17th Apr 2007 07:02
Speymill Deutsche Immobilien Co PLC17 April 2007 17 April 2007Speymill Deutsche Immobilien Company plc ("the Company") Completion of Placing The Company is pleased to announce the completion of a proposed placing of 250million C shares at €1 per share, raising gross proceeds of €250 million,subject to the passing of resolutions at the Extraordinary General Meeting ofthe Company. The Extraordinary General Meeting is to be held on 9 May 2007 andthe C Shares are expected to commence trading on 10 May 2007. The admissiondocument relating to the Placing is being sent to the Company's ordinaryshareholders today, and will be available for inspection at the offices ofStephenson Harwood, One, St. Paul's Churchyard, London, EC4M 8SH for one month. The following is extracted from the Letter from the Chairman of the Companycontained in the admission document published on 17 April 2007: "Dear Ordinary Shareholder Proposed Placing of up to 250 million C Shares of 50p each at €1 per share,redenomination of the Company's share capital into Euros, adoption of newarticles of association and further changes to the articles of association Introduction Your Board announced today proposals to significantly increase the size of theCompany through the issue of C Shares via a placing of such shares withinvestors. The Board is proposing to raise up to €250 million (before expenses)through the Placing. In addition, the Board is proposing to redenominate theCompany's share capital into Euros. The purpose of this document is to provide you with details of the Placing whichis conditional, inter alia, on the approval by Ordinary Shareholders of theresolutions to be proposed at an extraordinary general meeting of the Companywhich has been convened for 9 May 2007. It is also to provide you with detailsof the proposed redenomination of the share capital. The notice convening theEGM is appended to this document. Your Board is recommending that OrdinaryShareholders vote in favour of the resolutions to be proposed at the EGM. Background Speymill Deutsche Immobilien Company plc was incorporated on 1 March 2006 in theIsle of Man and was established to invest in the German property market andpredominantly in the residential sector. The Company's objective is to provideShareholders with an attractive level of income together with the prospect forlong-term capital growth. Shortly after incorporation, the Company issued 170million Ordinary Shares, raising funds of £170 million, and these OrdinaryShares were admitted to trading on AIM on 17 March 2006. As at 15 March 2007 the Company had notarised (i.e. committed to purchase)residential properties in various German cities for a cumulative cashconsideration of €902.4 million. The expected net rental income from theseproperties is €65.8 million per annum. The blended net initial property yield ofthe Current Portfolio at notarisation was 7.1 per cent. but this is expected torise once the Company has managed the properties for at least 12 months. After consideration of the Company's strategy and performance to date, the Boardhas decided that it is an appropriate time for the Company to raise additionalcapital to enable further investment in line with the Company's statedinvestment objective. The Company therefore now proposes to issue up to 250 million C Shares, whichwill be convertible into Ordinary Shares in accordance with the terms outlinedin Part IX of this document. The Company proposes to raise up to €250 million(before expenses) pursuant to the Placing through the issue of Sterlingdenominated C Shares which will be admitted to trading on AIM. The C Shares The net proceeds of the Placing will be accounted for as a separate cash assetuntil the earlier of the time by which at least 85 per cent. of the net proceedsof the Placing have been invested or two years from the date of Admission. Atthis point the C Shares will convert into Ordinary Shares in accordance with theconversion terms set out in of Part IX of this document. The issue of further equity in the form of C Shares is designed to overcome thepotential disadvantages which could arise out of a conventional issue of furtherOrdinary Shares for cash. In particular: * holders of the Ordinary Shares will not suffer the effect on performance which they otherwise might as a consequence of the Company holding substantial amounts of uninvested cash; * holders of the Ordinary Shares will not bear the expenses associated with the Placing, once unconditional, which will be borne by the assets attributable to the C Shares; and * the basis upon which the C Shares will convert into Ordinary Shares is such that the number of Ordinary Shares to which holders of C Shares will become entitled will reflect the net asset value of the C Shares at Conversion compared to the net asset value of the Ordinary Shares at that time. The Company will, once the proceeds of the Placing have been invested (andcompletion and valuation have occurred), hold property