman Brothers
International (Europe) (“Lehman Brothers”) (as arranger and security
trustee), and (5) certain wholly owned subsidiaries within the Group (as
additional guarantors)
“Group” the Company and its subsidiaries and subsidiary undertakings
“Investec” Investec Bank plc
“Investment Adviser” RIPML
“IOM Acts” the Companies Acts 1931-2004 (as amended) of the Isle of Man and every
statutory modification or re-enactment thereof for the time being in force
and, where the context requires, every other statute from time to time in
force concerning companies and affecting the Company
“Issue Price” 26 pence per New Ordinary Share
“Joint Sponsors” Peel Hunt and Investec
“JSE” JSE Limited (registration number 2005/022939/06), licensed as an exchange
under the Securities Services Act of South Africa (Act 36 of 2004), as
amended, and a public company incorporated in terms of the laws of South
Africa
“JSE Listings Requirements” the Listing Requirements issued by the JSE from time to time
“Listing Rules” the listing rules made under Part VI of FSMA and as set out in the FSA
Handbook, as amended from time to time
“the London Stock Exchange” London Stock Exchange plc
“NAV” or “Net Asset Value” the value of the assets of the Group less its liabilities, determined in
accordance with the accounting principles adopted by the Group from time
to time
“New Ordinary Shares” new ordinary shares of 7.2 pence each in the share capital of the Company
“Notice” the notice convening the Extraordinary General Meeting set out in the
Prospectus
“Official List” the Official List of the UK Listing Authority
“Open Offer” the offer to Qualifying Shareholders, constituting a conditional invitation to
apply for the Open Offer Shares, including pursuant to the Excess Application
Facility, at the Issue Price on the terms and subject to the conditions and, in
the case of Qualifying Non-CREST Shareholders, in the Application Form
“Open Offer Shares” 401,161,010 New Ordinary Shares to be offered to Qualifying Shareholders
under the Open Offer
“Ordinary Shares” the Existing Ordinary Shares of 7.2 pence each in the share capital of the
Company prior to the Consolidation, and ordinary shares of 8.0 pence each
in the share capital of the Company following the Share Consolidation
(including, if the context requires, the New Ordinary Shares)
“Overseas Shareholders” Shareholders with registered addresses outside the United Kingdom or who
are citizens or residents of countries outside the United Kingdom
“Peel Hunt” Peel Hunt LLP
“Placing Agreement” the placing agreement dated 13 September 2012 between the Company,
Peel Hunt, Investec, further details of which are set out in the Prospectus
“Prospectus Rules” the prospectus rules made under Part VI of FSMA in relation to offers of
securities to the public and admission of securities to trading on a regulated
market and as set out in the FSA Handbook, as amended from time to time
“Qualifying CREST Shareholders” Qualifying Shareholders whose Ordinary Shares on the register of members
of the Company on the Record Date are held in uncertificated form in CREST
“Qualifying Non-CREST Shareholders” Qualifying Shareholders whose Ordinary Shares on the register of members
of the Company on the Record Date are held incertificated form
“Qualifying Shareholders” holders of Ordinary Shares on the register of members of the Company on
the Record Date with the exclusion (subject to certain limited exceptions) of
persons with a registered address or located or resident in the US or an
Excluded Territory
“£” or “Pounds Sterling” or “Sterling” the lawful currency of the United Kingdom
“R” or “Rand” the lawful currency of the Republic of South Africa
“Record Date” 5.00 p.m. on 11 September 2012
“Redefine Properties” Redefine Properties Limited (registration number 1999/018591/06), a public
company duly incorporated and registered in terms of the laws of South
Africa and listed on the JSE, with its registered address at 3rd Floor, Redefine
Place, 2 Arnold Road, Rosebank, 2196, South Africa
“Redefine Properties International” Redefine Properties International Limited (registration number
2010/009284/06) a public company duly incorporated and registered in
terms of the laws of South Africa and listed on the JSE, with its registered
address at 3rd floor, Redefine Place, 2 Arnold Road, Rosebank, 2196, South
Africa (formerly Kalpafon Limited)
“Registrar” or “Receiving Agent” Capita Registrars Limited of The Registry, 34 Beckenham Road, Beckenham,
Kent BR3 4TU
“Regulation S” Regulation S under the US Securities Act
“Regulatory Information Service” one of the regulatory information services authorised by the UK Listing
Authority to receive, process and disseminate regulatory information from
