TIDMCRF
RNS Number : 0696D
Ciref PLC
25 November 2009
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE
OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN OR ANY
JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL
Ciref plc ("Ciref" or the "Company" or the "Group")
PLACING TO RAISE GBP38 MILLION OF NEW CAPITAL IN CIREF PLC
WAIVER FROM PROVISIONS OF RULE 9.1 OF THE TAKEOVER CODE
RELATED PARTY TRANSACTION
PROPOSED CHANGE OF NAME OF CIREF PLC
HIGHLIGHTS
* Proposed Placing of 84,444,444 new shares at 45 pence per share to raise GBP38.0
million (approximately GBP36.8 million net of expenses).
* The net proceeds will be used to:
* Enable Ciref to conclude the proposed restructuring arrangement with Aviva,
funder to a number of Shopping Centre Schemes formerly under joint venture
arrangements with the Modus Group (now in administration) and other third party
investors, whereby Ciref will acquire majority control of certain Shopping
Centre Schemes and simultaneously restructure the associated Aviva debt;
* Acquire 204,272,000 Wichford PLC shares (representing c. 19.2 per cent. of
Wichford PLC's issued share capital), currently owned by Redefine;
* Reduce debt on those Ciref investment properties that are at or near banking
covenant limits;
* Reduce debt on those Ciref investment properties where facilities are due to be
renewed at lower loan to value ratios;
* Provide general working capital; and
* Take advantage of current valuations prevalent in the market place by making
selected acquisitions and/or investments consistent with Ciref's strategy.
* Should the Placing proceed, Redefine Income Fund Limited will, upon Admission
occurring, own approximately 55.46 per cent. of the issued Ordinary Shares of
Ciref at that time. Shareholder approval is required for the waiver of the
provisions of Rule 9.1 of the Takeover Code in respect of Redefine's
shareholding in Ciref passing through 30 per cent.
* Proposed name change to Redefine International plc, to reflect and recognise
Redefine's increased stake in the Company and its ongoing support for the Group.
* Admission of the Shares to trading on the London Stock Exchange is expected to
take place on 21 December 2009.
* The Placing is subject to approval by the Company's Shareholders at a general
meeting expected to be held on 18 December 2009.
Gavin Tipper, Chairman, commented:
"We are delighted to have secured additional capital through the Placing. This
will enable the Company to focus on protecting its existing assets and, where
appropriate, to take advantage of current market valuations for opportunistic
acquisitions consistent with our strategy.
The Board very much welcomes the proposed increased investment by Redefine in
the Company and looks forward to its continued support in addressing the current
difficult market conditions and positioning the Company to take advantage of
potential long-term growth opportunities."
For further information, please contact:
+------------------------------------+------------------------------------+
| Ciref Plc | + 27 (0)21 683 3829 |
| Gavin Tipper, Chairman | |
| | |
+------------------------------------+------------------------------------+
| Powerscourt Media | +44 (0)207 250 1446 |
| Matthew Fletcher/Karen Le Cannu | |
| | |
+------------------------------------+------------------------------------+
| Singer Capital Markets Limited | +44 (0)203 205 7500 |
| Nicholas How / Roger Clarke | |
| | |
+------------------------------------+------------------------------------+
Singer Capital Markets Limited, which is authorised and regulated by the
Financial Services Authority and is a member of the London Stock Exchange, is
acting exclusively for the Company and no one else in connection with the
Proposals. Singer Capital Markets Limited will not regard any other person as
its customer or be responsible to any other person for providing the protections
afforded to customers of Singer Capital Markets Limited nor for providing advice
in relation to the transactions and arrangements detailed in this announcement
for which the Company and the Directors are solely responsible. The
responsibilities of Singer Capital Markets Limited as the Company's nominated
adviser and broker for the purposes of the AIM Rules are owed solely to the
London Stock Exchange and are not owed to the Company or any Director or to any
other person in respect of his decision to acquire Ordinary Shares in reliance
on any part of this announcement. Singer Capital Markets Limited is not making
any representation or warranty, express or implied, as to the contents of this
announcement and accordingly, without limiting the statutory rights of any
recipient of this announcement, no liability is accepted by it for the accuracy
of any information or opinions contained in this announcement or for the
omission of any material information for which it is not responsible.
This announcement does not constitute a prospectus for the purposes of the
Prospectus Rules and has not been, and will not be, approved by or filed with
the FSA.
Application will be made to the London Stock Exchange for the Placing Shares to
be admitted to trading on the AIM market of the London Stock Exchange, and
dealings are expected to commence on 21 December 2009.AIM is a market designed
for emerging or smaller companies to which a higher investment risk tends to be
attached than to larger or more established companies. AIM securities are not
admitted to the Official List of the United Kingdom Listing Authority. A
prospective investor should be aware of the risks in investing in such companies
and should make the decision to invest only after careful consideration and, if
appropriate, consultation with a financial adviser. Each AIM company is required
pursuant to the AIM Rules for Companies to have a nominated adviser. The London
Stock Exchange has not itself examined or approved the contents of this
announcement
This announcement includes statements that are, or may be deemed to be, "forward
looking statements". These forward looking statements can be identified by the
use of forward looking terminology, including the terms "believes", "estimates",
"plans", "anticipates", "targets", "aims", "continues", "projects", "assumes",
"expects", "intends", "may", "will", "would" or "should", or in each case, their
negative or other variations or comparable terminology. These forward looking
statements include all matters that are not historical facts.
