TIDMUCP
RNS Number : 3403J
Unitech Corporate Parks Plc
11 June 2014
11 June 2014
Unitech Corporate Parks plc
("UCP" or the "Company")
Proposed GBP205.9 million sale of Candor Investments Limited to
Brookfield,
Amendment to Investing Policy
and
Notice of Extraordinary General Meeting
Further to the announcement on 3 April 2014 that the Company had
received an approach from a third party expressing interest in a
potential acquisition of the Company's wholly owned subsidiary
Candor Investments Limited, the holding company for UCP's property
interests, the Company announces that it has today entered into an
agreement with an affiliate of Brookfield Property Partners
("Brookfield") for the sale and purchase of the entire issued share
capital of Candor.
-- The Disposal Agreement provides that Brookfield will acquire
Candor, subject to certain conditions, for an aggregate cash
consideration of approximately GBP205.9 million.
-- Following Completion and based on the Assumptions, the
Company is expected to have the cash resources to make capital
returns to Shareholders of approximately 56 pence per Ordinary
Share in aggregate which represents:
- a 45.0 per cent. premium to the Company's prevailing share
price as at 2 April 2014 (being the day before the Company
announced it had received an approach for Candor);
- a 79.2 per cent. premium to the Company's lowest share price
in the last twelve months on 25 September 2013; and
- a premium to the Company's estimated NAV per Ordinary Share
(as at 31 March 2014) of approximately 53 pence.
-- Completion of the Disposal will require, inter alia, the
approval of Shareholders, in accordance with the requirements of
the AIM Rules.
-- The Company will also seek Shareholder approval to adopt a
new Investing Policy to return capital to Shareholders following
the completion of the sale of Candor
-- A circular is being posted to Shareholders today setting out
the background to and reasons for the Disposal and convening an
Extraordinary General Meeting, for 11:30 a.m. on 27 June 2014. The
Chairman's letter, as contained in the Circular, is set out
below.
Terms used and not defined in this announcement bear the meaning
given to them in the Circular to be published today.
Donald Lake, Chairman of UCP, commented:
"The offer for UCP's property interests from Brookfield at above
the latest book valuation reflects the hard work put in over recent
years to let the office space and grow income, in order to achieve
the best possible price on behalf of investors in the Company. The
Independent Directors believe that the proposed sale represents a
very attractive opportunity for investors to realise strong value
from the properties and facilitate a distribution of the proceeds,
and I urge all Shareholders to vote in favour of the resolutions
proposed at the Extraordinary General Meeting."
Enquiries:
Westhouse Securities Limited
Alastair Moreton / Hannah Young / Darren Vickers
Tel: +44 (0)20 7601 6118
FTI Consulting
Richard Sunderland / Stephanie Highett / Will Henderson
Tel: +44 (0)20 3727 1000
Email: richard.sunderland@fticonsulting.com
Letter from the Chairman of Unitech Corporate Parks plc
"Dear Shareholder
Proposals for the sale of Candor Investments Limited,
amendment to the Company's Investing Policy
and
Notice of Extraordinary General Meeting
1. Introduction
On 3 April 2014, the Company announced that it had received an
approach from a third party expressing interest in a potential
acquisition of the Company's wholly owned subsidiary Candor
Investments Limited, the holding company for the Company's Property
Interests. The Company is therefore pleased to announce that it has
today entered into an agreement with Brookfield for the sale and
purchase of the entire issued share capital of Candor. The
Purchaser is an associate of Brookfield Strategic Real Estate
Partners, a $4.4 billion global real estate fund.
The Disposal Agreement provides that Brookfield will acquire
Candor, subject to certain conditions, for an aggregate cash
consideration of approximately GBP205.9 million. Following
Completion and based on the Assumptions, the Company is expected to
have the cash resources to make capital returns to Shareholders of
approximately 56 pence per Ordinary Share in aggregate. The
Independent Directors have been advised by Jones Lang LaSalle and
Westhouse Securities in relation to the Disposal.