which is expected to havea purchase price of approximately €2 billion. In addition, on the assumptionthat the Placing is fully subscribed, the Company is expected, on Admission, tohave an aggregate market capitalisation of approximately €565 million. This willresult in the Company being one of the largest quoted property companiesinvesting primarily in German residential property. The Board believes that the increased size of the ordinary share capital of theCompany following Conversion will have a number of benefits to Shareholders,including increasing the liquidity of the Ordinary Shares and reducing theCompany's fixed operating costs as a percentage of Shareholders' funds. Following Conversion, the Board will ultimately be looking to have all of theCompany's shares admitted to trading on a main market. The Manager has agreed that on Conversion, its aggregate management fees(relating to both the C Share Portfolio and the Current Portfolio) will bereduced to a fixed fee equal to 0.65 per cent. per annum of the Gross Assets.The Manager's fixed fee in relation to the C Share Portfolio prior to Conversionwill be 0.65 per cent. per annum of the Gross Assets of the C Share Portfolio. Whilst the methodology for the calculation of the Manager's performance fee willremain the same in respect of the Current Portfolio, the Company and the Managerhave agreed that the requirement that dividends in aggregate of not less than anannualised amount of 6 per cent. per annum on the Placing Price be declaredbefore a performance fee becomes payable will not apply to the C Share Portfolioand will fall away completely with effect from 1 July 2009. It is expected that, subject to the Resolutions being approved at the EGM,Admission of the C Shares will become effective and dealings in the C Shareswill commence on 10 May 2007. Extraordinary General Meeting dealing with the Placing, reduction of sharepremium account and changes to the Articles To enable the Placing to proceed, it is necessary to create the C Shares and toadopt new articles of association. Whilst the proposed new articles ofassociation will incorporate the rights of the C Shares, it is also proposed, atthe same time, to make two further amendments to the articles of association. In light of the current uncertainty surrounding the definition of an offshorefund and the potential taxation consequences of the Company being deemed as suchand, taking into account the large number of assets it is proposed that theCompany will own following the Placing, it is proposed to delete the requirementunder the current articles of association of the Company that at the generalmeeting of the Company to be held in 2012, a continuation vote is put toshareholders. In the event that the articles are changed to incorporate thisdeletion, the Company will not have any continuation vote and there can be noexpectation on the part of shareholders as to when the Company may wind up inthe future. It is also proposed to increase the aggregate annual amount of fees payable tothe Directors from £200,000 to £400,000, so as to provide flexibility for thefuture with regards to annual payments to Directors. Details of proposed changesto the level of Directors' fees are set out in paragraph 4.1 of Part XIII ofthis document. At the same time it is proposed to cancel the share premium account arising byvirtue of the Placing so as to provide the Company with a distributable reserveof the amount so cancelled. Such reserve may be used by the Company for thepurposes of making distributions to shareholders. Accordingly, an extraordinarygeneral meeting of the Company is being convened for 9 May 2007 at 11 a.m. atwhich special resolutions will be proposed to: (i) create the C Shares; (ii) adopt new articles of association to include the rights of the C Shares aswell as to increase the aggregate amount which may be paid to the Directors asfees and to increase the period until the first continuation vote is due to beheld; and (iii) cancel the share premium account of the Company arising by virtue of thePlacing. The EGM will also consider resolutions relating to the redenomination of theCompany's capital which are summarised below and in Part VIII of this document. The EGM will be held at the offices of Anglo Irish Bank Corporation (I.O.M.)P.L.C., Jubilee Buildings, Victoria Street, Douglas, Isle of Man, IM1 2SH. Thenotice convening the EGM is set out at the end of this document. Redenomination of share capital into Euros As mentioned above, your Board has today convened an EGM to consider, amongstother things, resolutions designed to redenominate all of the Company'sauthorised and issued share capital into Euros. Your Board believes that the Company should report its results in Euros tobetter reflect the fact that substantially all of its operations are undertakenin Euros. The redenomination is also subject to the approval of the Court and isexpected to become effective within two months of the EGM. Dealings in the newEuro