They appear in a number of places throughout this announcement and include
statements regarding the Directors' and the Company's and the Group's
intentions, beliefs or current expectations concerning, among other things,
the Group's result of operations, financial condition, prospects, growth
strategies and the industry in which the Group operates. By their nature,
forward looking statements involve risk and uncertainty because they relate to
future events and circumstances. A number of factors could cause actual results
and developments to differ materially from those expressed or implied by the
forward looking statements, including without limitation: conditions in
the markets, market position of the Group, earnings, financial position, cash
flows, return on capital, anticipated investments and capital expenditures,
changing business or other market conditions and general economic conditions.
These and other factors could adversely affect the outcome and financial effects
of the plans and events described in this announcement.
The forward looking statements in this announcement speak only as of the date of
this announcement. Other than in accordance with its legal or regulatory
obligations (including under the AIM Rules), neither the Company nor Singer
Capital Markets Limited undertake any obligation to update or revise publicly
any forward looking statement, whether as a result of new information, future
events or otherwise.
Without limitation, the contents of the websites of the Group do not form part
of this announcement.
Important notice
This Announcement is for information only and does not constitute or form part
of any offer or invitation to issue, acquire or dispose of any securities or
investment advice in any jurisdiction.
Neither the content of Ciref's website nor any website accessible by hyperlinks
on Ciref's website is incorporated in, or forms part of, this announcement.
This Announcement is not for release, publication or distribution, directly or
indirectly, in or into the United States, Australia, Canada, Japan or any other
jurisdiction into which the same would be unlawful.
This Announcement does not contain or constitute an offer of, or the
solicitation of an offer to buy or subscribe for, the New Ordinary Shares or any
other securities to any person in Australia, Canada, Japan, or the United States
or in any jurisdiction to whom or in which such offer or solicitation is
unlawful. Subject to certain exceptions, the securities referred to herein may
not be offered or sold in Australia, Canada or Japan or to, or for the account
or benefit of, any national, resident or citizen of Australia, Canada or Japan.
The offer and sale of the securities referred to herein has not been and will
not be registered under the US Securities Act or under the applicable securities
laws of Australia, Canada or Japan. The availability of the Placing to persons
not resident in the United Kingdom may be affected by the laws of the relevant
jurisdictions. Such persons should inform themselves about and observe any
application requirements.
The New Ordinary Shares have not been and will not be registered under the US
Securities Act or under the securities laws of any state or other jurisdiction
of the United States or under any securities laws of Australia, Canada or Japan
or any other jurisdiction where to do so would be unlawful and may not be
offered, sold, taken up, exercised, resold, renounced, transferred or delivered,
directly or indirectly, within the United States, or within any of Australia,
Canada or Japan or any other jurisdiction where to do so would be unlawful.
The distribution of this Announcement and the offering of the New Ordinary
Shares in jurisdictions other than the United Kingdom may be restricted by law.
No action has been taken by the Company or Singer Capital Markets that would
permit an offering of such shares or possession or distribution of this
Announcement or any other offering or publicity material relating to such shares
in any jurisdiction where action for that purpose is required. Persons into
whose possession this Announcement comes are required by the Company and Singer
Capital Markets to inform themselves about, and to observe, any such
restrictions. Any failure to comply with these restrictions may constitute a
violation of the securities laws of any such jurisdiction.
This Announcement has been issued by and is the sole responsibility of the
Company. No representation or warranty, express or implied is, or will be made
as to, or in relation to, and no responsibility or liability is, or will be,
accepted by Singer Capital Markets or by any of their affiliates or agents as
to, or in relation to, the accuracy or completeness of this Announcement or any
other written or oral information made available to or publicly available to any
interested party or its advisers, and any liability therefore is expressly
disclaimed.
This summary should be read in conjunction with the full text of the
announcement.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE
OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN OR ANY
JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL
Introduction
The Board of Ciref announces details of a proposed placing of new Ciref Shares
to raise GBP38 million of new capital (before expenses). The net proceeds of the
Placing will be used to:
* Enable Ciref to conclude the proposed restructuring arrangement with Aviva,
funder to a number of Shopping Centre Schemes formerly under joint venture
arrangements with the Modus Group (now in administration) and other third party
investors, whereby Ciref will acquire majority control of certain Shopping
Centre Schemes and simultaneously restructure the associated Aviva debt;
* Acquire 204,272,000 Wichford PLC shares (representing c. 19.2 per cent. of
Wichford PLC's issued share capital), currently owned by Redefine;
* Reduce debt on those Ciref investment properties that are at or near banking
covenant limits; - Provide general working capital; and
* Take advantage of current valuations prevalent in the market place, in respect
of physical as well as listed property investment opportunities, by making
selected acquisitions and/or investments consistent with Ciref's strategy.
Should the Placing proceed, Redefine will, upon Admission occurring, own
approximately 55.46 per cent. of the issued Ordinary Shares of Ciref at that
time. Accordingly, the Board believes it would then be appropriate for the
Company to change its name to Redefine International plc, to reflect and
recognise Redefine's increased stake in the Company and its ongoing support for
the Group. A Shareholder resolution will be proposed at the Extraordinary
General Meeting due to be held on 18 December 2009 to approve the waiver of the
provisions of Rule 9.1 of the Takeover Code in respect of Redefine's
shareholding in Ciref passing through 30 per cent.
