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Redefine International agrees debt restructuring, company voluntary arrangements with Aviva Commercial Finance Ltd
REDEFINE PROPERTIES INTERNATIONAL LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2010/009284/06)
JSE share code: RIN ISIN: ZAE000149282
(“RIN”)
Set out below is an announcement which was released by Redefine International P.L.C. (“Redefine
International”), the London Stock Exchange-listed subsidiary of RIN, on the Regulatory News Service
(“RNS”) of the London Stock Exchange today, 17 October 2013.
Given that it is expected that RI PLC will cease to be a subsidiary of RIN following completion of the
unbundling and the de-listing of RIN from the JSE as communicated in the RIN circular dated 19 September
2013 and announced on SENS on 19 September 2013, the acquisition has been treated on the basis that the
unbundling and the de-listing will be implemented and RIN linked unitholders will become direct
shareholders in RI PLC which will hold a primary listing on the LSE and a secondary listing on the JSE. As
set out below, the acquisition is expected to complete by 6 December 2013 at which time RI PLC is expected to
be inwardly listed on the JSE and RIN is expected to be de-listed from the JSE. In the event that the
unbundling and the de-listing are not implemented, the acquisition will be treated in accordance with the JSE
Listings Requirements.
Linked unitholders are referred to the cautionary announcement released on SENS on 26 September 2013
regarding a proposed significant acquisition and are advised that following the release of the announcement
set out below, are no longer required to exercise caution when dealing in their linked units.
REDEFINE INTERNATIONAL P.L.C.
('Redefine International' or the 'Company')
REDEFINE INTERNATIONAL AGREES DEBT RESTRUCTURING AND COMPANY VOLUNTARY
ARRANGEMENTS WITH AVIVA COMMERCIAL FINANCE LIMITED AND EXCHANGES
CONTRACTS FOR THE PURCHASE OF WESTON FAVELL SHOPPING CENTRE,
NORTHAMPTON
In a significant transaction, Redefine International, the diversified income focused property company, announces
that it has agreed revised arrangements with Aviva Commercial Finance Limited ("Aviva") with respect to the
Company’s UK shopping centre portfolio (the “Transaction”) which will reduce the Group’s loan to value ratio
on a see through basis from approximately 63.7% following the previously announced CMC acquisition, to
approximately 57.3%. As part of the arrangements the Company has exchanged contracts to purchase the
Weston Favell Shopping Centre, Northampton. Completion of the Transaction is subject to certain conditions as
set out below which the Company expects to be fulfilled by 6 December 2013.
Overview
This Transaction, once completed, will result in a restructuring of the Aviva debt secured against Grand Arcade
Shopping Centre in Wigan (“Grand Arcade”) and West Orchards Shopping Centre in Coventry (“West
Orchards”).
The debt against the West Orchards property will be repaid in cash from the Company’s existing cash reserves at
the current market value of the property (GBP37 million) and will result in the property becoming
unencumbered.
The debt against the Grand Arcade property will be reduced by approximately 50% to GBP73 million in
consideration for a cash payment of GBP7 million (also from the Company’s existing cash reserves). The
Company will assume 100% ownership however, Aviva will retain the right to participate in 50% of the income
and capital growth generated by Grand Arcade (after all costs, expenses and interest) going forward. The
Company will have the right to “buy-back” the profit share for a maximum cash payment of GBP18.5 million in
five instalments upon the valuation of Grand Arcade increasing by certain agreed benchmarks.
As part of the arrangements with Aviva, contracts have been exchanged for the purchase of Weston Favell
Shopping Centre, Northampton (“Weston Favell”) for a total consideration of GBP84 million. Aviva will provide
Redefine International with a finance facility of GBP50 million, with the balance of the purchase consideration
being funded by internal cash resources. The interest rate on this Aviva facility will be fixed at circa 5.7% p.a.
and the loan will be repayable in November 2038.
One of the conditions precedent to the acquisition of Weston Favell is that it may be subject to JSE Listings
Requirements which may require the approval by Redefine Properties International Limited (“RIN”) linked
unitholders in the event that the unbundling of the Redefine International shares held by the Company’s holding
company, RIN, and the de-listing of RIN from the JSE, as announced on 19 September 2013, are not
implemented.
Following completion of the Transaction, the facilities currently provided by Aviva with respect to two of the
Company’s other shopping centres, at Birchwood (Warrington) and Byron Place (Seaham) as well as Grand
Arcade, will be cross collateralised with the facility to be provided for Weston Favell.
The Company Voluntary Arrangements ("CVAs")
It was determined that restructuring the sums owed by Grand Arcade Wigan Limited, Standishgate Wigan
Limited and West Orchards Coventry Limited’s (the “Property Owning Companies”) debts under CVA’s would
be the most appropriate option. This will enable the Property Owning Companies to continue operating as going
concerns and will also ensure that the third party creditors (other than Aviva) of the Property Owning Companies
are settled in full.
Weston Favell
Weston Favell is an enclosed shopping centre situated on the edge of Northampton. The property comprises
approximately 307,763 sqft of retail accommodation arranged over two floors with 1,150 free parking spaces.
Anchored by one of the largest Tesco Extra supermarkets in the UK (156,987 sqft, with a 14.3 years unexpired
lease term), the centre has a total of 56 retail units and seven kiosks let to a variety of national and local retailers.
The centre, which produces a net rental income of GBP6.4 million p.a., was acquired on a net initial yield (after
acquisition costs) of 7.2%. The key investment attractions include the centre’s dominance in the wider
catchment, the lack of supermarket competition in the north east of Northampton and the strength of the Tesco
covenant which accounts for 53% of the net passing rent. The current void rate is 3.4% by ERV and 2.2% by
area.
Greg Clarke, Chairman of Redefine International, commented:
“This Transaction not only produces a reduction in the Company’s see through leverage ratio, but is expected to
be earnings accretive from day one. The Weston Favell Shopping Centre is dominant in its local area and will
benefit from our long term focus on delivering income through focused asset management activity.”
Further enquiries:
Redefine International Property Management Limited
Investment Adviser
Michael Watters, Stephen Oakenfull Tel: +44 (0) 20 7811 0100
FTI Consulting
Public Relations Adviser
Stephanie Highett, Dido Laurimore, Faye Walters Tel: +44 (0) 20 7831 3113
17 October 2013
Sponsor to Redefine Properties International Limited
Java Capital
Date: 17/10/2013 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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