denominated shares (comprising the Euro Ordinary Shares and any Euro CShares arising from the redenomination of any C Shares issued pursuant to thePlacing) should therefore commence at 8.00 a.m. on the business day followingthe date on which the redenomination becomes effective. The redenomination, which is not conditional on the Placing, will be effected bythe cancellation of all of the Ordinary Shares and C Shares (both denominated insterling) and the issue in their place of new Euro Shares on the followingbasis: For each Existing Ordinary Share One new Euro Ordinary Share For each Existing C Share One new Euro C Share As a result of the above, the Company anticipates that its operational andreporting currency will change to Euros. In addition, future dividends will bedeclared and paid in Euros. Further details of the proposed redenomination canbe found in Part VIII of this document. Action to be taken You will find appended to this document a Form of Proxy, for use in connectionwith the EGM. Whether or not you intend to be present at the EGM, you are askedto complete and return the Form of Proxy in accordance with the instructionsprinted thereon so as to be received by Anglo Irish Fund Services Limited,Jubilee Buildings, Victoria Street, Douglas, Isle of Man, IM1 2SH, as soon aspossible but in any event not later than 11 a.m. on 7 May 2007. Completion andreturn of the Form of Proxy will not preclude you from attending and voting atthe meeting in person should you so wish. Recommendation and voting intentions The Directors consider that the Placing and the Resolutions to be proposed atthe EGM are in the best interests of Ordinary Shareholders. Accordingly, theBoard unanimously recommends all Ordinary Shareholders to vote in favour of theResolutions. The Directors intend to vote in favour of the Resolutions in respect of theirown beneficial holdings, which amount in aggregate to 20,000 Ordinary Shares,representing approximately 0.01 per cent. of the Ordinary Shares in issue. In addition, each of Raymond Apsey, Derek Butler and Leonard O'Brien have agreedto subscribe for 36,750, 29,500 and 25,000 C Shares respectively, at the PlacingPrice, in accordance with the terms of the Placing. Yours faithfully Raymond ApseyNon-executive Chairman" The following definitions are used in the extract from the admission documentabove. References within the definitions below to "this document" relate to theadmission document published by the Company on 17 April 2007. DEFINITIONS "•" or "Euro" the common currency of the Euro area "£" or pounds sterling, the lawful currency from time to time of the"sterling" United Kingdom "Act" the Isle of Man Companies Act 1931 (as amended) "Administration the agreement dated 10 March 2006 between the Company and theAgreement" Administrator as described in paragraph 7.5 of Part XIII of this document "Administrator" Anglo Irish Fund Services Limited or such other administrator as may be appointed by the Company from time to time "Admission" the admission of the C Shares, to be issued pursuant to the Placing, to trading on AIM becoming effective in accordance with the AIM Rules "AIM" the AIM market of the London Stock Exchange "AIM Rules" the AIM Rules for Companies published by the London Stock Exchange "Articles" the articles of association of the Company, a summary of which is set out in paragraph 5 of Part XIII of this document "blended net contractual net rental income at notarisation, divided byinitial purchase price plus estimated refurbishment costsproperty yield" "Board" or the board of directors of the Company including a duly"Directors" constituted committee thereof "C Share the portfolio of assets and liabilities attributable to thePortfolio" C Shares "C Shareholders" holders of C Shares "C Shares" conversion shares of 50p each in the Company subsequently to be converted into Ordinary Shares, having the rights set out in the Articles and summarised in Part XIII of this document "Company" Speymill Deutsche Immobilien Company plc "Conversion" has the meaning set out in Part IX of this document "Conversion has the meaning set out in Part IX of this documentRatio" "Conversion has the meaning set out in Part IX of this documentTime" "CREST" the relevant system in respect of which CRESTCo Limited is the operator in accordance with which securities may be held and transferred in uncertificated form "CRESTCo" CRESTCo Limited, a company incorporated under the laws of England and Wales and the operator of CREST "CREST the Uncertificated Securities Regulations 2005 in the Isle ofRegulations" Man "Current the portfolio of assets and liabilities attributable to thePortfolio" Ordinary Shares prior to the conversion of the C Shares "Custodian" Anglo Irish Bank Corporation (I.O.M.) P.L.C. or such other custodian as may be appointed by the Company from time to time "Custodian the agreement dated 10 March 2006 between the Company and theAgreement" Custodian as described in paragraph 7.6 of Part XIII of this