In addition, in order to provide enhanced opportunities to raise further capital
in the future, the Ciref Board also believes it is in the best interests of the
Company to seek a secondary listing on the JSE. The Ciref Board intends to seek
the JSE listing in the first half of 2010. There are a number of preparatory
steps required to facilitate such a secondary listing, including the passing of
certain Shareholder resolutions. Further information regarding the secondary
listing will be provided to Shareholders in due course.
1. BACKGROUND TO AND REASONS FOR THE PLACING
The global banking and credit crisis, which began in late 2007, led to the value
and liquidity of many asset classes being severely affected and also severely
impacted the availability of finance for real estate acquisitions and
investment. This situation has not fully reversed and bank funding availability
remains rather limited and, in the Board's opinion, expensive.
Ciref has been conservatively managed during the period with a strong emphasis
on preserving cash and remains financially sound despite the significant
write-downs in asset values, the substantial mark to market losses on interest
rate swaps and, following a major joint venture development partner going into
administration, the forced administration of the Trinity Walk Wakefield Limited,
Modus Corovest (Blackpool) Limited and Modus Corovest (Newport) Limited
developments. The UK shopping centre portfolio as a whole suffered from
declining rental levels and higher vacancy rates but at an operational level
performed to expectation. The Company's stable income portfolio has continued to
trade well with strong cash flows and limited tenant failures within the
European portfolio.
The Company's net asset value per share as a result of these events has fallen
from 108.65p in September 2008 to 58.43p in September 2009.
After 27 months of declining asset prices, the IPD all property index turned
positive in August 2009. The Directors believe that the overwhelming consensus
is that in the UK the worst of the decline in asset prices has passed. In
Europe, both Germany and France appear to have emerged from recession.
Nevertheless, the Directors are being cautious in their outlook, and they expect
any recovery to be slow and prolonged. Ciref expects that the substantial
intervention by governments and central banks around the world will lead to
increased inflation in time, which should be beneficial for real estate while
interest rates remain low. The Company will focus on protecting existing assets
and look to make opportunistic acquisitions where appropriate.
The Company has significant unutilised cash resources as at 30 September 2009
and the Board believes that the Group is well placed within the property
industry. Nevertheless, the Directors consider the Placing to be important for
the Company and its future development for a number of reasons. These are:
* The ability to take advantage of the demise of the Company's former joint
venture development partner, Modus, by acquiring from Modus, its administrators
and certain other third party vendors majority control of five shopping centres
with funder support;
* To consolidate the shareholding held by Ciref's shareholders in Wichford PLC
within Ciref itself;
* Loan to value ratios have increased and although the Company's funding banks
have been very supportive, additional capital is required to prevent the banks
increasing margins and imposing fees because of covenant breaches; and
* To take advantage of distressed opportunities in the market with a view to
enhancing returns to shareholders.
The Board does not consider it is currently possible to obtain the additional
capital the Company requires, and which the Placing secures, through debt
facilities on commercially acceptable terms. In view of the current credit
climate, the Board believes that the best means of securing additional capital
is by way of an equity fundraising. The Directors believe that the Placing
represents the most efficient and cost effective way to provide the Company with
additional resources and, moreover, that the outcome of the enhanced
relationship with Redefine is expected to be beneficial to the future of the
Group.
2. USE OF PROCEEDS
The proceeds of the Placing will be used to provide the Company with additional
capital to help the Company negotiate the current period of uncertainty in the
market, provide flexibility and headroom in its existing financing arrangements
and to support the Company's ongoing development. In particular, it is expected
that the Placing proceeds will be employed to:
* Enable Ciref to conclude the proposed restructuring arrangement with Aviva,
funder to a number of Shopping Centre Schemes formerly under joint venture
arrangements with the Modus Group (now in administration) or other third party
investors, whereby Ciref will acquire majority control of certain Shopping
Centre Schemes and simultaneously restructure the associated Aviva debt;
* Acquire 204,272,000 Wichford PLC shares (representing approximately 19.2 per
cent. of Wichford PLC's issued share capital), currently owned by Redefine at
the prevailing market price at the time of acquisition;
* Reduce debt on those Ciref investment properties that are at or near banking
covenant limits;
* Reduce debt on those investment properties where facilities due to expire are
renewed at lower loan to value ratios, to minimise excessive bank margin
charges;
* Provide general working capital; and
* Take advantage of current valuations prevalent in the market place, in respect
of physical as well as listed property investment opportunities, by making
selected acquisitions and/or investments consistent with Ciref's strategy.
