23rd May 2006 10:35
Derwent Valley Holdings PLC23 May 2006 23 May 2006 Derwent Valley Holdings plc ("Derwent Valley" or "the Group") AGM STATEMENT Derwent Valley is a commercial property investor focused on Central London. At today's Annual General Meeting, John Ivey, Chairman, made the followingcomments: "The chairman's statement included in the 2005 report and accounts drewshareholders' attention to the fact that the proposed legislation could havedeterred much of the quoted property sector from converting to real estateinvestment trusts (REITs). Subsequent to the statement, a number of importantimprovements and clarifications were made within the March budget that make thisproposed new form of investment vehicle more appealing to Derwent Valley thanwas envisaged at the beginning of the year. "The conversion charge will be equivalent to 2% of the value of the investmentproperties transferred into a REIT. Based on a year-end portfolio value of £1billion, this would amount to approximately £20 million, which comparesfavourably to the £92 million provided in the 2005 accounts for the potentialtax payable on future capital gains. If conversion to a REIT took place, thistax provision would fall away and net asset value would increase by 135p pershare. "Following the budget proposals, REITs have been welcomed as an investmentvehicle and your directors feel that a focussed company such as Derwent Valley,which specialises in Central London real estate, would have considerable appealto REIT investors. "Whilst the Finance Bill progresses through its Parliamentary Committee stages,your directors and their advisers are considering the full implications of REITsfor your company. Whilst the rationale for conversion appears attractive, acommitment to convert cannot be made until the legislation is finalised and yourdirectors have ensured that the value generated for shareholders in the futureas a REIT will be no less than that envisaged under the current model." Enquiries: Derwent Valley Holdings plc 020 7659 3000 John Burns, Managing Director Financial Dynamics 020 7831 3113 Stephanie Highett/Dido Laurimore This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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