Ishaan Real Estate PLC Update on tax review process (5330D)

TIDMISH

RNS Number : 5330D

Ishaan Real Estate PLC

30 April 2013

Ishaan Real Estate Plc

("Ishaan Real Estate" or the "Company")

Update on tax review process and other transaction amendments

On 21 February 2013, Ishaan Real Estate announced the proposed sale of the Company's entire Property Interests to Chalet Hotels Private Limited, a member of the K Raheja Corp Group, and other entities connected with K Raheja Corp Group, for an aggregate consideration of approximately GBP70.3 million in cash (the "Disposal"). The Disposal was subsequently approved by Shareholders on 11 March 2013.

The Disposal remained conditional upon the obtaining of a nil withholding tax certificate from the Indian tax authorities confirming that no withholding tax is required to be deducted at source in relation to the consideration payable to the Group for the sale of the Property Interests. At the time of the original announcement on 21 February 2013, it was expected that this condition precedent to the Disposal would be satisfied by 28 March 2013. On 26 March 2013, Ishaan Real Estate announced that while progress had been made towards obtaining the nil withholding tax certificate, the Board had been advised that this process was now expected to be completed by the end of April 2013. As a result, the Board agreed to extend the long stop date for the satisfaction of this condition precedent to 30 April 2013.

The Board has now been informed that the review process by the Indian tax authorities has been completed and that the Indian tax authorities have confirmed that withholding tax equivalent to approximately GBP1.1 million is payable in respect of the Disposal. This amount will therefore be deducted at source by the Purchasers from the consideration payable to the Company in respect of the Disposal. The terms of the Share Purchase Agreements have been amended, as envisaged in their terms, to allow completion to proceed notwithstanding that the nil withholding tax condition in respect of the Disposal was not satisfied.

All the other terms and conditions of the Disposal remain as set out in the circular sent to Shareholders on 22 February 2013 (the "Circular").

Sale of Mauritian subsidiaries

Neerav Investment Advisory Services (Dubai) Limited ("Neerav") or an affiliate of Neerav has committed to acquire from I Holding Company (Mauritius) Limited, subsequent to the Initial Distribution, the Mauritian subsidiaries owned by I Holding Company (Mauritius) Limited for an expected consideration of approximately GBP700,000. Following distribution of the proceeds by I Holdings Mauritius, the Company will be able to retain the proceeds of this sale as cash available for subsequent distribution to Shareholders.

Potential sale of trademarks held by the Group

In addition, the Company is in discussions whereby Neerav, or an affiliate of Neerav, may acquire from the Company the trademarks held by the Group in respect of the Ishaan Real Estate brand name. It is anticipated that this sale of trademarks could raise cash proceeds of up to GBP250,000, which would then be available for distribution to Shareholders. There is no guarantee that any such sale will occur.

Impact on quantum and timing of distributions to Shareholders

The above is expected to have a limited impact, if any, on the quantum of distributions to Shareholders. The Board now expects to make the Initial Distribution of 50 pence per Ordinary Share in July 2013 and the Final Distribution of up to 1 pence per Ordinary Share by July 2014.

It remains the intention of both parties for completion to occur in accordance with the agreed terms.

Defined terms in this announcement have the same meanings as set out in the Circular.

Enquiries:

 
 Deutsche Bank AG, London Branch (NOMAD and broker to the Company) 
  Ben Lawrence 
  John O'Driscoll 
  Tel: +44 20 7545 8000 
 College Hill (PR advisers to the Company) 
  Mike Davies 
  Tel : +44 20 7457 2020 
  Email: mike.davies@collegehill.com

Deutsche Bank AG is authorised under German Banking Law (competent authority: BaFin - Federal Financial Supervising Authority) and authorised and subject to limited by the Financial Conduct Authority (the "FCA"). Details about the extent of Deutsche Bank AG's authorisation and regulation by the FCA are available on request.

Deutsche Bank AG is acting for the Company and no one else in connection with the Disposal and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Deutsche Bank nor for providing advice in connection with the Disposal.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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