3. DETAILS OF THE PLACING
The Company proposes to raise GBP38 million (before expenses) through the issue
of the Placing Shares. In the interests of keeping the costs and timing
associated with the fundraising to a minimum, the Directors have concluded that
a limited marketing exercise, without offering all existing Shareholders the
opportunity to participate in the Placing on a pre-emptive basis, is the most
suitable option. The Placing Price of 45 pence per Placing Share represents a
discount of approximately 10.89 per cent. to the closing middle market quotation
of an Ordinary Share on 24 November 2009 (being the last practicable business
day prior to the date of this announcement). In setting the Placing Price, the
Directors have considered the price at which the Placing Shares need to be
offered to investors to ensure the success of the Placing and raise a
significant level of equity, compared to the current market capitalization of
the Company. The Directors believe that both the Placing Price and discount are
appropriate. Accordingly, the Directors have decided that it would be in the
best interests of the Company and its Shareholders for the funds to be raised
through the Placing. The Directors consider the support of Redefine to be
critical to the success of the Placing and expect the enhanced relationship with
Redefine to be beneficial to the future of the Group.
Application will be made for the Placing Shares to be admitted to trading on AIM
and dealings are expected to commence on 21 December 2009.
The Placing is conditional upon, inter alia:
(i) the approval of all the Resolutions at the Extraordinary General Meeting;
and
(ii) Admission
occurring in each case by no later than 8.00 am on 21 December 2009 (or such
later time and date as the Company may agree with the Placees, being no later
than 8 January 2010).
The Placing Shares will, when issued, rank pari passu in all respects with the
Existing Ordinary Shares, including the right to receive all dividends and other
distributions thereafter declared, made or paid on such Ordinary Shares. For the
avoidance of doubt, the Placing Shares will not be issued at the record date for
the final dividend in respect of the year ended 30 September 2009.
4. BACKGROUND AND INFORMATION ON REDEFINE
Redefine is a real estate loan stock company incorporated in South Africa. It
was founded in 1999 and listed on the JSE in 2000. Redefine has a GBP1.4 billion
property portfolio in the retail, office and industrial sectors and GBP221
million portfolio of listed property securities, including its stake in Ciref
and a 33.3 per cent. stake in Hyprop Investments Limited, the largest focused
retail property company on the JSE.
Redefine acquired an initial interest of approximately 18 per cent. in Ciref at
the time of Ciref's admission to AIM in May 2006. The investment followed a
strategic decision by Redefine to invest beyond South African borders into
international real estate markets. The management of Ciref's investment and
property manager, Corovest, was well known to Redefine having worked together on
numerous joint investments in South Africa.
Redefine has supported Ciref's capital placements in March 2007 and November
2007, taking Redefine's interest in Ciref at that time to over 20 per cent.
Simultaneously with the November 2007 investment, Redefine acquired a 40 per
cent. stake in Ciref's investment manager, Corovest, and appointed two members,
namely Marc Wainer on 31 October 2007 and Wolf Cesman on 14 November 2007, to
the Ciref Board. Further share placings and purchases have seen Redefine's
interest in Ciref increase to 28.56 per cent. as at 24 November 2009 (the latest
practicable date prior to the date of this announcement).
Redefine remains committed to increasing its overseas investment and approached
the Ciref Board recently with a view to exploring whether Ciref could become
Redefine's sole international investment arm. Discussions have taken place over
a number of months with the Ciref Board and Redefine and it was agreed in
principle that:
* Redefine would support the current fundraising by Ciref with a significant
investment, increasing its holding to over 50 per cent. of Ciref;
* Ciref would become Redefine's sole international expansion vehicle;
* Ciref would be renamed Redefine International plc;
* As part of this process Redefine would also take control of Corovest by
acquiring the majority of the stake held by Coronation Group. This has now
completed (subject to South African Reserve Bank approval) and Redefine's
holding in Corovest is now approximately 76 per cent., the remaining shareholder
being Standard Bank Group International Limited.
Redefine has no specific intentions regarding the future business of the Company
nor does it currently have any specific strategic plans for the Company other
than to support the Directors' existing strategy for the Company.
Redefine has confirmed to the Directors that, following the Placing, the current
intention of Redefine is that the business of the Company will be continued in
substantially the same manner as at present. Redefine has also confirmed the
following:
(a)that it has no specific strategic plans in place which will adversely affect
either the employees or the locations of the Company's places of business;
(b)its current intention that the existing employment rights of the employees
and management of the Company will be fully safeguarded and there will be no
material change in the conditions of employment of any person;
(c)its current intention that there is not intended to be any redeployment of
the fixed assets of the Group.
Following the Placing, Ciref will continue to have a majority of directors who
will be independent of Redefine. Redefine will conduct all transactions and
relationships with Ciref on an arm's length basis and on a normal commercial
basis and will exercise its voting rights in such a manner that Ciref is capable
of carrying on its business independently.
5. WAIVER OF OBLIGATION UNDER RULE 9 OF THE TAKEOVER CODE
The Placing gives rise to certain considerations under the Takeover Code.
The purpose of the Takeover Code is to supervise and regulate takeovers and
other matters to which it applies. The Takeover Code is issued and administered
by the Panel. On the basis that the Company's place of central management and
its registered offices are in Jersey, it is a company to which the Code applies
and as such its Shareholders are therefore entitled to the protections afforded
by the Takeover Code.
Under Rule 9 of the Takeover Code, any person who acquires an interest (as
defined in the Takeover Code) in shares which, taken together with shares in
which he is already interested and in which persons acting in concert with him
are interested, carry 30 per cent. or more of the voting rights of a company
which is subject to the Takeover Code, is normally required to make a general
offer to all the remaining shareholders to acquire their shares.