Completion of the Disposal will require, inter alia, the
approval of Shareholders, in accordance with the requirements of
the AIM Rules. The level of Shareholder approval required is more
than 50 per cent. of Shareholders voting in respect of the
Disposal.
In addition the Company will, as set out in more detail in
paragraph 6 below, also need to seek Shareholder approval to adopt
a new Investing Policy.
The purpose of this document is:
-- to provide Shareholders with the background to, and rationale for the Disposal;
-- to explain to Shareholders why the Independent Directors have
decided to proceed with the Disposal, subject to Shareholders'
approval;
-- to set out proposals for the future of the Company and the
expected return of capital to Shareholders;
-- to provide details of the proposed New Investing Policy to be adopted by the Company; and
-- to provide details of the Extraordinary General Meeting at
which the Independent Directors are unanimously recommending
Shareholders vote in favour of the Resolutions to approve the
Disposal and the adoption of the New Investing Policy.
Ajay Chandra is managing director of Unitech and since the
Company's investment manager, Nectrus Limited, is an affiliate of
Unitech, Ajay Chandra has not taken part in any of the Board's
deliberations or participated in any Board vote regarding the
Disposal due to a conflict of interest.
At the end of this document, Shareholders will find a Notice of
Extraordinary General Meeting, which has been convened for 11:30
a.m. on 27 June 2014 at IOMA House, Hope Street, Douglas, Isle of
Man IM1 1AP, at which the Resolutions will be put to Shareholders.
It is important that Shareholders complete, sign and return the
Form of Proxy for use at the Extraordinary General Meeting enclosed
with this document, whether or not they intend to attend the
Extraordinary General Meeting. The completion and return of a Form
of Proxy will not preclude Shareholders from attending the
Extraordinary General Meeting and voting in person, should they so
wish.
If the Resolutions as set out in the Notice of Extraordinary
General Meeting are passed, the completion of the Disposal will be
subject to the satisfaction of certain other conditions which are
more fully described in paragraph 3 below and in Part II of this
document. Whilst the timeframe for the satisfaction of the
conditions is difficult to estimate, it is currently expected that
Completion will occur in approximately 3 months.
2. Description of Candor Investments Limited
Candor Investments Limited is a wholly-owned subsidiary of the
Company incorporated in Mauritius. It is the holding company for
the Company's Property Interests, which comprise investments in six
Projects in India, held via special purpose vehicles, such Projects
being InfoSpace Gurgaon G1-ITC, InfoSpace Gurgaon G2-IST, InfoSpace
Noida N1, InfoSpace Noida N2, InfoSpace Noida N3 and InfoSpace
Kolkata K1. Candor's investments are held through separate
Mauritius based, wholly-owned, subsidiaries which in turn hold a 60
per cent. interest in each of the Projects.
Until very recently, the remaining 40 per cent. interest in each
of the Projects were held by Unitech and its affiliates, with the
exception of the InfoSpace Kolkata K1 Project where Unitech held a
36 per cent. interest. On 14 May 2014, the Company was notified
that the equity interests of Unitech in the special purpose
vehicles through which investments in InfoSpace Gurgaon G1-ITC,
InfoSpace Gurgaon G2-IST, InfoSpace Noida N2 and InfoSpace Kolkata
K1 are held, were to be acquired by an independent third party. The
Company has not been notified of any transfer of Unitech's
remaining equity interests in the special purpose vehicles through
which investments in InfoSpace Noida N1 and InfoSpace Noida N3 are
held. In addition, in respect of the InfoSpace Gurgaon G2-IST
("G2") Project, a third party, Gurgaon InfoSpace Limited ("GIL")
holds the title to the land and through a joint development
agreement is entitled to 28 per cent. of the revenue arising from
that Project with Candor and the third party in their capacity as
shareholders in the G2 Project being entitled to the remaining 72
per cent.
