13th Apr 2006 13:13
Fyffes PLC13 April 2006 Stock Exchange Announcement Fyffes issues property demerger Circular and EGM notice Fyffes announces that a Circular to shareholders setting out details of theproposed demerger of the Group's property undertaking and the subscription byFyffes for shares in the new property company has been published and posted toshareholders today. The Circular includes notice of an Extraordinary General Meeting of the companyto take place at 10.00am on Tuesday, 9 May 2006 in the Westin Hotel, CollegeGreen, Dublin 2. Overview of the proposals On 15 December 2005, Fyffes announced its intention to establish a new,separately quoted property company to be owned 60% by Fyffes' shareholders and40% by Fyffes plc. The new property company is now to be named BlackrockInternational Land plc ("Blackrock"). Transfer of property undertaking Under the demerger proposal, Fyffes will transfer its property undertaking toBlackrock in exchange for a one-for-one issue of Blackrock shares to Fyffes'shareholders. A total of 30 properties, having a combined gross asset value of approximately€197 million, will be transferred. These properties, which have beenindependently valued, comprise 23 individual properties, seven wholly ownedproperty subsidiaries and Fyffes' interest in a joint venture comprising threejoint venture companies. Associated debt due to Fyffes of approximately €63million will also transfer. A deferred tax liability of approximately €10million will arise in Blackrock as a result of the demerger. Subscription for shares Following the proposed demerger and subject to certain conditions, Fyffesintends to subscribe approximately €83 million to acquire a 40% shareholding inBlackrock. These funds will be used to repay to Fyffes the €63 million debtassociated with the property undertaking transferred to Blackrock. Information on Blackrock (a) Objectives Blackrock's primary objective will be to build a substantial internationalproperty business with a clear focus on development opportunities, supported bya strong property investment portfolio. Its strategy will be to create valuefor shareholders through active and entrepreneurial management, risk-controlleddevelopment and opportunistic acquisitions of strategic land holdings andproperty investments. Managed by an experienced property team and having thecapacity to leverage its strong balance sheet to borrow funds for expansion, itwill have the capability to develop its assets and pursue new opportunities on asignificantly greater scale than if the property undertaking remained withinFyffes. (b) Board of Blackrock The board of Blackrock will initially comprise two executive directors, CarlMcCann (Chairman) and Robert Knox (Managing Director) and five non-executivedirectors, Philip Halpenny, Andrew Kelliher, Jerome Kennedy, Declan McCourt andAlan White. (c) Initial balance sheet of Blackrock On completion of the proposed demerger and subscription, Blackrock will haveproperty assets with a market value of approximately €197 million, cash ofapproximately €20 million and a deferred tax liability of approximately €10million. (d) Quotation of Blackrock shares It is intended that Blackrock shares will be admitted to trading on the IEXmarket of the Irish Stock Exchange and the AIM market of the London StockExchange. It is expected that Blackrock shares will commence trading on 15 May2006 and that share certificates will be posted to certified holders by 17 May2006. Implications of proposals for Fyffes' operations and balance sheet Of the properties transferred by Fyffes to Blackrock, 14 will be occupied byFyffes in the short to medium term under negotiated operating leases at marketrent. The related rental commitments (net of operating costs to be assumed byBlackrock) are not expected to significantly impact on Fyffes' adjusted earningsper share. The proposed demerger and subscription for equity in Blackrock will reduceFyffes' total net assets by approximately €118 million, including its net cashby €20 million. Following the demerger, Fyffes will retain properties with amarket value of approximately €61 million. Extraordinary General Meeting Because of the scale of these proposals, they constitute a Class 1 transactionwhich will require the approval of the company's shareholders. An EGM has beenscheduled to take place at 10.00am on Tuesday, 9 May 2006 in the Westin Hotel,College Green, Dublin 2. The Board considers the proposed bonus issue, demerger and share subscription tobe in the best interests of the company and of Fyffes' shareholders and isrecommending that shareholders vote in favour of the resolutions to be put tothe EGM on 9 May 2006. Document Availability Copies of the Circular have been submitted to the Irish Stock Exchange and theUK Listing Authority and are available for inspection at: Company Announcements Office Document Viewing Facility of the UK Listing AuthorityIrish Stock Exchange Financial Services Authority 28 Anglesea Street 25 The North Colonnade Dublin 2 Canary Wharf Ireland London E14 5HS United Kingdom A copy of the Circular is also available for inspection at the company'ssolicitors at: Arthur Cox Arthur Cox Arthur Cox Centre 29 Ludgate Hill Earlsfort Terrace London EC4M 7JE Dublin 2 United Kingdom Ireland A copy of the Circular will be available on the Fyffes website, www.fyffes.com. Fyffes plc 13 April 2006 For further information, please contact: Brian Bell or Andrew McLindon, Wilson Hartnell PR Tel: +353-1-669 0030 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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