Similarly, where any person who, together with persons acting in concert with
him, is interested in shares which in aggregate carry not less than 30 per cent.
of the voting rights of a company but does not hold more than 50 per cent. of
such voting rights a general offer will normally be required if any further
interests in shares are acquired by any such person.
An offer under Rule 9 must be made in cash and at the highest price paid by the
person required to make the offer or any person acting in concert with him, for
any interest in shares of the company during the 12 months prior to the
announcement of the offer.
Currently, the Company has two large shareholders, being Redefine and Coronation
Investments and Trading Limited ("Coronation"). In aggregate, Redefine and
Coronation have an interest of approximately 56.13 per cent. in Ciref as
follows:
* Redefine's direct holding of 28.56 per cent. in Ciref
* Coronation's effective holding of 27.57 per cent. in Ciref (through a direct
holding of 18.18 per cent. and an indirect holding of 9.39 per cent. through
Corovest Offshore Ltd)
The Panel has confirmed that Redefine and Coronation are not considered to be
acting in concert under the Takeover Code. Redefine has confirmed to the Board
that there is no agreement or understanding (whether formal or informal) between
it and Coronation to co-operate to obtain or consolidate control of the Company,
or otherwise to frustrate its operations in any way. Coronation is not
participating in the Placing and accordingly its interest in Ciref would be
diluted to approximately 12.85 per cent. if the Placing proceeds.
Following the issue of the Placing Shares, Redefine (and its nominees) will have
an interest in 87,736,072 Ordinary Shares representing 55.46 per cent. of the
issued share capital of the Company following Admission.
A table showing the beneficial interests in Ordinary Shares of Redefine both
before and upon Admission is set out below:
+----------------------+----------------------+
| Number of Ordinary | Number of Ordinary |
| Shares owned | Shares owned |
| beneficially prior | beneficially upon |
| to the Placing | Admission |
| | |
+----------------------+----------------------+
| 21,069,405 | 87,736,072 |
+----------------------+----------------------+
Following an application by the Directors the Takeover Panel has agreed, subject
to the approval of Independent Shareholders, to waive the requirement for
Redefine to make an offer to Shareholders as would otherwise arise under Rule 9
of the Takeover Code as a result of the completion of the Placing, and the
subsequent allotment of Placing Shares to Redefine (and its nominees). The
Placing is therefore conditional on the approval of the waiver by Independent
Shareholders being obtained.
Following the Placing, Redefine will hold beneficially more than 50 per cent. of
the Company's voting rights and may accordingly increase its aggregate interest
in Shares without incurring any obligation under Rule 9 to make a general offer.
The Board very much welcomes the proposed increased investment by Redefine in
the Company and looks forward to its continued support in addressing the current
difficult market conditions and positioning the Company to take advantage of
potential long-term growth opportunities. As stated above, Redefine will also
take control of Corovest, Ciref's property adviser, which is a BVI incorporated
company. Corovest is now conditionally owned (subject to approval by the South
African Reserve Bank) as to c. 76 per cent. by Redefine with the remaining
shareholder being Standard Bank. CFM is not participating in the Placing and has
no equity interest in Ciref.
6. SECONDARY LISTING ON JSE/FURTHER CAPITAL RAISINGS
The Board believes a secondary listing on the JSE to be a highly attractive
option for the Company. The following factors are considered by the Board to be
the major reasons in favour of the proposal for Ciref to apply, in due course,
to the JSE for a secondary listing and admission to trading of its Ordinary
Shares on the JSE:
* to provide an additional source of capital to fund the growth aspirations of
Ciref;
* to enhance potential investors' awareness of Ciref;
* to improve the depth and spread of the shareholder base of Ciref, which the
Directors believe should improve liquidity in the trading of its securities;
* to provide South African investors, both institutional and private, the
opportunity to participate directly in any future income streams and capital
growth of Ciref; and
* to provide investors with an additional market for trading Ciref shares.
Additionally, in terms of the current South African tax legislation, the
secondary listing will result in Ciref's dividends being exempt from South
African income tax for South African resident shareholders.
The Board intends to proceed with the approach to the JSE and take all steps it
considers to be necessary to effect the admission to trading of Ciref's Ordinary
Shares on the JSE, which is expected to occur in the first quarter of 2010.
As part of the exercise to secure the secondary listing on the JSE, the Board
will decide whether to seek to raise further capital on the JSE. If such further
capital is sought to be raised at that time, the Board expects that this
will take place simultaneously with the secondary listing.
Further details on the proposed JSE secondary listing will be provided to
Shareholders in due course along with notice for a further general meeting at
which the various necessary Shareholder approvals will be sought to effect the
JSE listing and fundraising.
7. PROPOSED CHANGE OF NAME
If the Placing completes, and Admission occurs, Redefine will beneficially own
approximately 55.46 per cent. of the enlarged issued share capital of the
Company at that time. As stated above, Redefine has given assurances of its
support to the Board in respect of the Company. The Board considers that from
and following Admission it is therefore appropriate for the Company to change
its name to Redefine International plc, to reflect and recognise Redefine's
increased stake in the Company and ongoing support for the Group.
