1st Dec 2009 15:51
Metro Baltic Horizons PLC
(the 'Company')
Statement of Investing Policy
Metro Baltic Horizons PLC, the AIM listed fund investing in property development and income-producing opportunities principally in the cities of St Petersburg (Russia), Tallinn (Estonia) and Riga (Latvia), announces its investing policy pursuant to Rule 8 of the AIM Rules for Companies:
Investing Policy
The Company actively invests in property development and income-producing opportunities principally in the cities of St Petersburg (Russia), Tallinn (Estonia) and Riga (Latvia).
Investment objective and dividend policy
The stated investment objective of the Company is to provide shareholders with a high level of total returns. The Directors expect that the total return to investors will principally comprise capital growth, but with potential for dividends over the medium to long term. The Investment Manager will recommend property development opportunities to the Company and will seek to target development projects which can demonstrate an ability to generate a minimum IRR of 25% to the Company. As the Company is focused on property development, when a property development is completed the Directors will decide whether the property should be sold or held for investment purposes, based on the market conditions and the availability of other development opportunities for the Company at the time. Where a property is held for investment purposes the net rental income may be distributed by way of an annual dividend.
Investment strategy
The Company has a development capability rather than just a passive investment mandate focused on limited existing property stock in the target cities. The Company's principal focus is on prime office, residential and retail investment and development opportunities. The Company may also invest selectively in land acquisition and in joint ventures with other reputable developers. The Company expects to dispose of any completed residential developments but may keep any developed commercial properties as part of its portfolio and seek to maximise the cashflow yield of such properties and thereby further enhance shareholder returns. In these circumstances, the Investment Manager may seek to refinance any residual bank debt or similar facilities associated with such properties, with the objective of releasing the Company's original equity investment for further investment into other suitable projects.
The Investment Manager intends that upon acquisition, no single investment will represent more than 30% of the gross assets of the Company. However, in exceptional circumstances, the Company may make a single investment in excess of this gross asset threshold. The Company's preferred strategy will be to be the sole investor in any project in which it invests but it may also invest as part of a syndicate, partnership or other investor grouping, subject to having a majority of voting shares in each case. In exceptional circumstances, the Investment Manager may recommend that the Company acquire a minority stake in a suitable property or development opportunity provided that the Company also receives appropriate voting and other protections in respect of key decisions relating to such investment.
The Company intends to use special purpose vehicles (''SPVs'') to hold its investments. The Company may use a single SPV for an individual property but, if it deems it appropriate, may choose to use a single SPV to hold multiple properties. SPVs will be incorporated in such jurisdictions as the Company deems appropriate taking into account investment management risks and endeavoring to minimise the overall tax liabilities of the Company and any of its subsidiaries. The Company may own all or a portion of the shares of these SPVs. The Company does not intend to invest in other collective investment companies.
Borrowing
In order to maximise shareholders' returns, the Directors believe that it is in the interests of the Company to borrow funds from commercial banks to part-finance the acquisition and/or development of suitable property investment opportunities. The Directors currently intend that the maximum level of borrowings across all properties will not exceed 70% of the aggregate value of all of the Company's property investments
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Metro Group
James Kenny [email protected]
Mart Habakuk [email protected]
www.metrocapital.ee
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Fairfax I.S. PLC (Nominated Adviser Broker)
and James King/Andrew Cox
Tel: +44 (0) 20 7598 5368
www.fairfaxplc.com
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