Sale of X-Leisure Fund

RNS Number : 6569S

Capital & Regional plc

04 December 2012

 



4 December 2012

CAPITAL & REGIONAL PLC

X-Leisure Fund

Following the announcement on 16 November 2012, Capital & Regional plc ("the Group") announces today that it has entered into a conditional binding agreement for the sale of its 11.9% stake in the X-Leisure Fund ("the Fund") and its 50% interest in X-Leisure Limited to a subsidiary of Land Securities Group plc. Subject to a completion balance sheet mechanism, gross proceeds for the units are estimated to be £31.2 million compared to the 30 June 2012 carrying value in the Group's accounts of £32 million. In addition, £0.5 million is due to be received for the Group's share of X-Leisure Limited. Costs of the transaction are expected to amount to £1.3 million, which includes £0.5 million the Group has agreed to pay to terminate profit sharing arrangements to the management team in X-Leisure Limited. The proceeds will be received in cash on completion.

The principal conditions that need to be met for the sale to proceed are:

·    that given the transaction is of such a size as to require shareholder approval under the Listing Rules the Group's shareholders vote in favour of the sale

·    that 75% of X-Leisure Fund unit holders, excluding Land Securities plc, the Group and others selling units, vote for various Fund governance changes, the change in ownership of the X-Leisure Limited, and changes to the fees paid to the Fund manager

·    that the Fund's banks consent to the transaction

The Group will send out a shareholder circular and convene a General Meeting to approve the disposal on approval of the changes by unit holders.  A unit holder meeting to approve the changes is expected to be held on either 21 or 27 December 2012.  It is therefore expected that the Group's General Meeting will be held in early to mid January 2013.

Part of the disposal proceeds will be used to further de-leverage the Group.  Following completion of the disposal the Board will consider how best to maximise shareholder returns with the balance of the proceeds, including options for reinforcing our core shopping centre franchise centred on the Mall.

The X-Leisure fund is the largest specialist fund investing in UK leisure property, owning 16 properties which were valued at a total of £580.6 million at 30 September 2012. For the six months to 30 June 2012 the Group's share of recurring pre-tax profit of the X-Leisure Fund was £0.8 million and the Group's share of gross property assets at that date was £67.7 million. The carrying value of the Group's investment in the X-Leisure Fund was £32.0 million at 30 June 2012. The Group will receive its share of distributable profits of the Fund to the date of completion.

X-Leisure Limited is the property and asset manager for the Fund. Together with associated goodwill, the Group's investment in X-Leisure Limited had a carrying value of £1.3 million at 30 June 2012. Profits earned from the Group's investment in X-Leisure Limited amounted to £0.3 million in the 6 months to 30 June 2012. The Group will receive a distribution of its share of profits to the end of the year.

Hugh Scott-Barrett commented:

"Following on from the sale of our interest in the Junction Fund the disposal of our interest in the X-Leisure Fund represents a further important step in the execution of our strategy of selling non-core assets and concentrating on our core UK shopping centre activities."

Rothschild are acting as financial advisor to AREA Property Partners and the Group on the transaction, and Numis is acting as sponsor to the Group in relation to the shareholder circular.

ENDS

For further information:

Capital & Regional:
Hugh Scott-Barrett, Chief Executive	Tel: [phone]
Charles Staveley, Group Finance Director	Tel: [phone]
Maitland:
Martin Leeburn/Emma Burdett	Tel: [phone]

Notes to editors:

About Capital & Regional plc

Capital & Regional is a specialist property company with a track record of developing asset management opportunities in town centre shopping centres and out of town retail parks.

Capital & Regional founded The Mall fund in conjunction with Aviva Investors. Capital & Regional acts as Property and Asset Manager for the Mall fund and holds a 20.15% interest in it.

Capital & Regional & AREA Property Partners each hold a 50% interest in a German retail property portfolio which is managed by Garigal Asset Management GmbH, in which Capital & Regional holds a 30% interest. 

Capital & Regional has an 11.9% stake in the X-Leisure fund, which is managed by X-Leisure Limited in which Capital & Regional holds a 50% interest.

Capital & Regional has a number of other joint ventures and wholly-owned properties.

For further information see www.capreg.com

 

END

 

 

DISTIBRTMBTMMIT