8. DIVIDEND POLICY
Ciref's existing dividend policy is to pay dividends twice yearly on an interim
and final basis, representing in aggregate approximately 4.5 per cent. of the
Group's net asset value. In light of the Proposals and the Company's intention
to seek a secondary listing on the JSE, the Board has reviewed the Company's
ongoing dividend policy and intends to change the policy from one linked to NAV
to one related to distributable core earnings in any given financial period. The
Company intends to pay out not less than 80% of these earnings in dividends. No
statement in this Announcement is intended to be, nor may be construed as, a
profit forecast.
9. CIREF'S BUSINESS, CURRENT TRADING AND PROSPECTS
The Board of Ciref has stated that Ciref will be managed conservatively in the
future with the focus on protecting existing assets; while the market is
presenting a number of investment opportunities these will be assessed
in accordance with the current strategy of Ciref and available financing. The
current strategy of Ciref is to provide investors with investment returns and a
balanced exposure to income generating assets, selecting investments based on
criteria which include seeking to invest in stable income investments, major
development projects, value enhancing projects and property collective
investment vehicles.
Ciref has today announced its final results for the year ended 30 September 2009
with core earnings of GBP6.7 million (2008: GBP5.5 million). Losses on property
investments and interest rate swaps were GBP41.69 million and GBP6.13 million
respectively, comprising realised losses of GBP18.64 million and unrealised
losses of GBP29.18 million. The total loss for the year ended 30 September 2009,
was GBP39.7 million (2008: GBP28.0 million loss).
As previously stated, the Group NAV per share as at 30 September 2009 is 58.43
pence (2008: 108.65 pence). Net asset value prior to exceptional items and asset
revaluations is 83.63 pence (2008: 144.22 pence).
Since 30 September 2008 (being the date of the Company's last published audited
accounts) the global banking and credit crisis, which began in late 2007,
continued to impact the Group both on direct parameters, such as property
valuations and lower rental income, and also on indirect parameters such as a
major joint venture development partner going into administration and interest
rate derivative mark to market losses. The Directors believe that the
overwhelming consensus is that in the UK markets the worst of the recent decline
in asset prices has passed. In Europe, both Germany and France appear to have
emerged from recession. Nevertheless, the Directors are being cautious in their
outlook, and they expect any recovery to be slow and prolonged. Ciref expects
that the substantial intervention by governments and central banks around the
world (with stimulus packages, interest rate cuts and quantitative easing) will
lead to increased inflation in time which should be good for property while
interest rates remain low.
As noted above, part of the proceeds of the Placing will be used to conclude the
proposed shopping centre restructuring arrangements in conjunction with Aviva,
in respect of a number of shopping centre schemes formerly under joint venture
arrangements with the Modus Group (now in administration) or other third party
investors. This should include the consolidation of a number of centres into one
portfolio, with Ciref and Aviva investing approximately GBP13 million each in
the portfolio and Ciref issuing convertible preference shares to Aviva at a 6
per cent. coupon. The Board believes that the target net yield on such shopping
centres portfolio after interest and management costs should be 5.3 per cent. in
the first year, 7.8 per cent. in the second year and 9.5 per cent. in the third
year. Note, this is not intended to be, nor may be construed in any way as, a
profit forecast.
10. IRREVOCABLE UNDERTAKINGS
The Company has received irrevocable undertakings to vote in favour of the
Resolutions to be proposed at the Extraordinary General Meeting from Coronation
Investments and Trading Proprietary Limited, Standard Bank Stockbrokers (CI),
and Messrs Thurling and McMurray together holding in aggregate 23,682,206
Existing Ordinary Shares representing approximately 32.11 per cent. of the
Company's existing issued share capital. The Company has also received an
irrevocable undertaking from Redefine to vote in favour of all Resolutions but
for the Resolution to approve the Waiver proposed to be granted by the Panel in
respect of any obligation which might arise under Rule 9 of the Takeover Code in
relation to which it is disenfranchised from voting pursuant to the Takeover
Code.
11. RELATED PARTY TRANSACTIONS
Redefine is an existing Shareholder which falls within the definition of a
related party in the AIM Rules, because it is a substantial shareholder in Ciref
by nature of its greater than 10 per cent. holding of the Company's
Existing Ordinary Shares.
Under the AIM Rules, both Redefine's participation in the Placing and the
proposed acquisition by Ciref of 204,272,000 Wichford PLC shares from Redefine
are considered to be related party transactions. It is intended that the
Wichford PLC shares will be acquired for cash by Ciref at their market value at
the date of acquisition, which based on the Closing Price of 9.40p as at 24
November 2009 (being the last practicable date prior to the date of this
Announcement) would be approximately GBP19.2 million.
The Independent Directors, having consulted with Singer Capital Markets Limited
as the Company's Nominated Adviser, consider that the terms of the transactions
described above are fair and reasonable insofar as the Company's Independent
Shareholders are concerned. In being consulted, Singer Capital Markets Limited
has relied on the Independent Directors' commercial assessment of the
transactions.
12. EXTRAORDINARY GENERAL MEETING
In order for the Company to be able to issue the new shares in connection with
the Placing and change the name of the Company, it is necessary to obtain
Independent Shareholder approvals. A circular to shareholders will shortly be
posted to Shareholders containing a notice convening an Extraordinary General
Meeting at which Independent Shareholders will be asked to consider and if
thought fit, to pass the required Resolutions of the Company:
The Independent Directors, having been so advised by Singer Capital Markets,
believe that the Proposals are fair and reasonable and in the best interests of
Independent Shareholders and the Company as a whole. In providing advice to the
Independent Directors, Singer Capital Markets has taken into account the
Independent Directors' commercial assessment.