listed companies
“REIT” a real estate investment trust under Part 4 of the Finance Act 2006
“Relationship Agreement” the agreement dated 13 July 2011 between the Company and Redefine
Properties International relating to certain governance matters in respect of
the Company
“Resolutions” the resolutions to be proposed at the Extraordinary General Meeting
“Reverse Takeover” the acquisition of RIHL by the Company which became unconditional in all
respects on 23 August 2011
“Reverse Takeover Prospectus” the prospectus issued by the Company dated 13 July 2011, setting out details
of the Reverse Takeover
“RIFM” Redefine Investment International Fund Managers Limited whose business
address is at Coastal Building, Wickhams Cay II, Road Town, Tortola, British
Virgin Islands
“RIFM Placing Agreement” the placing agreement dated 13 September 2012 between the Company and
RIFM, further details of which are set out in paragraph 20.2 of the
Prospectus
"RIHL" Redefine International Holdings Limited, a public company incorporated in
Jersey (registration number 91277), with its registered office at Channel
House, Green Street, St Helier, Jersey JE2 4UH (previously called Redefine
International plc and previously admitted to AIM)
“RIPML” the Group’s investment advisor, Redefine International Property
Management Limited, a private limited company incorporated on 25 June
2002 in the United Kingdom under the Act and registered in England and
Wales with registered number 04469376 and having its registered office at
2nd floor, 11 Haymarket, London SW1Y 4BP
“SARB” South African Reserve Bank
“SEC” the US Securities and Exchange Commission
“Share Consolidation” the proposed 0.9 for 1 consolidation of the Existing Ordinary Shares and the
New Ordinary Shares (to be issued pursuant to the Firm Placing and Open
Offer) into Consolidated Ordinary Shares respectively pursuant to Resolution
5 of the Notice of EGM
“Shareholders” holders of Existing Ordinary Shares and, following Admission, of New
Ordinary Shares
“Subsidiaries” each of the subsidiaries and subsidiary undertakings of the Company, further
details of which are set out in paragraph 2.8 of Part XV of the Prospectus
“UK Listing Authority” or “UKLA” the FSA acting in its capacity as the competent authority for the purposes of
Part VI of FSMA
“UK” or “United Kingdom” the United Kingdom of Great Britain and Northern Ireland
“uncertificated” or “in uncertificated form” recorded on the relevant register of the relevant company for the share or
security concerned as being held in uncertificated form in CREST and title to
which, by virtue of the CREST Regulations, may be transferred by means of
CREST
“UK Corporate Governance” or “Code” the UK Corporate Governance Code issued by the Financial Reporting Council
in May 2010
“US Securities Act” the US Securities Act of 1933, as amended
“US Securities and Exchange Commission” the US government agency having primary responsibility for enforcing the
federal securities and regulating the securities industry/stock market
“US” or the “United States” the United States of America, its territories and possessions, any State of the
United States and the District of Columbia
“VBG” Verwaltungs-Berufsgenossenschaft
“VBG 1 Facility” €71,200,000 Credit Facility between, inter alia, Ticino Property GmbH & Co.
KG, as Dresden borrower, Ebony Verwaltungsgesellschaft mbH & Co.
Vermietungs KG as Berlin borrower, ABN AMRO Bank N.V. as arranger and
original counterparty, Talisman-3 Finance Plc as lender, Bank of America
National Association, London Branch as facility agent and LaSalle Global Trust
Services Limited (formerly known as Lasalle Trustees Limited and as ABN
Amro Trustees Limited) as security agent dated 15 December 2005, as
amended on 30 December 2005 and 27 April 2006
“VBG 2 Facility” A €56,398,248.40 Senior Facility Agreement between, inter alia, Ludwigsburg
Property GmbH & Co. KG as Stuttgart borrower, Dandelion
Verwaltungsgesellschaft mbH & Co. Vermietungs KG as Cologne borrower
and ABN AMRO Bank N.V. as arranger and original counterparty, Talisman-4
Finance Plc as lender, Bank of America National Association, London Branch
as facility agent and LaSalle Global Trust Services Limited (formerly known as
Lasalle Trustees Limited and as ABN Amro Trustees Limited) as security agent
dated 21 April 2006, as amended on 24 May 2006
“VBG Facilities” the VBG 1 Facility and the VBG 2 Facility
“WAULT” weighted average unexpired lease term
13 September 2012
JSE Sponsor to Redefine Properties International Limited
Java Capital
Date: 13/09/2012 08:56:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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