As at 31 March 2014, the estimated unaudited net assets of
Candor amounted to approximately GBP195 million, and Candor's
estimated unaudited loss before tax for the year ended 31 March
2014 is GBP0.4 million.
3. Summary of the Disposal
Pursuant to the terms of the Disposal Agreement, the Company has
conditionally agreed to dispose of the entire issued share capital
of Candor to the Purchaser for an aggregate cash consideration of
approximately GBP205.9 million payable at Completion (subject to
adjustment (if any) as provided below).
The Disposal Agreement provides that the consideration is
subject to adjustments and would be reduced to reflect:
-- any payments made since 31 March 2014 by Candor group
entities to the Company or entities affiliated to it or in relation
to the costs of the Transaction; and
-- 60 per cent. of any fixed-term deposits made in the name of
any Project Company with two Indian financial institutions to the
extent that such deposits have not been repaid prior to or on
Completion. The Project Companies' rights to receive repayment of
60 per cent of such deposits will, to the extent such deposits are
not repaid, be assigned (subject to necessary approvals) making 60
per cent. of the outstanding deposits repayable to the Company or
any recovery will be repaid to the Company, in each case after
Completion. As at the date of this document, the Company's
beneficial interest in such deposits is approximately GBP14.7
million.
The Disposal is conditional, inter alia, upon:
(i) no law, order or judgment of any governmental authority
having been issued or occurred prior to Completion which would have
the effect of making Completion unlawful or illegal;
(ii) the passing at the Extraordinary General Meeting of the
Resolutions approving (a) the Disposal and (b) related changes to
the Company's Investment Policy;
(iii) no material adverse change taking place at the Group
level, applying a material significance test and;
(iv) the obtaining of an approval to the contemplated transfer
of Candor's shares by the SEZ Board.
The Purchaser has confirmed that it has also agreed to acquire
the third party interests in InfoSpace Gurgaon G1-ITC, InfoSpace
Gurgaon G2-IST, InfoSpace Noida N2 and (other than a 4 per cent.
interest) InfoSpace Kolkata K1. The Purchaser confirmed that on a
per share basis, the consideration payable for the relevant
Projects to the third party is equivalent to the consideration
payable for such Projects under the Disposal Agreement.
Whilst the timeframe for the satisfaction of the conditions is
difficult to estimate, it is currently expected that Completion
will occur in approximately 3 months.
Further details of the Disposal Agreement are included in Part
II of this document.
4. Background to and reasons for the Disposal
Since the Company's admission to AIM, UCP has been focussed on
developing five of the original six Projects and securing a strong
tenant base. The objective has been to seek to achieve the greatest
value for Shareholders by concentrating on selling Projects where a
substantial proportion of the development has been let and
accordingly has strong visibility as a mature income producing
investment. As at 31 March 2014, progress on the Company's Projects
was as follows:
Development Estimated Estimated LA completed and Committed Leases
Completion Lettable ready for fit outs
Date Area (LA)
Sq ft m Actual % Actual %
G2 Mar 16 3.57 2.84 80 2.53 71
K1 Dec 21 4.40 2.52 57 1.89 43
N1 Dec 17 2.16 0.66 31 0.27 13
N2 Dec 19 3.35 1.85 55 1.49 44
G1 Jan 18 3.31 1.04 31 1.28 39
N3 Mar 23 4.95 - - - -
Total 21.74 8.91 41 7.46 34
In addition, letters of intent in relation to a further 1.21
million sq ft across the Projects have been signed
The Company has achieved significant lettings, particularly in
relation to the G2- Project where total commitments currently
amount to over 80 per cent. of the estimated lettable area.