The Independent Directors consider that the passing of the Resolutions at the
Extraordinary General Meeting to be in the best interests of the Company and its
Independent Shareholders as a whole. Accordingly, the Independent Directors
unanimously recommend the Independent Shareholders to vote in favour of the
resolutions to be proposed at the EGM as they intend to do in respect of their
own beneficial holdings of approximately 3,330,963 Ordinary Shares representing
approximately 4.52 per cent. of the Company's existing issued Ordinary Shares.
Certain of the Independent Directors intend to subscribe for an aggregate total
of 66,667 Placing Shares pursuant to the Placing, and following the Placing the
Independent Directors will beneficially own, in aggregate, approximately 2.15
per cent. of the enlarged issued share capital of the Company.
13. EXPECTED TIMETABLE
Each of the times and dates in the table below is indicative only and may be
subject to change.
+--------------------------------------------+---------------------------+
| Announcement of the Placing, Secondary | 25 November 2009 |
| Listing and publication of the Shareholder | |
| circular | |
+--------------------------------------------+---------------------------+
| Latest time and date for receipt of Forms | 10.30 am, 16 December |
| of Proxy | 2009 |
| | |
+--------------------------------------------+---------------------------+
| Extraordinary General Meeting | 10.30 am, 18 December |
| | 2009 |
| | |
+--------------------------------------------+---------------------------+
| Payment from Placees (non-CREST | 18 December 2009 |
| settlement) | |
+--------------------------------------------+---------------------------+
| Admission of Placing Shares effective and | 21 December 2009 |
| expected commencement of dealings in the | |
| Placing Shares on AIM | |
| | |
+--------------------------------------------+---------------------------+
| CREST accounts credited (as applicable) | 21 December 2009 |
| | |
+--------------------------------------------+---------------------------+
| Expected date of despatch of definitive | 5 January 2010 |
| share certificates (as applicable) | |
+--------------------------------------------+---------------------------+
DEFINITIONS
+-------------------------+----------------------------------------------+
| "Admission" | admission of the Placing 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 rules of the London Stock Exchange from |
| | time to time which govern the admission to |
| | trading on and the operation of AIM |
| | |
+-------------------------+----------------------------------------------+
| "Aviva" | Aviva Commercial Finance Limited |
| | |
+-------------------------+----------------------------------------------+
| "Board" or "Directors" | the board of directors of the Company, |
| | including a duly constituted committee |
| | |
+-------------------------+----------------------------------------------+
| "CIF Law" | Collective Investment Funds (Jersey) Law |
| | 1988 (as amended) |
| | |
+-------------------------+----------------------------------------------+
| "Company" or "Ciref" | Ciref Plc, a company, incorporated in Jersey |
| | with registered number 91277 |
| | |
+-------------------------+----------------------------------------------+
| "Corovest" or | Corovest Fund Managers Limited |
| "Investment Manager" | |
+-------------------------+----------------------------------------------+
| "CREST" | the relevant system (as defined in the CREST |
| | Regulations) for the paperless settlement of |
| | share transfers and the holding of shares in |
| | uncertificated form in respect of which |
| | Euroclear is the operator (as defined in |
| | CREST Regulations) in accordance with which |
| | securities may be held and transferred in |
| | uncertificated form |
| | |
+-------------------------+----------------------------------------------+
| "CREST Regulations" | the Uncertified Securities Regulations 2001 |
| | (as amended) and the Companies |
| | (Uncertificated Securities) (Jersey) Order |
| | 1999, (as amended) and in the event of any |
| | inconsistency the latter shall prevail |
| | |
+-------------------------+----------------------------------------------+
| "Euroclear" | Euroclear UK & Ireland Limited, a company |
| | incorporated under the laws of England and |
| | Wales and the operator of CREST |
| | |
+-------------------------+----------------------------------------------+
| "Extraordinary General | the extraordinary general meeting of the |
| Meeting" or "EGM" | Company convened for 10.30 am on 18 December |
| | 2009 |
| | |
+-------------------------+----------------------------------------------+
| "Existing Ordinary | the Ordinary Shares in issue at the Record |
| Shares" | Date |
| | |
+-------------------------+----------------------------------------------+
| "Financial Services | the UK Financial Services Authority |
| Authority" or "FSA" | |
+-------------------------+----------------------------------------------+
| "FSMA" | the UK Financial Services and Markets Act |
| | 2000 (as amended) |
| | |
+-------------------------+----------------------------------------------+
| "Group" | the Company and its subsidiaries from time |
| | to time |
| | |
+-------------------------+----------------------------------------------+
| "Independent Directors" | the Directors of the Company, other than |
| | Wolf Cesman and Marc Wainer |
| | |
+-------------------------+----------------------------------------------+
| "Independent | the Shareholders, other than Redefine (and |
| Shareholders" | its nominees) |
| | |
+-------------------------+----------------------------------------------+
| "JFSC" or "Commission" | Jersey Financial Services Commission |
| | |
+-------------------------+----------------------------------------------+
| "JSE" | JSE Limited (registration number |
| | 2005/022939/06) a public company duly |