document "DAX" Deutsche Aktienindex "Effective Date" the date on which the cancellation of the Company's share capital in connection with its redenomination into Euros takes effect in accordance with the Act "Effective Time" the time on the Effective Date at which the Court order confirming the reduction of capital in connection with the redenomination is registered by the Isle of Man Financial Supervision Commission "Euro C Shares" as defined in resolution 4 in the Notice of EGM which is set out on pages 83 to 85 of this document "Euro Ordinary as defined in resolution 4 in the Notice of EGM which is setShares" out on pages 83 to 85 of this document "Euro Shares" together the Euro Ordinary Shares and the Euro C Shares "Existing C as defined in resolution 4 in the Notice of EGM which is setShares" out on pages 83 to 85 of this document "Existing as defined in resolution 4 in the Notice of EGM which is setOrdinary Shares" out on pages 83 to 85 of this document "Extraordinary the extraordinary general meeting of the Company convened for General Meeting" 11 a.m. on 9 May or any adjournment thereof, a notice of whichor "EGM" is set out on pages 83 to 85 of this document "Financial the United Kingdom Financial Services AuthorityServicesAuthority" or"FSA" "Form of Proxy" the Form of Proxy appended to Notice of EGM "FSMA" the Financial Services and Markets Act 2000 of the United Kingdom "Gross Assets" the aggregate value of the assets of the Company on a consolidated basis including net distributable and undistributed income less current liabilities of the Company on a consolidated basis but excluding any proportion of the principal monies borrowed for investments by the Group that are treated as current liabilities "Group" the Company and its subsidiaries from time to time "Initial the admission to trading on AIM of 170 million ordinary sharesAdmission" on 17 March 2006 "Initial the placing by Fairfax of 170 million ordinary shares at aPlacing" price of £1 per share, which were admitted to trading on AIM on 17 March 2006 "Initial the placing price on the Initial Placing of £1 per OrdinaryPlacing SharePrice" "Investment GOAL Service GmbHAdviser" or"GOAL" "Investment the agreement dated 10 March 2006 between the Company, theAdvisory Manager and the Investment Adviser as described in paragraphAgreement" 7.2 of Part XIII of this document "Law" the Isle of Man Companies Acts 1931 to 2004 and subordinate legislation made thereunder and every modification or re-enactment thereof for the time being in force "London Stock London Stock Exchange plcExchange" "Management the agreement dated 10 March 2006 between the Company and theAgreement" Manager as described in paragraph 7.1 of Part XIII of this document "Manager" or Speymill Property Managers Limited"Speymill" "Memorandum" the memorandum of association of the Company "net rental rental income, net of service charges, any heating charges, andincome" any other charges that may be applicable "Nominated Smith & Williamson Corporate Finance LimitedAdviser" or"Smith &Williamson" "Nominated the agreement dated 10 March 2006 between the Company and theAdviser Nominated Adviser as described in paragraph 7.7 of Part XIII ofAgreement" this document "Notice of EGM" the notice of EGM which is set out on pages 83 to 85 of this document "Official List" the Official List of the UK Listing Authority "Ordinary holders of Ordinary SharesShareholders" "Ordinary ordinary shares of 10p each in the capital of the CompanyShares" "Placing" the conditional placing by Fairfax on behalf of the Company of up to 250 million C Shares at €1 per share "Placing Agent" Fairfax I.S. PLCor "Fairfax" or"Broker" "Placing the agreement dated 16 April 2007 between the Company, theAgreement" Manager, Smith & Williamson and Fairfax, relating to the Placing, as described in paragraph 7.4 of Part XIII of this document "Placing Price" €1 per C Share "Placing Shares" up to 250 million C Shares of 50p each "Record Time" the time which is ten minutes prior to the Effective Time "Resolutions" the resolutions set out in the Notice of EGM "RIS" a regulatory information service approved by the FSA "Shares" C Shares and Ordinary Shares "Shareholders" C Shareholders and Ordinary Shareholders "SPV" special purpose vehicle "Supplementary the agreement between the Company and the Investment AdviserManagement dated 16 April 2007 amending certain provisions of theAgreement" Investment Advisory Agreement, as described in paragraph 7.2 of this document "Supplementary the agreement between the Company and the Manager dated 16Management April 2007 amending certain provisions of the ManagementAgreement" Agreement, as described in paragraph 7.1 of this document "US" or "United United States of America, its territories and possessions, anyStates" state of the United States and the District of Columbia "UK" or "United the United Kingdom of Great Britain and Northern IrelandKingdom" This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Sdic Power.