Accordingly a sale process for this Project, co-ordinated by Jones
Lang LaSalle, was commenced last year and the Company was
encouraged by the level of interest received from a number of
parties. As noted above, unlike UCP's other projects which were set
up as joint ventures between subsidiaries of the Company and
affiliates of Unitech, in the case of G2 a third party, GIL, owned
the land when the Project was conceived in 2004 and receives 28 per
cent. of the revenue. The complexities of this structure meant that
the sale process took longer than expected and, whilst the process
was on-going, the receipt of an approach to acquire the Company's
entire Property Interests through the acquisition of Candor
provided the Company with an attractive alternative to realising
assets on an individual basis and the Independent Directors
believed this subsequent proposal merited further consideration.
Accordingly, the Company announced on 3 April 2014 that the
separate discussions in respect of the potential sale of G2 had
terminated. The Independent Directors have been advised by Jones
Lang LaSalle and Westhouse Securities in relation to the
Disposal.
Following agreement on terms with the Purchaser to acquire
Candor, subject to certain conditions, for an aggregate cash
consideration of approximately GBP205.9 million, the Independent
Directors have concluded that the Disposal is in the best interest
of Shareholders as a whole and that, following Completion, on the
basis of the Assumptions the Company is expected to have the cash
resources to make capital returns to Shareholders of approximately
56 pence per Ordinary Share in aggregate.
The Independent Directors consider that the Disposal has the
following principal benefits:
-- the expected cash resources of the Company, following
Completion and on the basis of the Assumptions, of approximately
GBP201.9 million, equates to an approximate value per Ordinary
Share of 56 pence. This represents a 45.0 per cent. premium to the
Company's prevailing share price as at 2 April 2014 (being the day
before the Company announced it had received an approach for
Candor) and a 79.2 per cent. premium to the Company's lowest share
price in the last twelve months on 25 September 2013;
-- the Company's unaudited NAV per Ordinary Share at 30
September 2013, based on a valuation of the Property Interests by
Knight Frank, amounted to 52 pence and the estimated unaudited NAV
per Ordinary Share at 31 March 2014, based on a valuation of the
Property Interests by CBRE, is approximately 53 pence. Accordingly,
the Disposal provides, on the basis of the Assumptions, an
opportunity to realise the Company's Property Interests and
subsequently return these proceeds to Shareholders at a premium to
NAV per Ordinary Share;
-- the Company's Ordinary Shares have persistently traded at a
significant discount to NAV. As at 2 April 2014 (being the day
before the Company announced it had received an approach for
Candor) the Company's Ordinary Shares traded at a discount of
approximately 28 per cent. to the estimated unaudited NAV per
Ordinary Share as at 31 March 2014 and have traded at an average
discount to NAV per Ordinary Share of over 25 per cent. (and up to
a 39% discount) during the 6 month period to 2 April 2014;
-- the Disposal of the Company's entire Property Interests
provides the opportunity to realise an immediate cash
consideration, reducing the timeframe and overall risk of realising
value for each of the Projects on an individual asset basis;
-- should the Disposal not proceed the Company would continue to
develop the Property Interests in conjunction with Unitech and its
affiliates; which is expected to be completed as quickly as tenant
demand permits. Since the Company's original admission to AIM in
December 2006, in aggregate 34 per cent. of the estimated lettable
area of the Property Interests have been leased or are subject to
pre-lease commitments and approximately 41 per cent. of the
Property Interests are operational or ready for fitouts.
Accordingly, the development risks associated with the Projects and
potential uncertainties resulting from the third party's
acquisition of Unitech's interests in four of the Projects, would
be eliminated for the Company by a complete portfolio disposal;
-- the aggregate remaining estimated construction costs for the
development of the Company's Projects at 31 March 2014 is
approximately GBP272 million. Financing such construction costs
will require the Company to seek additional funding. There can be
no certainty that such funding will be made available for the
Projects or that the borrowing facilities will be available on
terms favourable to the Company. The disposal of the Company's
entire Property Interests in a single transaction will therefore
reduce the risks to Shareholders of possible difficulties in
securing future development funding which could have an adverse
effect on the value of the Property Interests;
-- the Disposal is subject to limited conditionality and limited
warranties including capacity and title to the shares of Candor and
customary protections in respect of the period between 31 March
2014 and Completion (and no other warranties related to the
business of the underlying Projects). From the Company's
perspective, the contractual arrangements are likely to be more
favourable than would be the case if the Company pursued
alternative disposal strategies involving the sale of individual
Projects.
