TIDMREO
RNS Number : 7063E
Real Estate Opportunities PLC
11 April 2011
11 April 2011
Real Estate Opportunities plc
(the "Company")
Posting of Circulars and Notice of Extraordinary General
Meetings
Further to the Company's previous announcement on 24 December
2010 regarding the status of negotiations on the Company's balance
sheet restructuring, the Company announces that it is today
despatching circulars and notices of extraordinary general meetings
(together, the "Circulars") to Ordinary Shareholders and to holders
of the 7.5% convertible unsecured loan stock ("CULS") and zero
dividend preference shares ("ZDPs"). Capitalised terms used in this
announcement shall, unless the context requires otherwise, bear the
meanings given to them in the Circulars.
The Circulars to holders of CULS and ZDPs contain a description
of the proposed Restructuring, which is subject to approval at the
extraordinary general meetings and certain procedural conditions
precedent being satisfied, and can be summarised as follows:
-- Battersea Power Station, related bank loans, the Company's
obligations under the Oriental Loan Notes and other related assets
and liabilities will be transferred to a new holding company,
BPSSV, or one of its subsidiaries;
-- the REO Group's liability to pay CULS Holders an aggregate of
GBP100.9 million of principal and GBP9.5 million of accrued
interest as at 31 May 2011 (including interest not paid on 31
August 2010 and 28 February 2011) will be satisfied by effecting a
debt for equity swap pursuant to which CULS Holders will be issued
with approximately 70.8 million REO Shares (in aggregate
representing approximately 15.9 per cent. of the Company's enlarged
ordinary share capital immediately following completion),
approximately 212 million BPSSV Shares (representing approximately
21.2 per cent. of BPSSV's share capital immediately following
completion) and BPSSV Warrants in respect of approximately 159
million BPSSV shares (representing approximately 12.2 per cent. of
BPSSV's share capital on a fully diluted basis);
-- the Group's liability to pay the holders of the ZDP Shares an
aggregate of GBP136 million by way of capital on 31 May 2011 will
be satisfied by effecting a debt for equity swap pursuant to which
ZDP Holders will be issued with approximately 40.5 million REO
Shares (representing approximately 9.1 per cent. of the Company's
enlarged ordinary share capital immediately following completion),
approximately 121 million BPSSV Shares (representing approximately
12.1 per cent. of BPSSV's share capital immediately following
completion) and BPSSV Warrants in respect of approximately 91
million BPSSV shares (representing approximately 7 per cent. of
BPSSV's share capital on a fully diluted basis);
-- the debt due by companies within the Battersea Group to other
companies in the wider Group (amounting to GBP208 million as at 31
August 2010) will be satisfied by effecting debt for equity swaps,
as a result of which BPSSV Shares representing a total of
approximately 54 per cent. of BPSSV's issued share capital
immediately following completion will be issued to companies in the
Group;
-- Treasury Holdings will, by way of a management incentive fee,
be issued with approximately 77 million BPSSV Shares (representing
approximately 7.7 per cent. of BPSSV's issued share capital
immediately following completion) and BPSSV Warrants in respect of
25 million BPSSV shares (representing approximately 1.9 per cent.
of BPSSV's share capital on a fully diluted basis);
-- the Company will be issued approximately 50 million BPSSV
Shares (representing approximately 5 per cent. of BPSSV's issued
share capital immediately following completion) and BPSSV Warrants
in respect of approximately 25 million BPSSV shares (representing
approximately 1.9 per cent. of BPSSV's share capital on a fully
diluted basis). The Company will distribute these BPSSV Shares and
BPSSV Warrants in specie to Shareholders (including Treasury
Holdings) subject to the Company passing a resolution to amend its
articles of association to permit distributions in specie;
-- Oriental has agreed to a standstill arrangement with the
Company whereby Oriental has agreed not to take enforcement action
in relation to the non-payment of interest and other covenant
breaches under the Loan Notes until 31 August 2011 or earlier if
the standstill arrangement is terminated. Oriental has also agreed
to release the Company from its obligations under the Loan Notes on
terms that a subsidiary of BPSSV assumes liability to repay the
debt. It has also been agreed that, if the Senior Lenders agree to
defer the date for repayment under the Battersea Power Station
Facility Agreements beyond 31 August 2011, Oriental will also defer
the date for repayment of the Loan Notes accordingly. Oriental will
be entitled to a forbearance fee of GBP4.5 million in consideration
for entering into the standstill agreement payable on 31 August
2011 or such later repayment date if the Battersea Power Station
Facility Agreements are extended;
-- the Company will be released from its guarantees of the
Battersea Power Station Facility Agreements (under which the
aggregate liability (including forbearance fees and interest rate
swaps) at completion of the Restructuring is expected to be
approximately GBP300 million) and will be provided with the
necessary Senior Lender consents to implement the Restructuring;
and
-- the Company will be granted forbearance by NAMA under which,
for a 12 month period following Completion, NAMA will agree not to
call under the guarantee provided by the Company in relation to a
Euro 95 million facility advanced in relation to certain of the
Group's assets in Ireland.
The Company has received irrevocable undertakings to vote in
favour of the Restructuring at the upcoming extraordinary general
meetings from 60% of CULS holders and 58% of the holders of ZDP
shares respectively.
The Restructuring also has the support of the Company's
directors and Treasury Holdings, who together hold 67.4 per cent of
the ordinary shares.
The previous announcement on 24 December 2010 stated that, if
its GBP150 million loan note and accrued interest is not repaid on
31 May 2011, Oriental Property Limited would, subject to certain
exceptions, have the option to convert the debt into 75% of the
equity in the new Battersea Power Station holding company. Also,
shareholders in the new holding company would have the right to
acquire that interest prior to 1 June 2012 for an amount equal to
the sum due to Oriental Property Limited under the loan note
together with interest - both of these provisions are no longer
applicable.
The Circulars to holders of CULS and ZDPs also contain a summary
valuation report prepared by King Sturge as of 31 December 2010 for
the Battersea Power Station property. This shows a valuation of
GBP498 million, assuming planning permission is received.
The Circular to shareholders contains notice of an extraordinary
general meeting convened to approve amendments to the Memorandum
and Articles of Association to allow the Company to effect
distributions in specie, to introduce shareholders' pre-emption
rights and to convert the Company into a no par value company.
If the Restructuring becomes effective, it is expected that the
listings of the CULS and ZDPs on the Official List (standard
category) will be cancelled on the Effective Date, expected to be
12 May 2011.
A copy of each Circular and related forms of proxy have been
submitted to the National Storage Mechanism and will be available
for inspection shortly at www.hemscott.com/nsm.do.
A copy of each Circular will also shortly be made available on
the Company's website at www.realestateopportunities.co.uk.
For further information, please contact:
Real Estate Opportunities plc
Ray Horney, Chairman
Tel: + 44 (0)1273 775 225
Matrix Corporate Capital
Paul Fincham
Tel +44 (0)20 3206 7000
Goodbody Stockbrokers
Linda Hickey, Corporate Broking
Tel +353 1 641 6017
Finsbury
Gordon Simpson / Arif Shah
Tel: +44 (0)207 251 3801
Murray Consultants
Ed Micheau
Tel: + 353 1 498 0300
This information is provided by RNS
The company news service from the London Stock Exchange
END
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