Asset sales and distributions to shareholders (4694W)
19 11월 2010 - 3:25AM
UK Regulatory
TIDMNLD
RNS Number : 4694W
Nordic Land PLC
18 November 2010
Nordic Land Plc
18 November 2010
Update on asset sales and distributions to shareholders
The Board of Nordic Land Plc ("Nordic Land" or the "Company")
has published today a circular to shareholders recommending a
proposal for the Company and its subsidiaries (the "Group") to
commence winding up and convening a shareholder meeting to be held
on 6 December 2010 to consider the proposal.
The circular also provides an update on the sale of the
properties at Sicklaon ("Sickla") and expected distributions to
shareholders.
Update on the sale of Sickla
Following approval by shareholders for the disposal of the
Group's property portfolio at a general meeting of the Company held
on 7 October 2010, Nordic Land completed the sale of its two
largest properties, Terminalen 1 in Helsingborg and Lackareran 3 in
Borlange on 15 October 2010.
However, as has been announced previously, the sale of Sickla
has had to be postponed because Lehman Brothers International
(Europe) ("Lehman Brothers"), in its capacity as security agent for
the bank borrowings and as holder of the mortgage certificates for
Sickla, has not been able to locate these mortgage certificates.
Without the mortgage certificates the sale could not proceed as
planned as they are required to confirm to the buyer that there are
no outstanding mortgages or charges on Sickla. Under the terms of
the original sale agreement, the Group was contractually obliged to
deliver the mortgage certificates to the buyer and so Lehman
Brothers' inability to deliver the mortgage certificates for Sickla
to the Group would have caused the Group to be in breach of the
sale agreement. Accordingly the Group has renegotiated the terms of
the sale agreement such that the it is no longer obliged to deliver
the mortgage certificates for Sickla to the buyer and, instead, out
of the gross consideration of SEK 35 million, the sum of SEK 12
million (the Sickla Retention Amount) will be retained by the buyer
and released to the Group when the original or replacement mortgage
certificates for Sickla are provided to the buyer. In addition, the
buyer will take second charges on the escrow accounts relating to
the Terminalen and Borlange sales to protect it from the legal risk
of there being a charge secured on Sickla, and evidenced by the
Mortgage Certificates, in excess of the Sickla Retention Amount
These charges are to be released on delivery of the original or
replacement mortgage certificates to the buyer. Under the terms of
the revised agreement, the Sickla Retention Amount is guaranteed by
the parent company of the buyer, Atrium Ljungberg AB, a listed
Swedish property company with a market capitalisation of SEK 10.6
billion as at 17 November 2010. In addition it has been agreed that
the Group will be granted a pledge over the mortgage certificates
for Sickla as security for the Group in the event that payment of
the Sickla Retention Amount is not made when due. These revisions
to the terms of the sale agreement for Sickla are set out in an
amendment which was agreed on 18 November 2010.
The changes to the sale agreement for Sickla do not affect the
estimate of the net cash resources of the Group which are available
to be distributed to shareholders. However, because of the need to
fund the Sickla Retention Amount, the amount of the initial
distribution will be reduced with a corresponding increase in the
final distribution. Further information on the distributions is set
out below.
Initially, completion of the sale of Sickla was postponed until
10 November 2010 to allow further time for Lehman Brothers to
locate the mortgage certificates for Sickla. Completion has now
been scheduled for 24 November 2010. As a result of this delay in
completion, the Directors believe that the proposed timing of the
first distribution will be delayed from December 2010 to January
2011.
As well as continuing to search for the original mortgage
certificates for Sickla, Lehman Brothers has also initiated the
process of obtaining replacement certificates. However, obtaining
replacement certificates is expected to take approximately 12
months.
Distributions to Shareholders
The Directors intend to distribute the estimated net cash
resources of the Group to shareholders by way of two cash
distributions, after allowing for all costs associated with the
property disposals and the estimated costs of winding up the Group.
Provided that the proposal to wind up is approved by shareholders,
the total distribution is expected to be approximately 22 pence per
share.
At the time of publishing the circular to shareholders
recommending the proposal to sell the Group's properties and at the
date of the meeting of Shareholders to approve the disposal on 7
October 2010, the amount of the total distribution was expected to
be 23 pence per share. The reduction to 22 pence per share is a
result of additional legal and administration costs arising in
connection with that shareholder meeting costs incurred in
connection with the negotiations with Lathe, additional legal costs
in Sweden in connection with completion of the disposals and recent
adverse changes in the SEK:GBP exchange rate.
The Directors intend that the Shareholder Distribution will be
made in two stages:
-- the initial distribution, which is expected to total
approximately 10 pence per share, is expected to be distributed in
January 2011 (the "Initial Distribution"); and
-- the final distribution, which is expected to total
approximately 12 pence per share, will be made once the escrow and
retention amounts are released which is expected to be in the first
quarter of 2012 (the "Final Distribution").
At the time of publishing the circular to shareholders
recommending the proposal to sell the Group's properties and at the
date of the meeting of Shareholders to approve the disposal on 7
October 2010, the Initial Distribution was expected to be
approximately 15 pence per share and the Final Distribution 8 pence
per share. However, the amount of the Initial Distribution has been
reduced, and the amount of the Final Distribution correspondingly
increased, because of the inability of Lehman Brothers to locate
the mortgage certificates for Sickla and the consequential
agreement that part of the consideration from the sale of Sickla
will be retained until the original or replacement mortgage
certificates can be delivered to the buyer, as described above.
The Directors intention is to return the expected net cash
resources of the Company to shareholders as soon as is practicable
and they may determine that it is appropriate to make changes to
the number and amount of the distributions to be made to
shareholders. For example, if the Sickla Retention Amount is
released to the Group appreciably before the expected time of the
Final Distribution, either because Lehman Brothers locates the
mortgage certificates for Sickla or because the replacement
mortgage certificates are obtained sooner than expected, then the
Directors may, at that time, make an earlier distribution of the
amount made available from the release of the Sickla Retention
Amount.
Further information is included in the circular to shareholders
dated 18 November 2010 which is available on the Company's
website.
For further enquiries:
Nordic Land Plc
Ray Horney, Chairman Tel: +44 20 7367 8888
(c/o Bankside Consultants)
SP Angel Corporate Finance LLP
Robert Wooldridge/Tercel Moore Tel:+44 20 7647 9650
Matrix Corporate Capital LLP Tel: +44 20 3206 7000
Stephen Mischler
Bankside Consultants
Simon Rothschild/Louise Mason Tel: +44 20 7367 8888
This information is provided by RNS
The company news service from the London Stock Exchange
END
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