Accordingly, taking into account the above benefits, the
Independent Directors believe that the Disposal is in the best
interests of Shareholders and through the realisation of
substantial cash proceeds will facilitate a return of capital to
Shareholders.
5. Proposals for the future of the Company and return of capital
Following Completion of the Disposal, the Board of Directors of
the Company, in consultation with Shareholders, will seek advice on
the most appropriate method to return the resulting net cash
resources of the Company to Shareholders in a tax efficient manner.
It is currently expected that the first return of capital to
Shareholders will be within a period of 3 months from Completion.
Further details will be provided to Shareholders in due course.
The consideration payable at Completion of approximately
GBP205.9 million is subject to adjustment as set out in paragraph 2
above. The consideration will be reduced, inter alia, to the extent
that certain fixed term deposits which have been made in the name
of a Project Company, with two Indian financial institutions have
not been repaid by Completion. Currently, there is no certainty as
to the repayment dates of such deposits. The Company's beneficial
interest in the deposits referred to above and outstanding at the
date of this document amounts to approximately GBP14.7 million. In
the event that all or part of such deposits have not been repaid
prior to or at Completion and give rise to an adjustment of the
consideration payable by Brookfield, the Project Companies' rights
to receive repayment of 60 per cent. of such outstanding deposits
will be assigned (subject to necessary approvals) or any recovery
will be repaid to the Company and any subsequent repayment to, or
recovery by, the Company of the deposits is anticipated to be
returned to Shareholders.
The Board has been advised that the sale of Candor is not
expected to result in a tax liability for UCP in either India or
Mauritius. The Company is, however, required to file a tax return
in India after the end of the current tax year on 31 March 2015 and
the Board has decided, conservatively, to retain an amount of GBP4
million until such tax return has been filed. In light of the
advice that no tax liability is expected to result from the
Disposal, it is therefore anticipated that this sum should
ultimately be able to be returned to Shareholders.
On the basis of the following assumptions (the
"Assumptions"):
(i) the consideration payable by the Purchaser at Completion amounts to GBP205.9 million;
(ii) there is no adjustment of the consideration to reflect
outstanding fixed term deposits or, in the event an adjustment is
applied, the Company has subsequently recovered its relevant
proportion of the amounts due in respect of such deposits;
(iii) there are no claims by the Purchaser against the Company
for breach of warranties or undertakings under the Disposal
Agreement;
(iv) transaction costs and the expected running costs of the
Company in the period prior to completion of the return of capital
amount to GBP4 million in aggregate; and
(v) an amount of GBP4 million is retained by the Company until
after the tax return has been filed in India and no liability in
respect of Indian taxation arises;
the Company will have cash resources to make capital returns to
Shareholders of approximately GBP201.9 million in aggregate,
equivalent to approximately 56 pence per Ordinary Share.
The ability of the Company to make capital returns of up to
approximately 56 pence per Ordinary Share and the timing of such
return is not currently known with certainty and will be subject to
factors which may include but not be limited to:
- Shareholders voting in favour of the Resolutions at the
forthcoming Extraordinary General Meeting;
- The timing for satisfaction of all the conditions of the Disposal Agreement;
- Shareholders approving the structure to enable returns of
capital (to be proposed in due course);
- The amount of deductions (if any) from the consideration
payable at Completion pursuant to the terms of the Disposal
Agreement;
- Any claims by the Purchaser under the limited warranties or
Company's undertakings in the Disposal Agreement
- Any taxation liability resulting from the Disposal; and
- Any differences between actual costs and the estimated running
expenses of the Company until the final return of capital to
Shareholders.