| | incorporated in South Africa and a licensed |
| | exchange under the South African Securities |
| | Services Act (Act 36 of 2004) |
| | |
+-------------------------+----------------------------------------------+
| "Law" | the Companies (Jersey) Law 1991 (as amended) |
| | |
+-------------------------+----------------------------------------------+
| "London Stock Exchange" | the London Stock Exchange plc |
| | |
+-------------------------+----------------------------------------------+
| "Modus Group" | Modus Ventures Limited (in administration) |
| | (Company Number 03242751) and its |
| | subsidiaries and subsidiary undertakings |
| | |
+-------------------------+----------------------------------------------+
| "Nominated Adviser" or | Singer Capital Markets Limited |
| "Broker" or "Singer | |
| Capital Markets" | |
+-------------------------+----------------------------------------------+
| "Ordinary Shares" or | ordinary shares of GBP0.01 each in the |
| "Shares" | capital of the Company |
| | |
+-------------------------+----------------------------------------------+
| "Panel" | the Panel on Takeovers and Mergers |
| | |
+-------------------------+----------------------------------------------+
| "Placees" | those persons subscribing for Placing Shares |
| | at the Placing Price pursuant to the Placing |
| | |
+-------------------------+----------------------------------------------+
| "Placing" | the proposed placing by the Company of up to |
| | 84,444,444 Ordinary Shares at the Placing |
| | Price |
| | |
+-------------------------+----------------------------------------------+
| "Placing Price" | 45 pence per Placing Share |
| | |
+-------------------------+----------------------------------------------+
| "Placing Shares" | up to 84,444,444 Ordinary Shares to be |
| | issued at the Placing Price by the Company |
| | pursuant to the Placing |
| | |
+-------------------------+----------------------------------------------+
| "Proposals" | collectively, the approval of the waiver of |
| | Rule 9 of the Takeover Code, the Placing and |
| | the proposed change of name of the Company |
| | |
+-------------------------+----------------------------------------------+
| "Prospectus Rules" | the prospectus rules as defined in section |
| | 73A(4) of the Financial Services and Markets |
| | Act 2000 |
| | |
+-------------------------+----------------------------------------------+
| "Record Date" | 6.00 pm on 20 November 2009 |
| | |
+-------------------------+----------------------------------------------+
| "Redefine" | Redefine Income Fund Limited, a company |
| | registered in South Africa with registration |
| | number 1999/018591/06 and having its |
| | registered office at 3rd Floor, Redefine |
| | Place, 2 Arnold Road, Rosebank, |
| | Johannesburg, 2196, South Africa (PO Box |
| | 1731, Parklands 2121) |
| | |
+-------------------------+----------------------------------------------+
| "Related Party | the related party transactions, under the |
| Transactions" | AIM Rule for Companies, involving Redefine |
| | as a related party of Ciref, by nature of it |
| | being a substantial shareholder in Ciref, as |
| | more fully described in paragraph 14 of the |
| | Chairman's letter |
| | |
+-------------------------+----------------------------------------------+
| "Resolutions" | the resolutions to be proposed at the |
| | Extraordinary General Meeting |
| | |
+-------------------------+----------------------------------------------+
| "Shareholders" | holders of Ordinary Shares |
| | |
+-------------------------+----------------------------------------------+
| "Sterling" or "GBP" | pounds sterling, the lawful currency of the |
| | United Kingdom |
| | |
+-------------------------+----------------------------------------------+
| "Subsidiary" | is a subsidiary of another Company if that |
| | other company holds a majority of the voting |
| | rights in it, is a member of it and has the |
| | right to appoint or remove any majority of |
| | its board of directors or is a member of it |
| | and controls alone, pursuant to an agreement |
| | with other members a majority of the voting |
| | rights in it, or if it is a subsidiary of a |
| | company that is itself a subsidiary of that |
| | other company |
| | |
+-------------------------+----------------------------------------------+
| "Takeover Code" | the City Code on Takeovers and Mergers |
| | |
+-------------------------+----------------------------------------------+
| UK" or "United Kingdom" | the United Kingdom of Great Britain and |
| | Northern Ireland |
| | |
+-------------------------+----------------------------------------------+
| "UK Listing Authority" | the Financial Services Authority acting in |
| | its capacity as the competent authority for |
| | the purposes of Part VI of FSMA |
| | |
+-------------------------+----------------------------------------------+
| "uncertificated" or "in | recorded on the register of Ordinary Shares |
| uncertificated form" | as being held in uncertificated form in |
| | CREST, entitlement to which, by virtue of |
| | the CREST Regulations, may be transferred by |
| | means of CREST |
| | |
+-------------------------+----------------------------------------------+
| "US" or "United States" | United States of America, its territories |
| | and possessions, any state of the United |
| | States and the District of Columbia |
| | |
+-------------------------+----------------------------------------------+
| "Waiver" | the proposed waiver by the Panel of the |
| | obligation which would otherwise arise under |
| | Rule 9 of the Takeover Code requiring |
| | Redefine to make an offer for the entire |
| | issued share capital of the Company as a |
| | result of the Placing of Placing Shares to |
| | Redefine (and its nominees) |
+-------------------------+----------------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
IOEILFFFLRLEFIA
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