6. Investing policy following the Disposal
If the Disposal is approved by Shareholders and the Company
completes the disposal of Candor, the Company's investing
activities will cease and the Existing Investing Policy of the
Company (as included at Appendix I to this document) will no longer
be appropriate. Accordingly, subject to Shareholder approval of the
Resolutions, the Company will adopt the following New Investing
Policy:
New Investing Policy
"The Company's Investing Policy is to return capital to
Shareholders following completion of the sale of Candor. The return
of capital, amounting to almost all of the expected net proceeds
from the sale of Candor, is expected to be effected by way of a
Shareholder distribution which will be subject to the formal
approval by Shareholders of the Company at a future extraordinary
general meeting. Such meeting is expected to be held within 3
months of Completion. Thereafter, the Company will conduct its
affairs to comply with post Completion obligations relating to the
Disposal and at the end of such period any residual funds will be
returned to Shareholders by way of a members' voluntary winding up
or other restructuring, subject to approval by Shareholders. On
adoption of the New Investing Policy, the Company shall not make
any new investments."
In accordance with paragraph 5.6 of the AIM Note for Investing
Companies, which forms part of the AIM Rules, where a company
quoted on AIM disposes of all, or substantially all, of its assets,
it has a period of 12 months from the date of the disposal to
implement its investing policy. If this is not fulfilled, the
company's shares will be suspended from trading on AIM.
Accordingly, if UCP has not implemented the New Investing Policy
within 12 months of Completion, the Ordinary Shares will be
suspended from trading on AIM.
7. Related party transaction
As an associate of the Purchaser currently holds approximately
16.7 per cent. of the Ordinary Shares of the Company and is
therefore a substantial shareholder (as defined in the AIM Rules),
the Disposal is classified as a related party transaction pursuant
to the AIM Rule 13. Accordingly, the Independent Directors confirm,
having consulted with Westhouse Securities, that the proposed terms
of the Disposal are fair and reasonable insofar as Shareholders are
concerned.
8. Extraordinary General Meeting
Shareholders will find at the end of this document a notice
convening an Extraordinary General Meeting of the Company, to be
held at IOMA House, Hope Street, Douglas, Isle of Man IM1 1AP at
11:30 a.m. on 27 June 2014.
At the Extraordinary General Meeting, the Resolutions will be
proposed to approve (a) the sale of the entire issued share capital
of Candor to the Purchaser and (b) the Company's New Investing
Policy.
9. Action to be taken
Shareholders will find enclosed with this document a Form of
Proxy for use at the Extraordinary General Meeting.
Whether or not you intend to be present at the EGM, you are
requested to complete and return the Form of Proxy so as to reach
the Company's registered office at IOMA House, Hope Street,
Douglas, Isle of Man IM1 1AP, either by personal delivery, post,
facsimile transmission (+44 (0)1624 681392) or email
(grainned@iomagroup.co.im), as soon as possible and, in any event,
not later than 11:30 a.m. on 25 June 2014, being not less than 48
hours before the time appointed for the EGM.
Completion and return of the Form of Proxy will not, however,
prevent you from attending the Extraordinary General Meeting and
voting in person if you should wish to do so.
10. Recommendation
The Independent Directors, taking into account the factors set
out in this letter, believe that the Disposal and the amendment to
the Company's Investing Policy are in the best interests of the
Company and its Shareholders as a whole. Accordingly, the
Independent Directors unanimously recommend that Shareholders vote
in favour of the Resolutions at the Extraordinary General Meeting,
as they intend to do in respect of their own beneficial
shareholdings.
Shareholders who have any questions with respect to the contents
of this document may contact the Company Secretary, Philip Scales,
on +44 (0)1624 681250.
Yours faithfully,
Donald Lake
Chairman"
This information is provided by RNS
The company news service from the London Stock Exchange
END
DISZFLBFZQFZBBQ
Ucp (LSE:UCP)
過去 株価チャート
から 5 2024 まで 6 2024
Ucp (LSE:UCP)
過去 株価チャート
から 6 2023 まで 6 2024